Bob,
If you read the case, it talks specifically about the operator following RRC Rules. The lower courts were divided, but the Supreme Court took the position that if the damage was caused by following RRC rules, no negligence, etc. was attached.
In the Neel case, the operator overproduced the well, not following RRC allowables and damaged the reservoir, which brought forth the initial suit and the settlement.
I do not know what the issue is except, from what was said, there appears to be communication between the wells. The rest is conjecture.
If I were the Operator, I would shut in my production immediately and contact the other operator so that they can get their own frac water back. Then I would pull them hard and compete for the reserves. But that is best left for petroleum engineers to figure out.
However, the royalty owner should be represented in any case or settlement.