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West Virginia NatGas Royalties Decision Stands as U.S. Supreme Court Denies Appeal

The U.S. Supreme Court has denied an appeal filed by West Virginia landowners that wanted a May opinion reviewed by the state’s highest court involving natural gas royalties.

The Supreme Court rejected the case in a list of orders on Monday, offering no explanation. The plaintiffs asked the nation’s highest court to review West Virginia Supreme Court Justice Beth Walker’s participation in the case after she was elected in November 2016 and voted to rehear it.

The state Supreme Court reversed its previous decision against the natural gas industry in a far-reaching decision that found producers can deduct post-production costs from royalty payments. The West Virginia justices reached their decision after Walker replaced Justice Brent Benjamin, who wrote the first opinion.

In their petition to the U.S. Supreme Court, attorneys for Katherine Leggett and others wrote that Walker’s husband owned stocks of natural gas and energy companies, including XTO Energy Inc., which has operations in the state. They argued that the investments created a conflict of interest for Walker and violated due process.

The plaintiffs initially filed the case against a subsidiary of EQT Corp., alleging that the company had been incorrectly deducting post-production expenses for years. EQT filed a petition for rehearing in the West Virginia Supreme Court last year, eventually winning the case.

Walker told the court that there was no conflict of interest and later notified the clerk that her husband had divested his holdings in the energy companies at issue. 

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