Three class action lawsuits by landowners in Southwest Virginia will be heard in U.S. District Court on Thursday. The landowners, who could number into the thousands, allege that oil and gas companies cheated them out of millions in natural gas royalty payments.
The companies, on the other hand, say they have complied with all the laws and the landowners' cases have no merit.
The plaintiffs are small landowners primarily from Buchanan, Dickenson and surrounding counties in the Utica and Devonian shale plays, said Don Barrett of the Barrett Law Group in Lexington, MS, lead attorney for the plaintiffs.
The landowners had sold their coal interests years ago, but not their coalbed methane (CBM) interests. The landowners allege that the companies violated Virginia's Gas and Oil Act of 1990 (see Daily GPI, July 12, 2010; June 30, 2010; June 21, 2010).
"We brought lawsuits to make it right, to get them what they are owed," Barrett said. "Every now and then the little guys do win. And they're gonna win this time."
Landowners filed suit against Pittsburgh-based EQT Corp. and Consol Energy Corp. of Canonsburg, PA in 2010. The cases are Adair v. EQT Corp. et al. (Case No. 1:10CV37); Legard et al. v. EQT Corp. et al. (Case No. 1:10CV41); and Hale v. CNX Gas Co. LLC et al. (Case No. 1:10CV59).
"Speaking only for Consol Energy and its affiliate, CNX Gas Co., the lawsuits filed by out-of-state attorneys in federal court in Abingdon do not have any merit and do not involve hundreds of millions of dollars, contrary to the suggestion of one of those attorneys quoted [by other media]," Consol spokesman Steve Johnson told NGI on Tuesday.
"Those attorneys also suggested that the cases are moving forward, but they conveniently failed to mention that in the one case against CNX Gas in which the magistrate judge has issued her decision, she recommends that their primary claim against CNX Gas be dismissed."
The cases are scheduled to be heard at 1 p.m. in the courtroom of Judge James P. Jones in the Western District of Virginia in Abingdon. Last November Magistrate Judge Pamela Meade Sargent denied a motion by the companies to have the cases dismissed. Barrett said Jones would review Sargent's ruling and recommendation at Thursday's hearing.
Officials with EQT did not return calls seeking comment Monday or Tuesday.
Barrett said the plaintiffs reached an agreement last week to settle a fourth lawsuit against Chesapeake Energy Corp. for $3 million.
"Relatively speaking, [Chesapeake] was chicken feed compared to [EQT and Consol]," Barrett said, adding that the Oklahoma City, OK-based company only had about 160 wells in dispute with a few hundred landowners. "[Chesapeake] has paid us about 95% of everything we could possibly have asked for, plus interest."
Chesapeake spokesman Jim Gipson told NGI on Tuesday that the company "can confirm the case has tentatively been settled pending court approval, but not the amount."
Barrett said the three cases that will be heard Thursday were tailored to address different groups of landowners in different situations. He said some had similar leases and others had no leases at all. The three are also lead cases, the first of several that have been filed.
Asked how many plaintiffs were involved in the three lead cases Barrett said, "We don't know for sure, but there are probably several thousand. The energy companies know exactly how many there are, but they haven't had to tell us yet."
Barrett said the litigation involved about 15,000 wells drilled in Southwest Virginia.
"CNX Gas has complied with the law of the Commonwealth of Virginia in all respects in connection with its CBM development program and also has complied with the terms of its leases," Johnson said, adding that the company "has brought thousands of jobs to Virginia and has made hundreds of millions of dollars of investment in Virginia, in supplying the energy and raw materials needs of this country.
"Consol Energy operates responsibly in Virginia and to suggest otherwise is outrageous."
©Copyright 2011 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.