On September 30, 2013, the U.S. District Court Judge James P. Jones denied the relevant defendants’ objections in the Adair, Addison, Adkins, Hale, and Legard cases and adopted the Magistrate Judge’s Report and Recommendation, issuing orders certifying the classes in each of the cases. Copies of each of these documents are available in the sidebar below.
On June 5, 2013, U.S. Magistrate Judge Pamela Meade Sargent recommended that the U.S. District Court grant class-action status to lawsuits filed on behalf of thousands of landowners in southwest Virginia against EQT Production Company and CNX Gas Company, both Pittsburgh-area energy companies with natural gas wells across Appalachia.
Through these cases, Plaintiffs seek to obtain the release of millions of dollars in gas royalties that properly belong to gas owners in Virginia and that have been held in a state escrow account for years as a result of CNX’s and EQT’s actions. Plaintiffs also allege that EQT and CNX have underpaid and miscalculated gas royalties owed to them.
The Virginia Gas and Oil Board ultimately granted conditional leases to EQT and CNX and placed royalties in an escrow account pending resolution of the conflicting claims. The royalties placed in the escrow account amounted to one-eighth of net proceeds of the drilling. The class action complaint alleges that the Virginia Gas and Oil Board subjected the landowners to “an involuntary lease” and established a below-market royalty rate for the methane gas.
In 2004, the Virginia Supreme Court found that methane gas is a “distinct mineral estate” from coal, concluding the landowners owned the rights to natural gas removed from their properties. In her opinion this week, U.S. Magistrate Judge Sargent wrote, “Quite frankly, I am of the opinion that the Virginia Supreme Court has decided this issue.”
Today, Judge James P. Jones of the Western District of Virginia granted final approval to a class action settlement in Sharon B. Healy v. Chesapeake Appalachia LLC, et al., Case No. 10-cv-23. Don Barrett and Larry Moffett appeared at the final fairness hearing on behalf of certain Virginia landowners who alleged that the Defendant gas company had wrongfully withheld certain gas royalties during the relevant time period. To view a copy of this order, please click below.
Yesterday, U.S. District Judge James P. Jones affirmed the earlier recommendations of U.S. Magistrate Judge Pamela Meade Sargent, who found enough evidence of wrongdoing by large gas producers EQT Production Co. and CNX Gas Co. for the plaintiffs to move forward with their class-action cases. The Plaintiffs consider these rulings major victories for Southwest Virginia landowners.
June 22, 2011 – Today, Judge Jones of the Western District of Virginia granted preliminary approval of the class action settlement in Sharon B. Healy v. Chesapeake Appalachia, LLC, et al. The court set a Final Fairness Hearing for October 4, 2011 at 9:00 EST. This is the first such settlement by the Virginia Gas Owners Litigation Group. To view a copy of Judge Jones’ order please click the link below.
Order Granting Preliminary Approval of Settlement
A Buchanan County landowner who never wittingly leased the natural gas beneath his property, got a call early this year from a land supervisor with one of the commonwealth’s most powerful energy companies, telling him that there was “uncertainty” whether he or a coal company owned the methane gas stored in the coal seams beneath him and that it would take “years and years” to answer the ownership question in court and suggested the only way to get his money, trapped in a state-run escrow account, was to sign an agreement splitting the money 50-50 with the coal company. Never, according to the affidavit, did CNX mention that the issue of ownership had been settled – in Armes favor – six years earlier by the Virginia Supreme Court. Nor did they mention pending litigation dealing with the very issue at hand. Click here to read the whole story.
Jonathan Hootman from WMMT recently interviewed Don Barrett. To hear the full interview, go to the “Resources” section. To view the WMMT website, please go to www.fracturedappalachia.org.
April 12, 2011 – Claire Galofaro of the Bristol Herald Courier wrote an article about the Court’s recent order denying the gas companys’ request to let Virginia Supreme Court decide one suit’s central question: whether the company is entitled to deduct the various costs of doing business from royalty payments to landowners. Click here to read the whole story.
Today, Judge Jones of the Western District of Virginia issued an important ruling in Legard v. EQT Corporation. The Plaintiffs are very pleased with this decision. The practical effect of the order is that at least some of EQT’s bogus deductions from their royalty checks will be disallowed. This alone should amount to several million dollars in additional benefits to Southwest Virginia royalty owners.
An investigative series by journalist Daniel Gilbert for the Bristol Herald Courier exposed a system that allowed coal and energy corporations in Southwest Virginia to drain natural gas belonging to thousands of landowners without compensation.
The eight-day series, which began in December 2009, explored how gas ownership conflicts led the Virginia Gas and Oil Board to funnel tens of millions of dollars of royalties into escrow accounts over 20 years. Gilbert’s research revealed that gas corporations, virtually unwatched by state regulations, had allegedly established a below-market royalty rate and failed to pay royalties into an escrow account.
Since the series was published, two gas corporations have paid more than $1 million in delinquent royalties, and the Virginia General Assembly passed legislation designed to release royalties held in escrow to landowners.
The Bristol Herald Courier won a Pulitzer Prize for Public Service for the reporting of Daniel Gilbert on the mismanagement of natural gas royalties to landowners in Virginia. Here are the links to the articles in Gilbert’s series:
- “Southwest Virginia’s Natural Gas, Underfoot, Out of Reach, Part 8: Sue, split or do nothing,” December 13, 2009
- “Underfoot, Out of Reach, Part Seven: An audit long delayed,” December 12, 2009
- “Underfoot, Out of Reach, Part Six: Where are the gas royalties?” December 11, 2009
- “Natural gas escrow fund bleeding money,” December 10, 2009
- “Coal companies block efforts to access natural gas royalties,” December 9, 2009
- “Captive assets: conflict over gas rights traps royalties in escrow accounts,” December 8, 2009
- “Siphoning natural gas profits from under the feet of landowners,” December 7, 2009
- “Money made from Southwest Va. gas wells isn’t reaching people it should, “ December 6, 2009