LAWSUIT CLAIMS COLUMBIA GAS COMMITTED COMMON FRAUD - Class Action Suit Says Company Cheated Leaseholders

(07/28/2004)

By Bob Weaver A class action lawsuit has been filed against Columbia Natural Resources, alleging CNR cheated royalty holders, many of them in Roane County. The suit contends the company made illegal or unauthorized deductions when selling gas to their affiliated companies at less than a fair price. The suit accuses CNR of committing common fraud. The alleged problems surfaced early-on regarding CNR's deep well drilling in Roane's Geary District. The problems appear to center on illegal metering, collecting and selling of natural gas at less than market price. The suit reportedly contends illegal charges were made against royalty holders, which the company denies. The lawsuit is about whether CNR can make deductions from royalties it pays to its oil and gas lease holders and whether those deductions were intentionally concealed from leaseholders. The class action suit, which is now under the jurisdiction of Judge Thomas Evans III of Spencer, will determine if CNR violated financial responsibilities and broke written and implied contracts to the suing parties. The suit asks for the deductions from royalty payments and illegal gas sales be returned to the leaseholders. It also asks that civil penalties be assessed for each violation of the Consumer Protection Act, plus other compensatory and punitive damages, interest and costs be paid to the parties bringing the suit. The Charleston law firm of Masters and Taylor and George Scott of Carey, Scott and Douglas are representing the plaintiffs. The law firm has been contacting individuals who have had an oil and gas lease with Columbia since July 31, 1990. The class action representatives are Garrison G. Tawney, Lela Ann Goff, Vernon Goff, Janice E. Cooper, Clifford Cooper, Larry G. Parker, John W. Parker, Richard Ashley and Myrtle Jones by her attorney Orton Jones.

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