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ROYALTY CASE COULD HAVE BIG IMPACT |
| (02/01/2007) |
| Case should have significant impact
By David Hedges, Publisher A $404 million verdict in a case about the rights of natural gas royalty owners is likely to have a wide-ranging impact on the industry, a West Virginia University law professor said. On Saturday a Roane County jury awarded $404 million to more than 8,000 royalty owners in a class action lawsuit that claimed the royalty owners had been defrauded by companies that drilled wells on their property, including Columbia Natural Resources, now Chesapeake Energy, Patrick McGinley, a WVU law professor who specializes in natural resources and environmental law, said this case was the first of its kind. "I don't know of any case that has raised the issues in this particular case," he said. "I would expect other companies are looking at what their past practices have been and looking at their leases to determine if there is any potential liability," McGinley said. McGinley said the amount of the verdict which included more than $134 million in actual damages was "exceedingly rare" in West Virginia. By comparison, he said a pretrial agreement reached in a case involving DuPont and contamination from the chemical C-8 in the Parkersburg area resulted in a settlement of between $100 million and $400 million, depending on the outcome of medical testing. But around the nation, he said the verdict was not out of line. He cited a 1987 verdict in a Texas case of Pennzoil vs. Texaco that was in excess of $10 billion. What may be a surprise is that the verdict came from a jury in a rural county. "One might suspect that if the case had gone to a more urban area the award could have been higher," he said. "But nobody thinks people in Roane County are wildly liberal and want to give plaintiffs' lawyers and their clients a windfall." McGinley said the trial judge has the discretion to modify the verdict. The verdict includes more than $134 million in compensation for actual damages, plus $270 million in punitive damage awarded to punish the defendants for their actions. McGinley said the punitive award, which is twice the amount of actual damages, would likely hold up ... Read the rest of the story www.thetimesrecord.net
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