ATTORNEY SAYS ROYALTY DECISION JUSTIFIED - "Amounted To Fraudulent Conduct"

(02/01/2007)
PLAINTIFFS AWARDED $4 MILLION

The attorney for some of the 8,000 plaintiffs involved in a case challenging what they were paid for natural gas royalties says the decision in the Roane case is fair.

Attorney Mike Carey told MetroNews yesterday that "This is a case that involved 8,000 royalty owners in West Virginia, some of whom were people who had received these royalties for a period of time and were dependent on them for their life's income and people that were defrauded, as the jury found, of several years of royalties."

Carey says the punitive damages are justified.

"This jury found that the conduct of the defendant not only breached the contract, breached their obligation, but amounted to fraudulent conduct."

Chesapeake Energy Senior Vice President Henry Hood said "The parties here were really doing what all other operators in the state of West Virginia have done for years and acted consistently with other operators in other states. It's just a really bad message to be sending to the business community."

"The message being sent by this verdict is gas operators beware that the court system is not going to view your transaction in a fair matter," Hood said.

Attorney Carey told MetroNews "I don't think I want to live in a state that says that a company can commit fraud for over 13 years and then, when they're caught, say 'oh, we'll just pay it back.' There has to be a mechanism, and that's what punitive damages are designed to do, a mechanism to punish them from their conduct and to deter others similarly situated."

A Roane County Judge must still finalize the verdict.