(05/24/2008)
The West Virginia Supreme Court has rejected gas and electric utility NiSource Inc.'s appeal of a $404 million verdict in a class-action lawsuit brought on behalf of thousands of West Virginia property owners.

A Roane County jury ruled in favor of the royalty holders.

The court this week turned down a Massey Coal appeal over a $270 million settlement awarded a Wheeling steel company.

ROYALTY OWNERS CLAIM FRAUD

Cheaspeake Energy is now one of the principal players in the gas royalty lawsuit.

Mike Carey, the plaintiff's attorney, says he's pleased the court decided not to hear the case.

NiSource Chief Executive Robert Skaggs Jr., on the other hand, says he's surprised and disappointed.

The suit accused NiSource and Chesapeake of failing to make proper royalty payments to 8,000 royalty holders who'd leased their gas rights.

Royalty owners claimed they were victims of a fraudulent practice.

A Roane County jury agreed.

Roane county teacher and farmer, the late Garrison Tawney, told the Herald, "This is the biggest and most blatant rip-off I have witnessed in my lifetime," after the companies started charging their production costs back to the royalty holder.

"The Court's decision to not even address the substance of an appeal in a case of this significance, particularly in light of the $270 million in punitive damages awarded at the trial court level, is unprecedented and contrary to the most basic principles of fairness. We firmly believe in the merits of our position and will continue to vigorously pursue our arguments before the U.S. Supreme Court," Skaggs said.

MASSEY LOSES APPEAL IN $220 MILLION STEEL CASE

In a separate high-profile case, also in 2007, a northern panhandle jury found Massey Energy should pay $220 million in a coal contract dispute with Wheeling-Pittsburgh Steel.

Massey was accused of violating their contract with the steelmaker, sending steel abroad because they got a better price.

The state Supreme Court has now refused to even consider Massey's appeal.

Massey Energy's General Counsel M. Shane Harvey said "We strongly believe that the case should be reviewed by an appellate court and we will vigorously explore all options, including an appeal to the United States Supreme Court."


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