(07/17/2010)
By David Hedges, Publisher
thetimesrecord.net

A Roane County court case that was one for the record books is finally over - almost.

Last week, Roane Circuit Judge Tom Evans signed an order that concludes administration of settlement claims in the case known as Tawney vs. Columbia Natural Resources.

That will allow the more than 10,000 defendants in the class-action lawsuit over natural gas royalties to receive the final 10 percent of their money. Evans ordered the so-called "hold-back" while disputed claims were being reviewed.

The case began nearly 20 years ago when retired Roane County teacher Garrison Tawney complained he wasn't receiving all the royalty from a natural gas well drilled on his property.

Tawney died before the case came to trial.

"It took a lot longer than I ever imagined," Charleston attorney Marvin Masters, lead trial attorney for the royalty owners, said.

"But I think the case accomplished a lot and went a long way to embed royalty owners rights," Masters said. "Things should be a lot more transparent now."

The suit claimed CNR, later purchased by Chesapeake Energy, wrongfully deducted expenses from royalty checks and shortchanged royalty owners for gas sold under long-term contracts.

The suit also challenged the validity of flat-rate leases in place for generations that paid royalty owners as little as $100 per year.

"I don't think it ended the problem," Masters said of the verdict and related court rulings. "But hopefully in the future there will be more consideration given to paying royalty owners what they are due.

"The gas companies have all the data and the royalty owner has to trust they will be paid what they are due," Masters said. "Hopefully, that trust won't be breeched in the future."

Lawyers spent about two years on the case before filing the first class-action lawsuit in Roane County history in 2003.

A three-week trial in January 2007 ended when jurors returned a $404 million verdict that included $134 million in compensatory damages and $270 million in punitive damages.

The decision was the third largest jury verdict in the nation that year.

The verdict was upheld by the state Supreme Court and was pending in the U.S. Supreme Court when the parties agreed to a $380 million settlement.

Most plaintiffs in the case have already received the bulk of their award after a lengthy process to determine how much each royalty owner was owed.

But Evans ordered 10 percent of the funds set aside until some disputed claims were settled. That process is nearly complete.

A claims administrator appointed by the judge will continue to resolve the handful of outstanding complaints.

Some $650,000 will remain in escrow, which the judge's order said should be sufficient for any remaining claims still in dispute.

Evans is allowing claims to be filed up until July 23, noting problems identifying certain members of the class because of heirship and other issues.

The major issue remaining to be resolved involves interest to be paid by CNR and a co-defendant, NiSource. A hearing on that issue set for next week was postponed and a new date has not been set.

thetimesrecord.net


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