By David Hedges, Publisher
Times Record-Roane County Reporter

Some are calling a $404 million verdict returned in Roane County Saturday a godsend to natural gas royalty owners who have been wronged for years.

Others are saying it could be the sound of a death knell for future gas exploration in the state, and the royalty payments that would come with it.

The reaction to the verdict was also immediate, as both Chesapeake Energy and NiSource, two of the defendants, posted responses on their company's Web sites Sunday.

Chesapeake's statement said the company was "surprised and disappointed" by the outcome.

"If allowed to stand, the verdict would have far-reaching negative implications for all gas producers in West Virginia and would reinforce the hostile legal environment all businesses face in West Virginia," the Chesapeake response said.

NiSource called the outcome "an unprecedented and excessive jury verdict that, if not overturned, could have a chilling effect on future oil and natural gas development in the state."

Unless the verdict is set aside or reduced, NiSource said it planned to appeal.

The company also expressed disappointment that the judge in the case did not allow the presentation of key evidence. The company said the verdict would have been different had the jury been allowed to hear all the evidence.

Roane Circuit Judge Tom Evans presided over the three-week trial, as well as monthly pre-trial hearings since the case was filed in 2003.

One of the attorneys who filed the case, former federal prosecutor Mike Carey, said the verdict was justified.

"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 dependant on them for their life's income and people that were defrauded, as the jury found, of several years of royalties," Carey said.

Carey also defended the amount of the verdict for punitive damages that amounted to $270 million.

"I don't think I want to live in a state that says 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," Carey said, "a mechanism to punish them for their conduct and to deter others similarly situated."

A Chesapeake executive said the companies involved had done nothing that was not in line with others in the industry ...

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