Litigation

Broome County | Chesapeake Energy | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | New York | Tioga County (NY)

Chesapeake to Release 12K Acres of NY Leases Next Week
September 5, 2013September 5, 2013

About a month ago, MDN told you that Chesapeake has decided to end their fight with New York landowners over extending their leases (see Chesapeake Energy Throws in the Towel on NY Shale Drilling). Although it’s taken the past month to iron out the paperwork, it seems that Chesapeake (and NY landowners) will finalize and sign an agreement “sometime next week” to release 12,000 acres of leases in Broome and Tioga counties.

Chesapeake walking away from these leases is bittersweet. Sweet because it releases landowners from old leases signed before fracking was even contemplated, allowing them to re-sign a new lease with better terms. Bitter because it indicates Chesapeake is unwilling to put up with Gov. Andrew “Ditherer” Cuomo any longer as he agonizes over whether he will or whether he won’t allow fracking…
Read More “Chesapeake to Release 12K Acres of NY Leases Next Week”
Industrywide Issues | Litigation | Preston County | Statewide WV | West Virginia

Landmen & Drillers: 6 Steps to Keep a Lease Out of WV Court
September 5, 2013September 5, 2013

The JDSupra Law News website reports on a West Virginia court case that may have far-reaching consequences for landowners in WV and for landmen and drillers operating in the state. The case is called Barber v. Magnum Land Services, LLC, a recent case filed in Preston County, WV, now transferred to the Northern District. The Barber case, according to JDSupra, has the potential to settle many other outstanding cases along the same lines and is being used as a proxy and precedent for other cases.

The Barber case alleges a landman (from Magnum Land Services) pressured a landowner into signing a lease to allow drilling with the statement that if the landowner did not sign, their land would be drilled under anyway and they would not receive any royalties–a veiled (and inaccurate) reference to “the law of capture” in WV. The landman also did not make the landowner aware of other signed offers, withholding important information about the potential value of the lease. The plaintiffs in Barber are using several legal arguments to nullify the lease. We won’t delve into the technicalities of the case (click below to read about it on the JDSupra website). However, JDSupra’s conclusion offers six steps landmen and drillers should adopt in the way they interact with landowners–steps that will help keep their leases out of court:
Read More “Landmen & Drillers: 6 Steps to Keep a Lease Out of WV Court”
Hydraulic Fracturing | Industrywide Issues | Litigation | New York | Regulation | Statewide NY

JLCNY Fact Sheet on “Takings” Lawsuit – We Need More $$
September 5, 2013September 5, 2013

The Joint Landowners Coalition of New York (JLCNY) is ready to sue New York State on behalf of landowners for “takings”–the concept that the state has illegally stopped property owners from using their land and therefore must compensate them for it. The only thing the JLCNY needs now is money–and lots of it–to pay legal and research expenses. Once they have the cash, the lawsuit will go forward.

Dan Fitzsimmons, president of the JLCNY, sent an email yesterday with a “fact sheet” about the lawsuit (see it below). The fact sheet attempts to clear up lingering questions about the lawsuit–its purpose, the way it will go forward, and when it will go forward. Please take time to donate to the JLCNY’s legal fund (MDN is a proud contributor)…
Read More “JLCNY Fact Sheet on “Takings” Lawsuit – We Need More $$”
Energy Services | Heckmann | Industrywide Issues | Litigation

Nuverra Environmental Sued Over Stock Price Tumble
September 4, 2013September 4, 2013

At the end of July, MDN told you (sort of tongue-in-cheek) that Nuverra Environmental Solutions (formerly Heckmann), a company that recycles and otherwise disposes of shale drilling wastewater and leftover rock and dirt from drilling, was blaming “too much success” in the Marcellus/Utica for their poor quarterly earnings report (see Wastewater Company Nuverra: Too Much Success in Marcellus/Utica). Nuverra’s rapidly expanding Marcellus operation led to more outsourcing and less profitability, it seems. It also seems Nuverra now has a much bigger problem than a bustling Marcellus–they’re being sued in a class action by investors.

The class action, filed by very active law firm Robbins Geller, alleges that Nuverra previously “issued materially false and misleading statements regarding the Company’s financial performance and future prospects.” Because of the alleged false statements, Nuverra’s stock traded at artificially inflated prices. What went up (the stock price) has now come down (see the chart below), and investors (or at least the lawyers) are not pleased…
Read More “Nuverra Environmental Sued Over Stock Price Tumble”
Chesapeake Energy | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | Pennsylvania | Statewide PA

Chesapeake Settles PA Royalty Lawsuit for Pittance: $7.5M
September 3, 2013September 3, 2013

In July, MDN told you about a class action lawsuit by some Pennsylvania landowners against Chesapeake Energy over the issue of deducting certain costs from post-production when calculating royalties–costs that the landowners say are not listed in the original lease and for which Chessy does not have the right to deduct (see Some PA Landowners Mull Decision to Sue Chesapeake over Royalties). A number of landowners joined the class action lawsuit. The lawyers worked feverishly and both sides have now settled.

Chesapeake will pay $7.5 million to settle the lawsuit, to be share with the lawyers (of course) and then amongst the landowners. Apparently the settlement will benefit “several thousand leaseholders” who have the option to either accept the settlement or continue on their own by filing their own lawsuit…
Read More “Chesapeake Settles PA Royalty Lawsuit for Pittance: $7.5M”
Energy Services | Industrywide Issues | Litigation | Pennsylvania | Pipelines | Regulation | UGI Energy Services | Wyoming County (PA)

UGI Victory: Judge Rules in Favor Marcellus Gate Station in NE PA
September 3, 2013September 3, 2013

MDN told you back in April about UGI’s (a Scranton-area public utility) plan to build a new pipeline connector–called a gate station–so they could tap into abundant, cheap and locally produced Marcellus Shale gas to sell to its customers. UGI’s plan will lower the gas bill for thousands of its customers and use local Marcellus gas instead of gas piped in from the Gulf Coast. Fantastically, some hardened anti-drillers opposed the new gate station with claims of air pollution, dire consequences, blah blah–the usual banal excuses–even though there has been another gate station operating in the area for more than 50 years (see Anti-Drillers Try to Stop Pipeline Connector in NE PA).

Anti-drillers tried to stop the UGI gate station by invoking local zoning ordinances at the town level. Fortunately, a level-headed administrative law judge has put a stop to those efforts and has ruled that UGI may go ahead and build the new Marcellus gas gate station…
Read More “UGI Victory: Judge Rules in Favor Marcellus Gate Station in NE PA”
American Energy Partners | Energy Companies | Industrywide Issues | Litigation | Ohio | Statewide OH

McClendon Gets Sued in OH Over New Company’s Name
September 3, 2013September 3, 2013

It’s no secret that coal has taken a beating from abundant, cheap shale gas. Natural gas burns cleaner than coal–there’s just no disputing that fact. And because of it, natural gas has displaced coal at a number of electrical generating plants around the country. However, coal remains a very important fossil fuel that powers much (in fact most) of American electricity. So it’s no surprise that the owner of a number of Ohio coal mines is a bit miffed with Aubrey McClendon.

Robert Murray operates a coal mine near Beallsville (Monroe County), OH under the name American Energy Corp. Aubrey McClendon named his new shale oil & gas company American Energy Partners. Murray is miffed enough with McClendon to sue him for misappropriation of the name American Energy. He believes McClendon has intentionally tried to confuse the marketplace…
Read More “McClendon Gets Sued in OH Over New Company’s Name”
Energy Companies | Hydraulic Fracturing | Industrywide Issues | Litigation | New York | Norse Energy | Regulation | Statewide NY

Norse Energy 2Q13: Concerned About Remaining ‘a Going Concern’
August 30, 2013August 30, 2013

MDN told you a few days ago about the sad state of affairs at Norse Energy (see Norse Can’t Dump NY Leases at Auction, Creditors Get Ready to Sue). The company released their second quarter update today (full copy embedded below). The update is based on the assumption the company will remain “a going concern.” They state that if they can’t sell their 130,000 acres of New York leases at a decent price, they’ll have to turn the lights off and walk away. The company is currently under bankruptcy protection and has been ordered to sell their last remaining asset–the leases.

One item from the 2Q13 update that caught our attention is that a group of approximately 60 landowners with a collective 6,000 acres are suing Norse to end their leases. Norse had invoked force majeure on the leases–a legal maneuver that states, roughly, “due to a circumstance beyond our control we’re extending the original lease term.” Of course the unforeseen circumstance is the now 5+ year moratorium on drilling in New York. If Norse starts losing already-signed leases left and right, they’ll have no assets left to sell at auction, so they are vigorously fighting the action by the landowners…
Read More “Norse Energy 2Q13: Concerned About Remaining ‘a Going Concern’”
Hydraulic Fracturing | Industrywide Issues | Litigation | New York | Regulation | Statewide NY

BREAKING: NY Court of Appeals will Hear Dryden/Middlefield Case
August 29, 2013August 29, 2013

Important and breaking news as MDN gets published… The New York Court of Appeals (our state’s highest court) has decided to review a lower court ruling on the Dryden and Middlefield cases in which townships banned shale drilling and fracking for everyone in the town. This is fantastic news for New York landowners. We will have more analysis tomorrow. In the meantime, here’s a statement issued by the Joint Landowners Coalition of New York:
Read More “BREAKING: NY Court of Appeals will Hear Dryden/Middlefield Case”
Energy Companies | Industrywide Issues | Litigation | New York | Norse Energy | Statewide NY

Norse Can’t Dump NY Leases at Auction, Creditors Get Ready to Sue
August 28, 2013August 30, 2013

Norse Energy, the little energy that ultimately couldn’t (drill, because of Andrew Cuomo), bet big on New York State. It was the wrong bet. Norse holds 130,000 acres of leases in New York and literally bet the company’s future on New York’s willingness to allow fracking. The company lost the bet when they went into bankruptcy last year and finally had to put the only assets they had left on the auction block–130K leased acres–earlier this year (see Bankrupt Norse Energy to Sell NY Leases – Who Will Want Them?). As we stated at the time, who would be willing to purchase the Norse leases with a) Cuomo still not decided on whether drilling can happen in NY, and b) the courts still not decided about whether towns can ban drilling. Our answer: no one will be willing.

Norse has confirmed our logical deduction. The company issued a short statement yesterday stating they received a few low-ball bids for the leases, but the bid amounts are not near enough to satisfy creditors left holding the bag. Those creditors are now looking at filing lawsuits against Norse and its management…
Read More “Norse Can’t Dump NY Leases at Auction, Creditors Get Ready to Sue”
Chevron | Energy Companies | Fayette County | Industrywide Issues | Litigation | Pennsylvania | Statewide PA

Chevron Wins Right to Build Freshwater Pond for Fracking in PA
August 27, 2013August 27, 2013

Last week the Pennsylvania Superior Court upheld a lower court ruling in favor of Marcellus Shale driller Chevron, declaring that Chevron has the right to construct a pond (“impoundment”) to hold fresh water used for fracking. The landowners in question (Mr. & Mrs. Humberston) did not want the pond constructed on 11 acres of their land but since the lease they signed did not specifically limit it, and since having lots of fresh water to frack with is a requirement for drilling (a reasonable expectation), the court ruled Chevron was within its rights to construct the pond…
Read More “Chevron Wins Right to Build Freshwater Pond for Fracking in PA”
Industrywide Issues | Litigation | Pennsylvania | Regulation | Statewide PA

Should the Full 7-Member PA Supreme Court Re-Hear Act 13 Case?
August 19, 2013August 19, 2013

The PA townships that sued the State of Pennsylvania last year over a section of the new Act 13 law that prevents towns from slapping their own zoning requirements on top of a uniform state zoning standard sense they may have won at the state Supreme Court level (which will allow them to zone) and are arguing against having oral arguments re-heard by all seven justices.

The original case–arguably one of the most important to come before the state Supreme Court in a long time–was originally heard by seven justices last fall–but one of the seven has since resigned due to campaign fundraising irregularities. The six justices remaining are three Democrats and three Republicans. Court watchers predict the Act 13 case decision will break down along party lines. If it’s a split decision at the Supreme Court level, the lower court ruling which favors the towns will stand. So the towns are arguing they don’t want the case re-heard by a full panel, now that a seventh justice (a Republican) has just taken the bench.
Read More “Should the Full 7-Member PA Supreme Court Re-Hear Act 13 Case?”
Industrywide Issues | Litigation | Pennsylvania | Statewide PA

PA Court: Preparing to Drill Locks Up All Land in a “Unit”
August 19, 2013August 19, 2013

PA landowners listen up: If your gas/oil lease is near the end of its term with no drilling and you looking forward to signing a new lease, you may have a problem. If the driller holding the lease decides to do work in preparation for drilling on your neighbor’s property, you’re locked in too if your land is part of the drilling “unit.” According to a court case recently decided in PA, if a driller prepares to drill (which may be as little as moving around some dirt, depending on the language in the lease), the obligations of the lease are then fulfilled and all land in that unit is locked in–even if actual drilling doesn’t happen for a long time.

In legalese it’s called the habendum clause…
Read More “PA Court: Preparing to Drill Locks Up All Land in a “Unit””
Energy Companies | Industrywide Issues | Litigation | Pennsylvania | Range Resources Corp | Washington County

Bombshell Disclosure in “Final” Document of Hallowich Court Case
August 13, 2013August 13, 2013

Two weeks ago, MDN told you the final document in the long, drawn-out affair known as “the Hallowich family” court case had been released (see Last Document Released in Hallowich v Range $750K Settlement). We were wrong.

Yesterday, the final final (pinky swear) last document was finally finally released. Until the next one comes along… Yesterday’s document was the confidential settlement agreement (embedded below). It contains a bombshell surprise…
Read More “Bombshell Disclosure in “Final” Document of Hallowich Court Case”
Bradford County | Chesapeake Energy | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | Pennsylvania

Bradford County, PA Landowners Sue Chesapeake over Royalties
August 13, 2013August 13, 2013

About a month ago, MDN told you that a couple of Scranton-area lawyers were looking for landowners with Chesapeake Energy leases who believe they’re getting the short end of the royalty stick, to participate in a class action lawsuit against Chessy (see Some PA Landowners Mull Decision to Sue Chesapeake over Royalties). At issue is how royalties are calculated–what is considered to be a post-production cost. Some landowners say Chessy is claiming too many expenses and in the process shorting payments to them.

Some landowners in Bradford County, PA have decided to join the lawsuit:
Read More “Bradford County, PA Landowners Sue Chesapeake over Royalties”
Industrywide Issues | Litigation | Pennsylvania | Regulation | Statewide PA

New Twist in PA Act 13 Case: Motion to Re-Hear Oral Arguments
August 8, 2013August 8, 2013

A new twist in the ongoing court battle over Pennsylvania’s still relatively new Act 13 Marcellus Shale drilling law. A court case has been before the PA Supreme Court since last year challenging provisions in the new law to replace local zoning of oil and gas drilling with a uniform, statewide standard. As MDN told you a few weeks ago, it appears the newly sworn-in seventh justice on the PA Supreme Court will not participate in the decision, leaving a split 3-3 decision a likely outcome (see PA Problem: Act 13 Zoning Case to be Decided by 6 Supremes, Not 7). Split decisions are not good for anyone, and a split decision in this case would leave the lower court rulings stand, gutting part of the Act 13 law.

The new twist: On Tuesday, the PA state Public Utility Commission (PUC) and the Dept. of Environmental Protection (DEP) filed a joint request that the entire seven-member court re-hear oral arguments in the case so the entire court can make a decision and finally lay this thing to rest, one way or the other. The towns that brought the lawsuit in the first place are objecting because they think they have a better chance at winning with a six-justice panel–a split decision means they win. Are the towns trying to cheat justice?…
Read More “New Twist in PA Act 13 Case: Motion to Re-Hear Oral Arguments”