Replies to This Discussion

Permalink Reply by essay on August 16, 2011 at 15:06

well i read the opinion on the case in s'port back in may, judge threw out class status in a fairly summary fashion.  still early in the game, and unless i'm totally mistaken there are people leased with chk who have the means and will eventaully press suits without class status, granted most of those might get settled out of court which wouldn't help the little guy much.  at some point chesapeake might just get crossways with folks who have the right combination of deep pockets and hard heads.  they're not exactly an endangered species around here.

 

i believe louisiana mineral code provides for up to double the owed royalties in cases of willful underpayment, plus interest and legal fees.  sounds pretty good to me, i'd wait a few years to get double.  /raises eyebrow

• ▶ Reply

Permalink Reply by DrWAVeSport Cd1 on August 17, 2011 at 7:24

Essay,

Are you referring to case:  Jewel Williams v. Chesapeake Louisiana, Inc., et al?

http://la.findacase.com/research/wfrmDocViewer.aspx/xq/fac.20110513...

 

Judge Foote found that Williams still has the right to pursue her individual claim of unpaid royalties, but not under the "class action" venue.

It has been my experience, that unless a claimant can find "on their own" a substantial number of other "claimants" to suffice even a group of attorneys to file "class action," that won't even be enough for the Courts.  It is difficult to do, and more difficult to achieve a successful verdict (against corporations).

Usually, an "insider" has to "talk" first.  Say a "whistleblower."  And even then, the lawyers and the Courts make out like bandits, not the plaintiffs.   The trick to litigation IMO is to use other people's money, e.g., Feds, SEC, States Attorneys, etc.  Maybe even 2nd party or 3rd party corporate payees that "Companies" have been using "Hollywood accounting" practices on...

Equitable practices are achievable.  IMO, That's all mineral owners have ever asked for.  Premeditated and systematic "cheating" or accounting trickery, is not a practice of good faith practices.  It is quite inequitable.  Mineral owners have no ability to premediated or systematically "cheat" or practice bad faith or play "accounting tricks" on LESSEES.  Only Payors of royalty checks have those opportunities.  There is the rub.

Thus, I believe that the Courts have a higher duty to and should be bound to protect the "mineral owner," because the mineral owner does not have fair play status and cannot "know" what he/she does not know through the undisclosed accounting practices of LESSEES.  The Courts should be protecting the equitable "balance" in the law that protects those who are at a major disadvantage, through no fault of their own,  when it comes to seeking to be made "whole." 

If LESSESS can prove they don't engage in "shady" or unscrupulous accounting pratices, and PAYORS of royalty checks can show "good faith" efforts to pay mineral owners fair compensation, then I will go away and be silenced.

But, Until "Someone" can explain to me how "Net Revenues" and "Total Revenues" EQUAL each other, I will continue to call "Someone" out.   I will continue to "document" my endeavors and continue piling up my paper trail...

Thanks essay for your insights and discussions.

DrWAVeSport Cd1 8/17/2011

 

 

 

 

• ▶ Reply

Permalink Reply by Ben Elmore on August 17, 2011 at 7:52

IMO, that case and the 5th Cir. case it cites, prevents any class action from getting off the ground for royalty underpayment under LA law.  A huge blow to royalty owners even if you don't believe in class actions.   

• ▶ Reply

Permalink Reply by Ben Elmore on August 17, 2011 at 7:58

I could not follow the link to that opinion, so I created a new discussion and posted the text.  Here is the discussion:

 

http://www.gohaynesvilleshale.com/forum/topics/la-case-strikes-down...

• ▶ Reply

Permalink Reply by DrWAVeSport Cd1 on August 17, 2011 at 8:29

BE,

You are probably right.  But, there are other ways to "skin an O&G Company," pardon the expression. 

I do believe that Class Actions have their place and purpose, however, they definitely have their negative sides.  A close relative of mine attempted to get a Class Action status on a "labor" case with state of Louisiana.  When the State investigated, the State of Louisiana settled.  It was pervasive underpayment of overtime wages, agregious minimum wage violations, etc.  Settling was most advantageous for relative and the State.  Lawyers, dozens, saw clearly that a Class Action was advantageous, but relative could never get a straight answer as to how a Class Action suit would benefit relative over settling claim.  Time was also important.  The clock is always ticking where the Law is concerned.  And lawyers wanted way too much, IMHO.

I respect the law professionals.  I have also seen the Corporate Lawyer's might.  It all depends on ones perspective and what one expects to achieve by one's time and effort, the client's and the lawyers. 

My Father won a president setting case against a major O&G Industry company in the 90's.  It took five years due to Company's appeals.  My Father's attorneys in Oklahoma City took 50% of the settlement.  My Father tried to get a "class action" suit against Company, however lawyers said without any prior law cases to cite, my Father would be lucky to get anything.  It took quite a toll on my Father and his health.  But he fought and won.  I will never forget his struggle or his success.  It was remarkable to see the little guy win.

I can never express to my Father how proud I am for persuing his rights to being treated fairly by a huge Corporation, or how proud I am of his struggling and fighting when no one else would listen to him or help him.  No co-workers would speak to him even though they all were facing the same fate and same injustices.

Thanks Ben for your input.  As always a help to GHS.

 

DrWAVeSport, Cd1  8/17/2011 

• ▶ Reply

Permalink Reply by Kat Bloomfield on August 24, 2011 at 13:44

Actually, there was a change made to the right to file class actions under federal law, I believe back in 2007 or maybe 2006, under a statute oddly (notice, the "names" of statutes never are what they substantively are) named the Class Action Fairness Act, aka, "CAFA."  The standards for what constitutes a class were changed and codified for purposes of filing a class action in federal court.  I don't believe Louisiana has changed its law by statute.

Notably, when a class action is filed, the first challenges are to the right to file the claims as a class action and much legal time is spent litigating just that issue before the substantive issues really ever arise, although they are "relevant" to the issue of the viability of a class action. 

It really never ceases to amaze me how much "control" the oil and gas industry legal teams really exercise in court, both state and federal.  The standards in the industry which govern the rightness of industry action are themselves defined by the industry.  For example, the "reasonably prudent operator" standard codified in the Louisiana mineral code.  What defines a "reasonably prudent operator?"  Well, the industry, of course.  While I vehemently disagree with that evidentiary approach, what landowner(s) have the clout and money to go at it? 

Underpayment of royalties do provide for attorneys' fees, by statute in the Louisiana Mineral Code.  But, again, the court decides what is a reasonable fee; yet another non-substantive issue which can involve much litigation and legal time.

There is no doubt that taking on any industry and particularly the oil and gas industry is an expensive, time consuming and very trying operation.  That said, there are significant corporate landowners, who, if "tried" enough or pressed enough by the O&G industry very well may decide to fight this battle.

As an intellectually curious attorney, I must say, it would be an honor and a hoot to be involved in such a case, with the right legal and monetary support.  But,  I love the law and the challeges it poses. 

I can only wish all good luck.  Don't ignore the mineral code's requirements of written demands.  They are crucial to any claim viably to be brought.

• ▶ Reply

Permalink Reply by essay on August 17, 2011 at 8:50

not much insight here, but plenty of discussion.  i'm not a lawyer, geologist, or financial analyst, i'm just a local good old boy that pays attention and talks to a very broad and deep spectrum of people involved with this area.  i have cut chesapeake some slack in the past but after seeing the royalty shenanigans first-hand that's out the window.

• ▶ Reply

Permalink Reply by DrWAVeSport Cd1 on August 18, 2011 at 6:54

Essay,

Some good reading:

 

"Chesapeake The Lost Decade"

http://seekingalpha.com/article/287860-chesapeake-the-lost-decade

and

"Chesapeake CEO McClendon cashes in on well deals"

http://www.reuters.com/article/2011/08/15/us-chesapeake-deals-idUST...

 

To bad Mr. Chesapeake doesn't care for his stockholders or his royalty owners...

IMO, Any CEO who cuts himself IN as if this is a "privately held" company when Chesapeake Energy is NOT...These are PUBLICLY HELD CORPs...is suspect to the Nth degree.

The Board of Directors, IMHO, Need to be fired!

 

DrWAVeSport Cd1  8/18/2011

 

• ▶ Reply

Permalink Reply by DrWAVeSport Cd1 on August 18, 2011 at 7:12

Let's cut to the chase...

Looks like we have found one part of the puzzle as to why Chk royalty checks are lower per $/mcf than all the other Producers in the Haynesville...2.5% from every well...

I'll bet back in February 2011, when Chk filed that my sections well (#240427) had reached "severance refund" payout (whatever the @^&**!& that means)...Mr. Chk started receiving his 2.5%.   Things still get more and more "shady" IMO.

 

 

• ▶ Reply

Permalink Reply by JHH on August 18, 2011 at 7:38

i'm not sure... but it might have something to do with chesapeake contracts.  i think chesapeake signed contracts to sell gas at a certain price and if the price goes too high... chesapeake loses money... and if it drops below a certain level...chesapeake makes money.  don't know how long the obligation lasts and i think you are right... CEMI is the "laundering agent" somehow... and the royalty owner loses no matter what.

 

• ▶ Reply

Permalink Reply by Henry on August 17, 2011 at 0:05

Where are the parish police juries in all this?  I'll guess that DeSoto Parish leased a gazillion acres to Chesapeake.  Are they unhappy with their payments?  If so, why are thy not complaining and/or doing something about it?

• ▶ Reply

Permalink Reply by Bacon on August 20, 2011 at 14:53

CHK is a partner in a well we participate in and dealing with them for the last few months has been difficult.

• ▶ Reply

• ‹ Previous
• 1
• 2
• 3
• 4
• 5
• Next ›
• Page