Replies to This Discussion

Permalink Reply by GoshDarn on July 16, 2012 at 17:52

LN:

I believe Henry (who seems to be one of the more well-informed and super-savvy members on GHS) has stated it best.

If I remember correctly, Henry posted that lessors with a particular operator (e.g., Chesapeake {i.e., CHK}) . . . can proceed to round up a group angry landowners and get them all on the same page together and thus hire an attorney (as a group) . . . so as to spread out the cost of suing such-and-such a crooked operator.

But note.  This wouldn't be a class-action suit, per se, as I understand it.  Instead, it seems that it would be classified as a standard litigation suit (i.e., it would be a legal maneuver which might would be quite effective in court . . . if the law (as written) is, in fact, on the side of those who feel that they've been damaged).

Maybe Henry will come onto this thread, when he has time, and explain his understanding of the legal issues.

Also, if a class-action suit was possible -- some folks tend to always besmirch such court vehicles as not being able to return much of a damage award (if such a suit wins in court), since the lawyers involved tend to take a rather big percentage of the awarded damage.

And true, when millions of consumers sign on to so-called classical class-actions against major corporations and the award pie is somewhat limited in payout (being as it has to be divided into so many payout shares per the large number of consumers involved) -- then such a suit can, in fact, come down to kinda peanuts in regards to those who've been harmed by the bad-acting entity.

Nevertheless, there have been certain class-action suits that have also been approved by judges (and these sometimes do have confidentially agreements gagging the recipients of large cash settlements) and such have been awarded at relatively high-dollar amounts (and per a relatively small pool of litigants) -- with the key to the individual payouts being the very narrow-and-limited number of those filing claims per it being a very niche/limited situation.

So possibly -- if there was some way to go after, for example, a bad actor like CHK, then if the pool of litigates is relatively small and if the awarded judgment turns out to be relatively large -- then even after the standard legal fees are paid, each landowner might possibly could see a worthwhile sum of money per such a court award.

Yet, again, the above is all hypothetical, and I am not a lawyer, and the above is not meant to be legal advice.  This is nothing more than general-background FYI.

Finally, if you feel that you have been taken advantage of by a crooked operator, I suggest that you contact the La. Attorney General's office if own your minerals in Louisiana.

The person to get in touch with is Ryan Seidemann at the La. AG's office, and his phone number is:  225-326-6085.

Ryan's e-mail is:   SeidemannR@ag.state.la.us

Good luck, and please let us know what happens.

GD

 

 

 

 

 

 

    

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Permalink Reply by Henry on July 17, 2012 at 0:05

Here are my thoughts, for what they are worth (maybe not much). 

You need to decide why you are dissatisfied.  Being dissatisfied, in and of itself, is likely not a reason for a lawsuit.  If you are dissatisfied because some company takes weeks to respond to your complaints, you are probably just screwed.

if you are dissatisfied because you belive the other party is not in compliance with your contract, or that they walked away from a signed contract (recall the old "Agreement to Lease" scheme) then you may have options. 

Your first optiion is a civil suit.  You would have to sue the company.  This will be very expensive and protracted.  This is not a reasonable option for a small landowner.  The costs would far outweigh any judgement you might receive.

Your second option is to find other mineral owners, who are in the same situation as you, and band together to sue.  I have seen cases where 50 people banded together.  This way, they could share in the expenses.  The drawback is that you would have to keep the 50 people together thoughout a long, expeninsive lawsuit.  This takes a lot of compromise among the parties, but it can work.  This type of case is NOT a class-action suit.  The only people who would get a judgement (if you win) are those who participate as named plaintiffs in the suit.

Third, is a class-action suit.  THis seems not to be practical in Louisiana.  You'd have to prove that there exists a "class" of people, who were similiarly situated, and that the class is large, and the complaint is well defined.

An aside here:  Oil and gas companies will fight any of these suits tooth and nail.  You should not expect them to roll over and settle.  Suits of this type are a real battle, and if you don't have the stomach for it, don't start one.

Fourth, is for all those people who believe they are being scammed to contact the Attorney General's Office.  Register your complaint in a very specific manner.  Tell them exactly how you think you are being scammed -- what contract is being broken, what is the level of damages you are incurring.  If enough people were to complain about something being done by a particular company, then at some point, the AG might decide that a pattern of fraud exists, and then this behavior could move into a criminal issue, and not a civil issue.  At that point, the AG can decide if to file criminal charges.

So, if you think a company is stealing from you, I recommend that you first contact them yourself, to see if it can be worked out.  If that doesn't work, choose an option.

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Permalink Reply by HBP on July 17, 2012 at 3:37

-Class actions (especially for royalty recovery) are difficult procedurally and in some cases impossible, see recent case Williams v. CHK in LA.

- If you sue individually, CHK will drag it out if only for the sole purpose of discouraging similar suits.  This tactic is old and common and the reason is because it can be effective.  For the right issue and the right landowner, it can be worth it, but for the majority, it can be tough.  Even if you do prevail in a suit, you need to also prevail in who bears what costs (atty fees, experts, etc...), otherwise it can still be a pyrrhic victory (ultimately a loss).

-The AG office.  I think this is an interesting idea.  But ask yourself whether the State of Louisiana would take a hard line policy against an operator.  They may do something, but some in Govt would argue that anything too effective would scare off the golden goose.  Of course they argued that with  some of the tax increases by a former Governor but the operators are still here.  So who knows.

I think Henry's and the ideas of others are appropriate, but I'm just mentioning some issues.  I guess it won't hurt to try a bit of everything before you find the solution.   However if a company cannot be motivated, then it will be a tough road.

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Permalink Reply by Andrew on July 17, 2012 at 7:36

I agree that a class action would be difficult because it would be hard to show the same injury. However, I think there is promise if CHK (I'm pretty sure that's who everyone is talking about) is undercutting gas sales by using sham transactions, in which case every royalty and working interest owner in a CHK operated well would be similarly situated. 

Ultimately, in order for the small mineral owners to recover they will have to pool their resources and sue together. CHK will try to divide the suit, but even they wont want to defend 50 different lawsuits in the same parish at the same time. 

If you can prove fraud, which is "a misrepresentation or a suppression of the truth made with the intention either to obtain an unjust advantage for one party or to cause a loss or inconvenience to the other," you are entitled to receive attorney's fees. But note that even if an operator intentionally nickels and dimes you on costs (for example), that doesn't mean what they did was fraudulent. 

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Permalink Reply by Andrew on July 17, 2012 at 7:40

One thing to consider is that this would be a really bad time for CHK to have a high-profile lawsuit from their "partners" in oil and gas development with all the bad news going on right now.

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Permalink Reply by LN on July 17, 2012 at 9:41

Thank you all for  responding with such beneficial advice.

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Permalink Reply by Roy Austin Smith on July 17, 2012 at 13:46

Yes they are getting away with it from day one. They are on the verge of bankruptcy. the ceo has taken them for millions, billions, while the company is losing money. Finally the stockholders got a little upset.  of course, the big stockholders were claening up in a big way and it did not bother them. My company, that i retired from was doing the same thing. Co. going bankrupt and the ceo getting richer every day. My wife hired a lawyer, he wrote a few letters. Got back about the same lies, that i had been getting. could not afford to pay anymore. He said one man cannot fight them, and they are scamming the small landowners. I am hoping that someone buys them out. other companies in the area has always paid more money for the gas. Now their is no gas market, too much gas. Low prices, low production. Sounds about like the old standard oil when the Rockfellers owned it. Good luck.

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Permalink Reply by Larry G Smith P.E. on July 19, 2012 at 7:18

Now lets see, we have an election coming up soon for congressmen and senators in the State of Louisiana, why not get this bunch together and maybe talk about and/or pass a new law that protects the Land owner/royalty owners from the scam that is going on.  I want to see more responsability of the companies to the Landowners/Royalty owners. All the protection it seems is to the operators. We ask for information and get NO Reply, why not? Because they are hiding something. Lets put pressure on the State Reps and Senators to correct this matter. WE Can get them out of office if they do not do something. We can not do much about the operators.

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Permalink Reply by Vernon on July 19, 2012 at 8:32

It looks like some folks in Arkansas have had enough:

http://www.smh.com.au/business/bhp-in-new-us-shale-dispute-20120719...

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Permalink Reply by LN on July 20, 2012 at 8:58

Now, that's what I'm talking about!

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Permalink Reply by Roy Austin Smith on July 20, 2012 at 9:06

Don't leave out Desoto Parish louisiana.

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Permalink Reply by LN on July 23, 2012 at 13:12

^^^^^^^^^Please explain.

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