Replies to This Discussion

Permalink Reply by Steve on December 3, 2013 at 13:17

The DNR and the La. Dept of Revenue have been having this major severance tax collection problem since at least 2010, and apparently before that since $26 million was uncollected then, yet the solution is as simple as fixing a red tape nightmare - why am I not surprised? At this rate the problem will never be fixed and the auditors will be writing this issue up every year from now on since nothing will be done about it.

• ▶ Reply

Permalink Reply by lotoarmy on December 3, 2013 at 6:56

Forget the legal side of it.  They have floors full of lawyers that are 3 steps and years ahead of anyone you can hire.

• ▶ Reply

Permalink Reply by Steve on December 3, 2013 at 13:36

There are many good lawyers out there that can bust CHK's bank no matter how many lawyers they hire. If CHK did anything wrong and the money is big enough, there are lawyers that will turn them and their floors of lawyers into toast.

• ▶ Reply

Permalink Reply by Skip Peel - Mineral Consultant on December 3, 2013 at 14:12

Maybe Steve.  Here is the problem.   Discovery.  The documents required to decipher the complex web of treatment, transportation and marketing amongst multiple parties, related and/or unrelated, on a specific case basis are in the possession of the operator, in this case CHK.  Plaintiff attorneys must figure out how to ask for specific documentation and then the court must require the defendant to comply fully.  The plaintiff attorney(s) must be skilled in knowing just what to ask for and the judge must be diligent in making sure it is provided.  Judges usually don't allow fishing expeditions but require specificity in doc requests.  Then comes the question of interpretation.  It is difficult to find experts acceptable to a court who will testify for the plaintiff.  And of course the defendant has unlimited experts ready to testify for them.  Even experienced O&G attorneys need experts when dealing with the arcane world of getting a molecule of methane from a well to an end user.

• ▶ Reply

Permalink Reply by Steve on December 3, 2013 at 15:47

 You are probably right Skip but I believe a local State judge, or possibly a Federal judge, who suspected a corporation, like CHK, was screwing the locals could cause some serious angst at that oil companies headquarters if he wanted to. I have seen some very talented lawyers who were representing very large corporations shake in their shoes before a Judge they knew could/would castrate them if he/she decided to. I would start with a local Judge and lawyers that have a good rapport with him. The defendant would find themselves buried in document requests and interrogatories. All you need to do is to win one case that gets reported and their day of reckoning will come. Maybe I am too optimistic, but I believe it is one's civic duty to get even when you get screwed. Since I am not leased to CHK I can say that.  LOL

• ▶ Reply

Permalink Reply by Skip Peel - Mineral Consultant on December 3, 2013 at 16:08

I wish it were that simple.  Plaintiffs with competent representation do occasionally win verdicts in district courts.  However defendants always appeal because they know their chances of gaining a reversal improve at each subsequent level.  The 2nd. Circuit Court of Appeals, as an example, has overturned several rulings in favor of mineral owners in cases with which I am familiar including one in which I was the primary expert witness.  The industry will spend the time and treasure to go all the way to the State Supreme Court as a matter of course.  They prevail with greater frequency at both judicial levels.  The jurisdiction of preference for the industry is always federal court over state district court for the very same reasons.

• ▶ Reply

Permalink Reply by Steve on December 4, 2013 at 3:11

   True, it is not simple, but, not always as hard as it sounds either. I have seen some very big settlements made after a judgement or even during or after a mediation hearing. If a case reaches trial and a defendant is handed a large loss, they always threaten to appeal - this is how they settle the case for less than the judgement.  Unfortunately sometimes, but not that often, plaintiffs have to get the judgement 1st to be in a position to collect damages, unless a mediation judge pressures the defendant - which often happens too. A lot depends on how strong or weak the plaintiff's case is and whether a jury trial is involved and the extenuating consequences to the defendant's business reputation. Until the evidence is known, no one can predict an outcome of an action against CHK.  I was involved with an individual's case against a large insurer for theft of his intellectual property.  The judge talked the elderly plaintiff into accepting $10 million instead of taking the case before a jury with the advice that should he get a large jury award the defendant insurer would appeal the case. The plaintiff was 74 years old and the judge convinced him he would probably die of old age waiting for the appeal to be heard. The publicy traded insurer thought they might even win the case, but was afraid of the negative publicity if they lost. CHK would have to consider such a possibility no matter how much confidence they have in the legalese of their contracts. I have also seen a judge nullify over $250 million in contracts because the terms were unfair - the risk of that happening could put every lease agreement an operating company has in limbo commercially for years - banks will not lend and investors will not buy contracts which are subject to a pending lawsuit or judicial/regulatory review. If an operators' lease agreements/contracts are involved in a legal action this has a chilling effect that makes them  virtually worthless until their legal issues are resolved  This particular company had to buy back all $250 million in contracts it had transferred to investors to appease the investors while the case was pending and to avoid getting the investors added to the list of defendants. The Defendant was nearly bankrupt from loss of credibility. There are some severe downsides to corporation's cheating , IF that is what has happened here. I would not throw in the towel simply because it looks like a hard row to hoe - at this point it is time for qualified attorneys to evaluate the case. I also advise the victims to not be discouraged if the 1st attorneys they go to turn the case down. I once sent a case to 3 different law firms before 1 took the case - the other 2 were afraid of the cost to pursue the claim on a contingency basis - the end result was a $20 million policy limit payout to the plaintiff by the insurer of the defendant and would have been much more $ from the defendant itself had the defendant not filed bankruptcy the day before court ordered mediation. Getting the right lawyers was essential - often the local lawyer, if he has faith in a claim will farm out the case to better lawyers.

All this said, If I were robbed, I would pursue it at least to the point of being turned down by several lawyers. Big settlements often come out of weak cases because of the extenuating consequences that defendants are exposed to. In this case it is a publicly traded company with lots of exposure in several states, which makes them vulnerable. Shoot for their Achilles' heel is my advice. Ever hear about David vs.Goliath or the bigger they are the harder they fall? In my humble opinion, these are not myths. I have seen it happen more than once after 30 years of being closely involved with lawsuits . Look for a good lawyer and bring him good facts and see what happens is my advice to anyone who feels he was cheated by any operator.

• ▶ Reply

Permalink Reply by Skip Peel - Mineral Consultant on December 4, 2013 at 3:40

Even when a defendant has an excellent case and spends the money to finally get to a trial date, CHK will offer to settle.  Regardless of how a plaintiff and their attorneys may feel about their odds of prevailing in a ruling the outcome is unknowable.  A settlement may get what the plaintiff ultimately wants or something close enough that they agree to settle out of court.  When this occurs no case law is created and settlements usually contain confidentiality agreements.  The next plaintiff with the same cause of action starts from scratch.  Owing to the complexity of the facts in these cases, the time and expense involved and the tendency of courts to favor the defendants (the energy industry) few experienced attorneys or law firms will agree to representation on a contingency fee basis.

• ▶ Reply

Permalink Reply by Steve on December 4, 2013 at 5:18

Maybe, but you never know until the contracts, the payment/deduction facts and any prior payment precedents that were set are reviewed by competent plaintiffs lawyers. All it takes is one lawyer to agree to represent you. If you have any piece of a case at all, one will, at a minimum send a demand letter and a threat to sue, which could bring about a change in payments for that landowner. All I can say is, I personally would not roll over just because it may appear on the surface to be a long shot. In the scheme of things CHK is already in trouble elsewhere and they are a pint-sized company that can't handle a lot of legal problems. in fact, the assumption that it is a long shot and a hope that no lawyer will take the case may be all CHK is relying on. CHK's lawyer(s) could be all wrong about what they think they can legally do, or in this case, maybe just get by with. Corporations frequently have one staff attorney  who is not always competent in assessing risk, advising them - especially if their CEO is a cheapskate. I am betting that it isn't that much of a long shot to find a lawyer or to win a settlement if someone can show CHK has even "possibly" breached their contract, especially if CHK started paying at one level then later upped the deductions in their favor - even a breach in the spirit of a contract is a possible claim. Maybe we will see what happens if the McDonald Law Firm files a lawsuit?  If I felt I was a victim landowner, I would start by contacting the law firm today using the contact info posted by Kim Fell below to ask them what the plan is and the issues at dispute. They may have a claim you can join or they can advise you of facts that you can take to your personal attorney. If you don't feel comfortable with talking to them directly just ask your attorney to call the McDonald Firm and inquire on your behalf - certainly he will not charge you for that and he may get a potential case out of the call.

• ▶ Reply

Permalink Reply by Skip Peel - Mineral Consultant on December 4, 2013 at 5:32

CHK has many company attorneys.  They help to choose the contract legal representation in each individual jurisdiction and oversee the handling of each case. CHK hires the best firms for the location and nature of the litigation.  Experienced O&G attorneys don't make assumptions about what CHK may or may not do.  I've been involved directly and indirectly in a number of suits.  My comments are merely my opinion.  However that opinion is informed by numerous actual court cases some of which involved CHK.  Those that wish to bet on litigation aimed at CHK may do so.  And good luck to them.

Permalink Reply by Steve on December 4, 2013 at 10:36

 I think I have beat this discussion to death, so these are my final comments: I take what you say about CHK's legal team at face value. What I am hearing from your reply is that CHK has been expecting to have to defend itself in court so they are lawyered up. Your personal experience with their legal army should serve as a very good warning to anyone on GHS that may be contemplating leasing their land to CHK or having anything at all to do with them.  I hope this message gets out loud and clear. For those of you who are thinking of bringing or joining an action against CHK  - don't be scared off by any defendants line-up of lawyers or experts that can be paid to say anything. That is a sign of a bad corporation  - there 1st line of defense is called "intimidation" in other words, You can't touch us because we have good lawyers and we hire experts. Fortunately some plaintiff's lawyers aren't intimidated that easily. The facts of a plaintiff's case can be hard for even the smartest lawyers to overcome. I hope justice will be prevail. Hopefully other operators will do a better job than CHK has in generating goodwill. Landowners have to be able to trust the landmen and the operators for these shale plays to be successful.

Permalink Reply by Kim Feil on December 3, 2013 at 9:24

There are lawyers starting a class action suit against Chesapeake for underpayment of royalties. Please look into it if you fall into this class....they may take Louisiana clients????
The McDonald Law Firm might just be the first to come out seeking clients who feel that Chesapeake Energy has underpaid them on their gas royalty interests. An Ad on page 5B of Sundays Fort Worth Section advertise a Free Analysis and Consultation ( If no recovery there is no fee ) Contact us Today 817-717-5081 www.DWMLawFirm.com
address: 3100 West 7th St. Suite 230 Fort Worth, Texas76107.

AFter Chesapeake had the extreme nerve to attempt to underpay not only the most prominent family in Fort Worth, the city of Arlington, and recently even the City of Fort Worth has contemplated or actually also filed a lawsuit.

• ▶ Reply

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