$405 Million Jury Verdict

Mike Simon

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A Roane County, West Virginia jury has awarded an 8,000-member class of owners of natural gas rights a jury verdict of nearly $405 million. The class action lawsuit was filed on behalf of all West Virginia gas-royalty owners who leased land to Columbia Natural Resources, LLC.

The company had lease agreements with the plaintiffs allowing it to drill for gas on land they owned, but according to the lawsuit, the defendants failed to pay the owners market rates for the gas, as their contracts required. The plaintiffs also alleged that the defendants improperly deducted post-production and processing costs, made volume deductions, and failed to pay for gas that its lines lost.

The jury found that Columbia Natural Resources LLC and two other associated gas companies failed to pay royalties to the plaintiffs totaling $134.3 million, and that they deserved to pay a punitive award of $271 million more.

Post-trial motions are still pending before Roane County Circuit Court Judge Tom Evans who could set it aside or change the award amount. The defendants have indicated that they will appeal any adverse judgment.