Source: The Times-Tribune (Scranton, PA), September 13, 2013
Posted on: http://envfpn.advisen.com
A federal judge on Thursday granted preliminary approval to a $7.5 million settlement of a class-action lawsuit filed against natural gas producer Chesapeake Appalachia by several thousand Pennsylvania leaseholders.
U.S. District Judge Malachy Mannion said he reviewed the terms of the proposed settlement and agrees it adequately represents the interests of potential claimants.
Attorneys for the leaseholders and Chesapeake agreed on Aug. 30 to settle a lawsuit that alleged the company, the second largest natural gas producer in the nation, wrongly charged them post-production fees related to the refinement and transportation of gas extracted from Marcellus Shale wells drilled on their properties.
According to the suit, Chesapeake deducted post-production fees from royalties paid the leaseholders, despite terms in the leases that preclude them from doing so. The suit further alleged the fees charged were in excess of the actual and reasonable costs the company incurred.
In his ruling, Judge Mannion said the agreement adequately compensates leaseholders, providing a payment of 55 percent of all post-production cost deductions made before Sept. 1 and a 27.5 percent payment of deductions made after that date. The settlement also negates the need for leaseholders to file individual lawsuits, which will save both sides a potentially protracted and expensive legal battle, the judge said.
The order clears the way for attorneys to move forward with implementing the settlement.
The judge directed the settlement administrator, Total Class Solutions, to mail notice of the proposed settlement to all potential class members by Oct. 10. A hearing regarding final approval of the settlement is set for Dec. 10.