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Natural gas developers defeat landowners' lawsuit over royalty payments
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Natural gas developers defeat landowners' lawsuit over royalty payments
Sep 3, 2024 8:09 PM

Sept 3 (Reuters) - Anadarko and other natural gas

exploration and production companies have defeated a federal

lawsuit in Pennsylvania accusing them of underpaying royalties

to property owners holding interests to thousands of acres of

leased land.

U.S. District Judge Karoline Mehalchick in Scranton ruled on

Friday that the plaintiffs had no standing to pursue claims

under federal antitrust law, and also that they had not shown

the companies agreed to form an enterprise to defraud them.

The landowners include dozens of individuals and family

member trusts with land above the natural gas-rich underground

Marcellus Shale in Pennsylvania. The plaintiffs lease their land

to gas explorers and producers.

The lawsuit, filed in 2015, claimed the defendants carved up

geographic markets among themselves to minimize competition for

gas mineral rights, operating rights and gathering services,

which include pipes that transport raw natural gas from a well

to a processing plant.

The plaintiffs said the gas companies imposed "unreasonable

and artificially inflated gas gathering and transportation

fees," which reduced royalty payments.

Mehalchick dismissed antitrust and other claims, including

alleged violations of federal racketeering law. She gave the

plaintiffs 28 days to file any amended lawsuit.

The plaintiffs' lawyers and attorneys for Anadarko and other

defendants, including Williams Partners, formerly known as

Access Midstream Partners, did not immediately respond to

requests for comment.

Houston-based Occidental Petroleum ( OXY ), which acquired Anadarko

in 2019 for $38 billion, did not immediately respond to a

request for comment. Occidental was not a defendant after it was

dropped from the lawsuit last year.

The defendants had all denied any wrongdoing.

The plaintiffs said they hold royalty interests in natural

gas produced from more than 12,000 acres of land.

Anadarko in April told the court that the landowners had

attempted "to turn a basic contract dispute over royalty

payments into an antitrust scheme." Anadarko said the plaintiffs

had failed to show how "unrelated, legitimate business

agreements" amounted to an antitrust violation.

Mehalchick said the plaintiffs' lawsuit "does not support

that each defendant was even aware of each other's conduct,

never mind had a unity purpose."

The case is A&B Campbell Family LLC et al v. Chesapeake

Energy ( CHK ) et al, U.S. District Court, Middle District of

Pennsylvania, No. 3:15-cv-00340-KM.

For plaintiffs: Thomas McNamara of Indik & McNamara; Taunya

Knolles Rosenbloom of Law Offices of Taunya M. Knolles

Rosenbloom; and Christopher Jones of Griffin, Dawsey, DePaola &

Jones

For Anadarko: Steven Bizar, Michael Doluisio and Elisa

Beneze of Dechert

For Access Midstream: Kayci Hughes of Crowe & Dunlevy, and

John Summers

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