Saturday, June 19, 2010

Ohio Court Upholds Limitation on Tawney Action

In early 2009 a jury in Roane County awarded huge damages to oil and gas royalty owners who had allegedly been underpaid as a result of gas companies deducting certain expenses from the royalties they paid. The WV Supreme Court of Appeals refused to hear the appeal, and it ended up causing Chesapeake Energy to cancel its plans for a new headquarters building in Charleston.

The Ohio legislature changed the statute of limitation to foreclose such huge awards, and it was upheld by a US District Court. The Vorys law firm in Ohio reports on that decision, and I've included the first paragraph as an enticement to follow the link to their blog entry on the case.

Building on the royalty-interest owners' success in Estate of Garrison G. Tawney v. Columbia Natural Resources, LLC (West Virginia), plaintiffs filed a nearly-identical suit in Ohio asserting class-action claims for the deliberate and fraudulent underpayment of natural gas royalties by CNR and its successors. See Lutz v. Chesapeake Appalachia, LLC, Case No. 4:09CV2256 (United States District Court, Northern District of Ohio). Today, the District Court issued its decision dismissing those claims - based largely on Ohio's new 4-year statute of limitations.

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