HARRISBURG, Pa. (Legal Newsline) – Pennsylvania citizens are suing an energy company and its subsidiaries over claims they exploited Pennsylvania landowners.
Timothy Tyler, Terri Tyler, Tim & Terri Family LP, Tyler 5 Family LP, Rodney Mowry and and Dianna Mowry, individually and for all others similarly situated, filed a class-action lawsuit March 15 in U.S. District Court for the Middle District of Pennsylvania against Chesapeake Appalachia, Chesapeake Energy Corp. and Chesapeake Energy Marketing, alleging breach of contract, breach of good faith and fair dealing, breach of the Pennsylvania Oil and Gas Lease Act, tortious interference with existing contract and unjust enrichment.
The plaintiffs allegedly hold interests in standard form oil and gas leases, with the expectation that the lessee's production of their gas would generate royalty payments, so that the plaintiffs would share in revenues that energy companies generated from the sale of the plaintiffs' natural gas.
The leases allegedly contain language prohibiting the lessee from taking deductions for post-production costs.
However, the Chesapeake defendants allegedly generated a scheme whereby Chesapeake Appalachia transfers gas titles to an affiliated company, Chesapeake Energy Marketing, which then markets and sells the gas to third parties in the interstate pipeline system.
Chesapeake Appalachia allegedly takes deductions against the royalties payable to the plaintiffs and other class members, charging for post-production services as though its transfer to its sister company, both of which are owned by Chesapeake Energy Corp., as a "sale" for purposes of calculating royalties.
The plaintiffs and others in the class seek to declaratory relief, actual and punitive damages, statutory or other interest, attorney fees and costs of the suit.
They are represented by attorneys Ira Neil Richards, Kenneth I. Trujillo, and Arleigh P. Helfer, III of Schnader Harrison Segal & Lewis in Philadelphia; attorney Aaron D. Hovan in Tunkhannock, Pennsylvania; attorney Richard L. Huffsmith in Tunkhannock, Pennsylvania; and attorney Richard D. Greenfield of Greenfield and Goodman in New York.
U.S. District Court for the Middle District of Pennsylvania Case number 3:16-cv-00456-MEM