| Judge refuses to add attorney fees to royalty verdict
By David Hedges, Publisher
www.thetimesrecord.net
A record-setting judgment in a class-action lawsuit involving natural gas royalty owners' rights won't be getting any larger as the result of a ruling last week.
Attorneys who filed the suit had hoped to add their fees on top of the $404 million judgment returned by a Roane County jury in January.
Attorney fees and expenses could have added as much as $100 million or more to the verdict, potentially pushing the total to over half a billion dollars, according to some familiar with the case.
But that increase would have required the approval of the judge who presided over the trial, and Judge Tom Evans III would not go along. He denied the request in a hearing Thursday morning.
"I can't ignore the size of the verdict," Evans said during a hearing in Roane Circuit Court.
Since the jury found the companies committed fraud, the door was opened to the possibility of shifting the burden of attorney fees and expenses to the defense.
Had Evans ruled in favor of the lawyers who brought the suit, the next step would have been to determine the amount to be added on top of the verdict.
Retired judge George Scott, one of the attorneys who filed the suit, said there was no specific amount requested for attorney fees.
Had the motion been approved, he said the amount set by the court would have been based on criteria that would include the amount of time attorneys spent on the case and their expenses. He said the figure would not have been based on a percentage of the verdict.
"It's for the same purpose as punitive damages: to punish a defendant so that similar actions don't take place in the future," Scott said. "But he (Evans) ruled that the punitive damages were sufficient."
Scott said no decision had been made as to whether the ruling would be appealed.
With the ruling, the attorney costs will come from the verdict in favor of more than 10,000 royalty owners. The verdict includes some $134.3 million in compensatory damages and $270 million in punitive damages.
In late June, Evans issued a 101-page opinion upholding the verdict that came after a trial that lasted three weeks.
In the ruling, Evans said Columbia Natural Resources (now owned by Chesapeake Energy) and NiSource committed fraud against the royalty owners following a decision in 1993 to begin deducting expenses from royalty payments. Evans said the defendants also underreported the value of gas and took steps to conceal their actions from the royalty owners.
Spokesman for both companies have denied any wrongdoing and said they plan to appeal the verdict.
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