| Chesapeake files appeal
By David Hedges, Publisher
www.thetimesrecord.net
Everyone knew it was coming. They just didn't know it would be so big when it got here.
In January, after a Roane County awarded a verdict of $404 million in a class-action lawsuit against Chesapeake Energy and NiSource, company officials said they planned to appeal.
That appeal was filed last week and was 290 pages long. Judge Tom Evans III said he would not consider the appeal until an index was filed to go along with the document, and another 138 pages were added, including a table of contents and supplements, for a total of 428 pages.
The appeal was prepared by former state Supreme Court clerk Ancil Ramey and other attorneys with the firm of Steptoe & Johnson.
The appeal asks that the judgment be set aside or, in the alternative, that a new trial be granted.
Evans has already upheld an appeal on the amount of punitive damages, which added $270 million to the $134 million in actual damages the jury found.
The appeal cites nine reasons for setting aside the decision, with several arguments detailed in each area.
The appeal said the court erred in allowing the case to be a class action. More than 10,000 royalty owners joined the suit that alleges royalty owners were intentionally underpaid and deceived.
In the appeal, the defendants allege there was no evidence of any fraud, which allowed the jury to award punitive damages.
The case was nothing more than a contract dispute, the appeal said.
The appeal calls the fraud allegations a "difficult-to-understand moving target.
"Even the plaintiffs had difficulty articulating any conduct by defendants that they could point to as 'fraudulent'," according to the appeal. The document cites phrases used by plaintiffs' lawyers who accused gas company officials of enriching themselves through the advance sale of gas to an offshore company and using accounting tricks to keep royalty owners in the dark.
"Evidence of "golden parachutes," "French islands," and "Enron" had no relevance to whether the plaintiffs were somehow 'deceived'," the appeal says.
Some of the complaints were like those that might be raised by shareholders in a company instead of royalty owners, the defense argued in the lengthy document.
Evans has not indicated when he might rule on the appeal.
If Evans does not set aside the verdict or grant a new trial, which appears unlikely in view of the strong language he used in upholding the record-setting punitive damage award, the defense could appeal his decision to the state Supreme Court.
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