(11/29/2018)
WV ROYALTY OWNERS TAKING A BEATING

By Ken Ward Jr. and Kate Mishkin Staff Writers CHARLESTON GAZETTE

The trial of a major lawsuit alleging that energy giant EQT Corp. has been shortchanging thousands of West Virginians on their royalty payments won’t start Tuesday as planned, following the tentative settlement of the case late last week.

Details of the deal have not yet been made public.

Marvin Masters, lead lawyer for the plaintiffs, said “the parties have tentatively resolved the case,” pending settlement details being worked out.

A spokeswoman for the court confirmed the settlement, and said the trial was canceled.

Linda Robertson, spokeswoman for EQT, declined to comment on the settlement, citing “pending litigation.”

More than 10,000 individuals and businesses in West Virginia are estimated to be members of the class of plaintiffs. They allege that EQT, the state’s second-largest gas producer, was illegally deducting various costs — such as for transporting and processing gas — from their royalty payments.

Under federal court rules, details of class-action settlements are subject to review by members of the plaintiff class. Such settlements must also be reviewed by U.S. District Judge John Preston Bailey and determined to be “fair, reasonable and adequate.”

The lawsuit against EQT was among the royalty cases highlighted earlier this month in a joint examination by the Charleston Gazette-Mail and ProPublica of the ways West Virginia natural gas producers whittle away at royalties promised to thousands of state residents and businesses.

Companies have both deducted various costs from royalty payments, despite lease language that doesn’t allow them to do so, and formed shell companies that buy the gas at reduced rates, lowering percentage-based royalties.

These practices have gone on for decades, despite efforts by state lawmakers and courts to ensure that residents get their fair share.

Several lawsuits in the mid-2000s led to a series of settlements and a $400 million jury verdict in 2007. Those earlier settlements included a roughly $30 million deal by Equitable, as EQT was then known, with about 10,000 class members who had leases with the company.

EQT and other gas companies and industry trade groups maintain that they’ve done nothing wrong, and that royalty payments are fair and based on lease language or state law.

Still, in September, Pittsburgh-based EQT lost a case filed by a Ritchie County couple who alleged the company was wrongly deducting gas transportation costs and taxes from their royalties. A federal jury and judge in Clarksburg ordered EQT to pay Arnold and Mary Richards $235,000 that had been deducted from their royalties since November 2016.


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