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Judge certifies class actions in gas royalty cases

Jones_JamesP0308Abingdon U.S. District Judge James P. Jones has agreed to allow five lawsuits over coal mine gas royalty payments to proceed as class actions.

The decision breathes new life into the suits, which challenge the ways energy companies pay royalties to Southwest Virginia landowners for the use of natural gas removed from underground coal mines.

The cases have produced frustration from Jones about the absence of a legal mechanism for paying out gas royalties placed in an escrow account.

The cases also have produced political controversy. Democratic gubernatorial candidate Terry McAuliffe has tried to paint Republican opponent Ken Cuccinelli as beholden to energy companies that made campaign contributions to Cuccinelli.

In the lawsuits, some landowners claim they were underpaid because of improper deductions in their gas lease payments.

Other landowners are trying to get their hands on gas royalties paid into an escrow account under a state law allowing extraction of gas without owners’ permission. The energy company lawyers contend the law fails to provide a practical means of determining how much each landowner gets.

According to published accounts, the law fails to address whether the natural gas belongs to the person holding the deed to the coal or the owner of the gas estate.

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