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Federal Court Grants Class Certification for Landowners in Northeast Pennsylvania Natural Gas Royalties Lawsuit

DATE: May 19, 2020
PRACTICE AREAS: Consumer Protection

PHILADELPHIA, May 19, 2020 – The United States District Court for the Middle District of Pennsylvania has granted class certification in a federal lawsuit being litigated on behalf of a class of landowners in Northeast Pennsylvania, captioned Slamon, et al. v Carrizo (Marcellus) LLC, et al., No. 3:16-cv-2187 (M.D. Pa.). The plaintiffs in this class action lawsuit against defendants Carrizo (Marcellus) LLC; Reliance Marcellus II, LLC; Reliance Holdings USA, Inc.; BKV Operating LLC; and BKV Chelsea LLC allege claims individually and on behalf of similarly situated landowners who entered into leases authorizing these companies to produce and sell natural gas from their properties in exchange for royalty payments from the gas sales. A copy of the opinion is available here.

In the Court’s opinion, the presiding judge, The Honorable Robert D. Mariani, certified two separate classes. Specifically, the lawsuit alleges that the defendants injured members of the “No Deductions Class” by improperly deducting post-production marketing expenses before calculating royalty payments to the landowners. In addition, for the “Highest Price Class,” the defendants allegedly failed to value the natural gas in accordance with the term of the leases requiring that royalties be paid on the highest available price, whether that be the NYMEX spot price, prevailing local market price, or actual sale price. As Judge Mariani noted in certifying the two classes, the defendants admitted that they used the same methodology for calculating royalties for all landowners, regardless of their lease provisions.

“We are very pleased with the Court’s opinion and believe that Judge Mariani carefully analyzed each of the issues,” said Berger Montague Shareholder Glen L. Abramson. “We look forwarding to continuing to represent the interests of these two classes of Northeast Pennsylvania landowners who were not paid the royalties to which they were entitled by the defendants in the case.”

This case is being prosecuted by Shanon J. Carson and Glen L. Abramson of Berger Montague and Peter “Tad” H. LeVan, Jr. of LeVan Muhic Stapleton. “There has been a great deal of litigation across the United States on behalf of landowners who have not received all they are entitled to from their oil and gas lease agreements,” said Tad LeVan. “We will do everything in our power here to make sure the interests of our landowner clients and class members are protected and will now resume discovery and prepare for trial.”

Berger Montague is a national plaintiffs’ class action and complex litigation law firm headquartered in Philadelphia with offices in Minneapolis, San Diego, and Washington, D.C. Berger Montague litigates complex civil cases in federal and state courts throughout the United States. In its 50 years of operation, the Firm has pioneered the use of class actions in America and recovered well over $36 billion for its clients and the class members it has represented.

LeVan Muhic Stapleton’s subject matter experience is deep and diverse, from complex commercial litigations to class actions, from ERISA to RICO, from shareholder disputes to construction disputes, from intricate tax litigations to the constitutionality of governmental actions.

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