Settlement possible soon in suit over gas royalties

More than 1,000 royalty owners in Garfield County could benefit from a proposed partial settlement of a class action lawsuit against Williams Production RMT, the attorney who brought the suit says.

Plaintiffs Ivo, Sidney and Ruth Lindauer, all of Parachute, have agreed along with Williams to the settlement of the suit, which accuses the company of underpaying royalty owners. Ninth Judicial District Court Judge Denise Lynch has given the settlement preliminary approval.

She is scheduled to consider final approval and other aspects of the case in March.

“We feel it’s a really fair settlement for everybody and gets people what they’re entitled to,” said the Lindauers’ attorney, Nathan Keever of Grand Junction.

Keever previously represented plaintiffs in two other Garfield County cases successfully challenging how Williams calculates royalty payments to mineral owners from whom it leases the right to develop oil and gas. Joan Savage won more than $500,000 in her claim, originally brought against Barrett Resources, which Williams later purchased. A suit brought by William Clough, who since has died, resulted in a jury award of about $4 million.

Both of those judgments were upheld in appeals court, and the Colorado Supreme Court turned down petitions by Williams to consider the cases, Keever said.

Keever said similar issues are being raised in the Lindauer case, and the idea of the class action is to avoid the need for others to sue Williams individually.

In a legal notice being published in local newspapers, Williams said it is not admitting liability or the legitimacy of the Lindauers’ claims.

Instead, “Williams is settling the case for the purpose of resolving a dispute with its royalty owners in a manner that will enable it to avoid further expense and resolve the controversy,” the notice states.

The lawsuit accuses Williams of underpaying royalties through means such as excluding volumes of gas and other produced hydrocarbons from its calculations, improperly deducting costs to make gas marketable and deliver it to consumers, and charging costs in excess of actual expenses.

Williams has agreed to a number of reimbursements covering various circumstances.

Keever said Williams won’t have calculated how much it will refund individual royalty owners until early next year.

Two significant lawsuit claims have not been settled and apparently will have to be resolved in court, Keever said. One involves a question of whether Williams is entitled to take any deductions in the cases of leases with specific language, and another addresses leases that are silent on deductions.

Royalty owners have the right to opt out of class action status or challenge the proposed settlement. More information on the case may be found at the Web site of one of the participating law firms, at http://www.fleeson.com.


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