An oil and gas company is appealing a judge's ruling that a Paonia man didn't libel the company because a comment he made was substantially true.

SG Interests has filed a notice of appeal with the Colorado Court of Appeals in its case against Pete Kolbenschlag. It continues to argue that Kolbenschlag libeled the company based on how Kolbenschlag characterized a payment it agreed to pay to settle an alleged collusion case.

"It's disappointing but I don't suppose it's surprising," Kolbenschlag said of the company's decision to further pursue the matter in court.

The suit arose over comments he posted on the Glenwood Springs Post Independent newspaper website about an article on SG's plans to sue the federal government over cancellation of its leases in the Thompson Divide area. (SG subsequently did sue, and recently reached a settlement with the Bureau of Land Management under which the BLM agreed to pay it $1.5 million for canceling leases covering some 21,000 acres, but the cancellations remained in place.)

In talking about its plans to sue, the company said collusion between the Obama administration and environmentalists led to the cancellation of the leases. Kolbenschlag wrote in his comments that it was SG Interests that was "actually fined for colluding … to rig bid prices and rip off American taxpayers."

That was a reference to a 2013 settlement under which SG and Gunnison Energy agreed to pay more than $1 million in total after the Justice Department said they colluded in illegal bidding for federal oil and gas leases.

SG contends it made what was simply a prudent business decision to settle for substantially less than it would have had to spend at trial.

It says in its notice of appeal that it already had spent more than $1.75 million responding to the Justice Department investigation, and it admitted no wrongdoing in the settlement.

It also says the Justice Department acknowledged in the settlement that it hadn't proven its allegation, that SG had defenses to it and that the settlement payment didn't constitute a fine.

Seventh Judicial District Court Judge Steven Schultz said in a written ruling that he didn't think that whether the payments are called fines, penalties, settlement payments or damages "makes any real difference."

He pointed to numerous media articles, industry newsletters and legal commentaries at the time that called SG and Gunnison Energy's payments fines. He wrote that holding Koblenschlag's comments to the exacting standards SG Interests was demanding "would be chilling to protected speech."

Schultz also held that the facts the Justice Department established in the case are more damaging to SG's reputation than Kolbenschlag's comments.

The notice of appeal says SG also plans to contest Schultz's ruling denying SG Interests' request to be able to conduct a discovery process to seek evidence from Kolbenschlag as part of the case.

Recommended for you