Chesapeake Royalty Case Gains Support from Landowner Groups

by Elizabeth Alford on November 12, 2015

Groups band together to ask the Supreme Court of Texas to deny Chesapeake’s request to rehear a highly publicized royalties case.

Related: Chesapeake Before Texas Supreme Court

In 2010, property owners (Hyders) sued Chesapeake for improperly subtracting postproduction costs from their royalty checks for gas taken from their own property. In 2012, state District Judge Melody Wilkinson awarded the family nearly $1 million and the decision was upheld last year by the 4th Court of Appeals in San Antonio. Chesapeake continued to fight the decision and in June, the Texas Supreme Court sided with the Hyders. Chesapeake immediately appealed.

This week, Texas Land and Mineral Owners Association, the National Association of Royalty Owners-Texas Inc. and the Chesapeake Barnett Shale Royalty Owners came out against the court rehearing the case by filing “amicus curiae”  briefs.

“The majority opinion merely reinforces the longstanding tenet of Texas law requiring that a lease be interpreted so as to give meaning and effect to all lease language. Rehearing should be denied, but if rehearing is granted, this Court should reinforce the basic principle of Texas contract law requiring all contractual provisions be given effect, and still interpret the lease language here as plainly written to properly honor the parties’ intent.”

More than a dozen oil companies and pro-industry organizations who have already filed briefs in favor of rehearing the case. Pro-industry leaders are concerned that the decision in the Hyder case could create chaos in the courts for other royalties cases across the Lone Star State.

Read full brief here 



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