How Does the Proposed Class Settlement in The Demchak Partners CLASS ACTION Affect Me?
You may have heard or receive notice in the mail about a proposed Class Settlement in a class action case called Demchak Partners Limited Partnership v. Chesapeake Appalachia, L.L.C. What is the proposed Class Settlement about? Are you a member of the Settlement Class? Is it a good deal? How does it affect your right to pursue any claims you may have against Chesapeake? Against other gas companies? Against Access Midstream and other midstream gathering companies? Should you remain in the Settlement Class or opt-out? If you want to opt-out, what do you need to do, and what is the deadline to act?
We do not represent any of the named parties in the Demchak Partners case. The following information is based on documents which have been filed of public record in the Demchak Partners case, and on the Court approved form of Notice that was (or should have been) mailed to all members of the Settlement Class. We have made copies of all of the settlement documents available on this website. You can also obtain copies directly from the Clerk of the U.S. District Court for the Middle District of Pennsylvania. We encourage you to consult with an attorney (whether one of the attorneys on our team or another qualified attorney) to assist you in understanding and evaluating the proposed Class Settlement, including whether you are part of the Settlement Class and, if so, whether it is in your best interests to remain part of the settlement or to opt-out.
The first thing you need to know is that the proposed Class Settlement does not apply to everyone who receives royalties from Chesapeake. It applies to you only if the oil and gas lease under which you receive your royalties contains what is referred to as a “Market Enhancement Clause,” which is a clause or provision that precludes the gas company/lessee from deducting post-production costs incurred to transform leasehold gas into marketable form, or (for purposes of the settlement) to make such gas ready for sale or use, but permits the gas company/lessee to deduct a pro rata share of post-production costs incurred after the gas is marketable or ready for sale or use if the costs enhance the value of the gas. Many Pennsylvania oil and gas leases with Chesapeake, or in which Chesapeake has an interest, do not contain a Market Enhancement Clause. If your oil and gas lease does not contain a Market Enhancement Clause, then you are not a member of the Settlement Class and not a part of the proposed Class Settlement. This means that you will have to look at other alternatives means to protect and enforce your rights and interests. We believe that our litigation approach represents a sound alternative approach for royalty owners whose leases do not contain a Market Enhancement Clause, and invite you to consider retaining us to represent you. See Our Approach, How Do I Sign Up? and Documents Needed to File.
If you receive royalties under a Pennsylvania oil and gas lease that is or has been owned, in whole or in part, by Chesapeake, as a lessee, and the lease contains Market Enhancement Clause, then you fall within the definition of the Settlement Class, and need to understand the terms, conditions and effects of the proposed Class Settlement, as well as the alternatives and options available to you, so that you can make an informed decision as to whether it is in your best interests to remain part of the proposed Class Settlement or to opt-out of the Class Settlement and pursue your own claims and rights separately and, if you decide not to opt-out, whether you want to submit any comments or objections concerning the Proposed Settlement to the Court.
By way of background, on August 30, 2013, Demchak Partners Limited Partnership and other named plaintiffs filed a Class Action Complaint on behalf of themselves and all others similarly situated against Chesapeake Appalachia, L.L.C., seeking to obtain monetary damages and declaratory and injunctive relief based on allegations that Chesapeake underpaid royalties relating to gas produced from wells located in Pennsylvania by inappropriately deducting post-production costs which it is not entitled to deduct pursuant to Market Enhancement Clauses.
The Demchak Partners class action was filed on behalf of all lessor parties (and their predecessors and successors-in-interest) to any oil and gas lease that (a) covers a leasehold located in Pennsylvania, (b) contains a Market Enhancement Clause, and (c) is or has been owned, in whole or in part, by Chesapeake as a lessee, according to the business records maintained by Chesapeake.
Counsel for the plaintiffs in Demchak Partners represent that, before filing the complaint, they conducted an investigation into Chesapeake’s royalty payment practices, obtained certain data and information from Chesapeake, engaged in negotiations and a mediation with Chesapeake, and entered into a Class Action Settlement Agreement, dated as of August 29, 2013, which was filed with the Court on August 30, 2013 along with the Class Action Complaint, and a motion seeking preliminary approval of the proposed settlement.
On December 18, 2014, the parties in the Demchak Partners case filed an Amended Class Action Settlement Agreement (the “Amended Settlement Agreement”), dated as of December 18, 2014, along with a motion for preliminary approval of the Amended Settlement Agreement. A copy of Exhibit 1 to the motion, including the full Amended Settlement Agreement and the exhibits to the agreement, is available here. A summary of the provisions of the proposed Settlement prepared by counsel in Demchak Partners is set forth at page 5 of the proposed form of Settlement Notice attached as Exhibit A to the Amended Settlement Agreement.
CAUTION: Although every member of the Settlement Class should have received a copy of the Notice in the mail we have heard from royalty owners whose leases appear to make them members of the Settlement Class but who did NOT receive any Notice. This could happen for any number of reasons, including, but not limited to, Notices being sent to former owners of leasehold properties which were recently sold or transferred or Notices simply being lost in the mail. You may be a member of the Settlement Class even if you did not receive a Notice.
The proposed Settlement provides certain monetary relief to members of the Settlement Class (net of attorneys’ fees), permits Chesapeake to continue to deduct Post-Production Costs (subject to specified limits) into the future, and also provides for the release of specified Settled Claims, which includes any and all claims and causes of action against Chesapeake, its affiliates and assigns, related to the calculation, amount, payment and/or reporting of royalty payments made by Chesapeake and/or its Affiliates (as defined), either on its own working interest share or on behalf of other working interests.
On Friday, October 2, 2015, U.S. District Judge Malachy Mannion issued an Order Granting Certification of Settlement Class and Preliminarily Approving Class Settlement in the Demchak Partners Case. A copy of the Order is available here. In the October 2, 2015 Order, the Court “preliminarily approved” the Amended Settlement Agreement as fair, reasonable and adequate, subject to final approval after the Court considers any comments or objections submitted by members of the Settlement Class by the December 17, 2015 deadline set by the Court, and after the Court conducts a fairness hearing, which the Court scheduled for February 2, 2016. The Order also sets December 17, 2015 as the deadline by which any member of the Class who wishes to exclude himself or herself from the Class Settlement must submit an exclusion request.
The Order states that "Any member of the Class who wishes to exclude himself or herself from the Class Settlement must postmark and mail the exclusion request to Lead Class Counsel and Defendant’s counsel at the addresses provided above [in the Order] no later than Thursday, December 17, 2015." The requirements for preparation of a Request for Exclusion are set forth in Section 1.36 of the Amended Settlement Agreement, in paragraph (10) of the Order, and in the instructions contained in the Settlement Notice. We have posted a copy of the Court approved Settlement Notice that was mailed out following the entry of the Order here.
If you are a member of the Settlement Class and do not exclude yourself from the Class Settlement, then if the Court grants final approval to the proposed Class Settlement, you automatically will be bound by the terms of the proposed Class Settlement -- including the release of the claims and causes of action specified in the Amended Settlement Agreement. This means that, if you do nothing, and the Class Settlement is approved, you will lose the right to assert individually any of the specified Settled Claims that you otherwise had against Chesapeake, its affiliates and assigns.
As a result, if you are a member of the Settlement Class, the clock is now ticking; you have only until December 17 to review and evaluate the proposed Settlement, your potential alternatives and options, and to decide whether it is in your best interests to participate in, and be bound by the terms of, the proposed Settlement, to submit any comments or objections, or to opt-out of the proposed Settlement Class and separately pursue any claims and rights you may have.
YOU HAVE ALTERNATIVES. Please feel free to contact us, or your own attorney, for assistance in evaluating the proposed Class Settlement, its impact on any claims and causes of action that you may have against Chesapeake, other gas companies, and Access Midstream, and the potential alternatives available to you to enforce your rights. We encourage you to carefully reviewe the terms of the proposed Class Settlement and the various alternatives available, and to make an informed decision as to what is in your own best interests. We welcome the opportunity to represent any member of the Settlement Class who decide that the proposed Class Settlement is not in his, her or its best interests.
If you are a member of the Settlement Class and decide that the proposed Class Settlement is not in your best interests, see How Do I Opt Out of the Demchak Partners Settlement? for a summary of the instructions contained in the court documents and Notice regarding what you need to do to opt-out, and a sample form of opt-out letter based on those instructions. If you are not sure whether you are a member of the Settlement Class, but have decided that the proposed Class Settlement is not in your best interests, and want to ensure that you are not part of the Settlement Class or bound by the proposed settlement, you also can submit a protective opt-out request as a precaution, to make sure you do not unintentionally become bound by the proposed Class Settlement.
We do not represent any of the named parties in the Demchak Partners case. The following information is based on documents which have been filed of public record in the Demchak Partners case, and on the Court approved form of Notice that was (or should have been) mailed to all members of the Settlement Class. We have made copies of all of the settlement documents available on this website. You can also obtain copies directly from the Clerk of the U.S. District Court for the Middle District of Pennsylvania. We encourage you to consult with an attorney (whether one of the attorneys on our team or another qualified attorney) to assist you in understanding and evaluating the proposed Class Settlement, including whether you are part of the Settlement Class and, if so, whether it is in your best interests to remain part of the settlement or to opt-out.
The first thing you need to know is that the proposed Class Settlement does not apply to everyone who receives royalties from Chesapeake. It applies to you only if the oil and gas lease under which you receive your royalties contains what is referred to as a “Market Enhancement Clause,” which is a clause or provision that precludes the gas company/lessee from deducting post-production costs incurred to transform leasehold gas into marketable form, or (for purposes of the settlement) to make such gas ready for sale or use, but permits the gas company/lessee to deduct a pro rata share of post-production costs incurred after the gas is marketable or ready for sale or use if the costs enhance the value of the gas. Many Pennsylvania oil and gas leases with Chesapeake, or in which Chesapeake has an interest, do not contain a Market Enhancement Clause. If your oil and gas lease does not contain a Market Enhancement Clause, then you are not a member of the Settlement Class and not a part of the proposed Class Settlement. This means that you will have to look at other alternatives means to protect and enforce your rights and interests. We believe that our litigation approach represents a sound alternative approach for royalty owners whose leases do not contain a Market Enhancement Clause, and invite you to consider retaining us to represent you. See Our Approach, How Do I Sign Up? and Documents Needed to File.
If you receive royalties under a Pennsylvania oil and gas lease that is or has been owned, in whole or in part, by Chesapeake, as a lessee, and the lease contains Market Enhancement Clause, then you fall within the definition of the Settlement Class, and need to understand the terms, conditions and effects of the proposed Class Settlement, as well as the alternatives and options available to you, so that you can make an informed decision as to whether it is in your best interests to remain part of the proposed Class Settlement or to opt-out of the Class Settlement and pursue your own claims and rights separately and, if you decide not to opt-out, whether you want to submit any comments or objections concerning the Proposed Settlement to the Court.
By way of background, on August 30, 2013, Demchak Partners Limited Partnership and other named plaintiffs filed a Class Action Complaint on behalf of themselves and all others similarly situated against Chesapeake Appalachia, L.L.C., seeking to obtain monetary damages and declaratory and injunctive relief based on allegations that Chesapeake underpaid royalties relating to gas produced from wells located in Pennsylvania by inappropriately deducting post-production costs which it is not entitled to deduct pursuant to Market Enhancement Clauses.
The Demchak Partners class action was filed on behalf of all lessor parties (and their predecessors and successors-in-interest) to any oil and gas lease that (a) covers a leasehold located in Pennsylvania, (b) contains a Market Enhancement Clause, and (c) is or has been owned, in whole or in part, by Chesapeake as a lessee, according to the business records maintained by Chesapeake.
Counsel for the plaintiffs in Demchak Partners represent that, before filing the complaint, they conducted an investigation into Chesapeake’s royalty payment practices, obtained certain data and information from Chesapeake, engaged in negotiations and a mediation with Chesapeake, and entered into a Class Action Settlement Agreement, dated as of August 29, 2013, which was filed with the Court on August 30, 2013 along with the Class Action Complaint, and a motion seeking preliminary approval of the proposed settlement.
On December 18, 2014, the parties in the Demchak Partners case filed an Amended Class Action Settlement Agreement (the “Amended Settlement Agreement”), dated as of December 18, 2014, along with a motion for preliminary approval of the Amended Settlement Agreement. A copy of Exhibit 1 to the motion, including the full Amended Settlement Agreement and the exhibits to the agreement, is available here. A summary of the provisions of the proposed Settlement prepared by counsel in Demchak Partners is set forth at page 5 of the proposed form of Settlement Notice attached as Exhibit A to the Amended Settlement Agreement.
CAUTION: Although every member of the Settlement Class should have received a copy of the Notice in the mail we have heard from royalty owners whose leases appear to make them members of the Settlement Class but who did NOT receive any Notice. This could happen for any number of reasons, including, but not limited to, Notices being sent to former owners of leasehold properties which were recently sold or transferred or Notices simply being lost in the mail. You may be a member of the Settlement Class even if you did not receive a Notice.
The proposed Settlement provides certain monetary relief to members of the Settlement Class (net of attorneys’ fees), permits Chesapeake to continue to deduct Post-Production Costs (subject to specified limits) into the future, and also provides for the release of specified Settled Claims, which includes any and all claims and causes of action against Chesapeake, its affiliates and assigns, related to the calculation, amount, payment and/or reporting of royalty payments made by Chesapeake and/or its Affiliates (as defined), either on its own working interest share or on behalf of other working interests.
On Friday, October 2, 2015, U.S. District Judge Malachy Mannion issued an Order Granting Certification of Settlement Class and Preliminarily Approving Class Settlement in the Demchak Partners Case. A copy of the Order is available here. In the October 2, 2015 Order, the Court “preliminarily approved” the Amended Settlement Agreement as fair, reasonable and adequate, subject to final approval after the Court considers any comments or objections submitted by members of the Settlement Class by the December 17, 2015 deadline set by the Court, and after the Court conducts a fairness hearing, which the Court scheduled for February 2, 2016. The Order also sets December 17, 2015 as the deadline by which any member of the Class who wishes to exclude himself or herself from the Class Settlement must submit an exclusion request.
The Order states that "Any member of the Class who wishes to exclude himself or herself from the Class Settlement must postmark and mail the exclusion request to Lead Class Counsel and Defendant’s counsel at the addresses provided above [in the Order] no later than Thursday, December 17, 2015." The requirements for preparation of a Request for Exclusion are set forth in Section 1.36 of the Amended Settlement Agreement, in paragraph (10) of the Order, and in the instructions contained in the Settlement Notice. We have posted a copy of the Court approved Settlement Notice that was mailed out following the entry of the Order here.
If you are a member of the Settlement Class and do not exclude yourself from the Class Settlement, then if the Court grants final approval to the proposed Class Settlement, you automatically will be bound by the terms of the proposed Class Settlement -- including the release of the claims and causes of action specified in the Amended Settlement Agreement. This means that, if you do nothing, and the Class Settlement is approved, you will lose the right to assert individually any of the specified Settled Claims that you otherwise had against Chesapeake, its affiliates and assigns.
As a result, if you are a member of the Settlement Class, the clock is now ticking; you have only until December 17 to review and evaluate the proposed Settlement, your potential alternatives and options, and to decide whether it is in your best interests to participate in, and be bound by the terms of, the proposed Settlement, to submit any comments or objections, or to opt-out of the proposed Settlement Class and separately pursue any claims and rights you may have.
YOU HAVE ALTERNATIVES. Please feel free to contact us, or your own attorney, for assistance in evaluating the proposed Class Settlement, its impact on any claims and causes of action that you may have against Chesapeake, other gas companies, and Access Midstream, and the potential alternatives available to you to enforce your rights. We encourage you to carefully reviewe the terms of the proposed Class Settlement and the various alternatives available, and to make an informed decision as to what is in your own best interests. We welcome the opportunity to represent any member of the Settlement Class who decide that the proposed Class Settlement is not in his, her or its best interests.
If you are a member of the Settlement Class and decide that the proposed Class Settlement is not in your best interests, see How Do I Opt Out of the Demchak Partners Settlement? for a summary of the instructions contained in the court documents and Notice regarding what you need to do to opt-out, and a sample form of opt-out letter based on those instructions. If you are not sure whether you are a member of the Settlement Class, but have decided that the proposed Class Settlement is not in your best interests, and want to ensure that you are not part of the Settlement Class or bound by the proposed settlement, you also can submit a protective opt-out request as a precaution, to make sure you do not unintentionally become bound by the proposed Class Settlement.