Class Action Lawsuits
In recent days, a group of Ohio homeowners has filed what is being called a class action lawsuit against Chesapeake Energy for what they claim are thousands of dollars in unpaid royalties. The suit claims that Chesapeake Energy owes the Ohio homeowners $1.75 million for land and mineral rights on the northern shores of Lake Erie. The claim further claims that the company has not paid the royalties on time or in full as required by Ohio law. The Ohio homeowners say that they were never informed that they were entitled to royalties by an email from Chesapeake Energy or a letter from the company’s lawyers. At least one member of the homeowner’s board of directors has met with representatives from Chesapeake Energy to discuss their lawsuit and the company’s plans to resolve the claims.
The attorney representing the plaintiffs in the class action lawsuit against Chesapeake Energy, Ladmon & Peabody, LLC, is claiming negligence on the part of the company and says that the company’s plan to resolve the claims will not work.
The companies plan to defend against the lawsuit by pointing out that they signed a binding agreement with the Ohio attorney general. However, state law requires that a settlement deal in such cases be in writing and that any agreed terms are recorded. A recording could make it impossible for the company to settle its liability without going to court. The Ohio attorney general is expected to file a reply to Chesapeake Energy’s defense in the coming months. If no settlement is reached, the lawsuit could go forward and potentially lead to a trial.
The defense is also claiming that the plaintiffs’ class-action lawsuit against Chesapeake Energy is premature because the case was filed in October and that there are only three unresolved claims.
In reality, according to a recently published article, “Chesapeake Energy has already spent more than $1 million on lawyers since the suit was filed in October,” and that “at least one other major natural gas provider has sought to defend against the lawsuit, which is unusual.” The article goes on to say, “Other natural gas producers have said they would settle some of the claims if the case goes to court.” Further Reading, the article continues, “The claim against [Chesapeake Energy] revolves around how the gas company encouraged state officials to exempt itself from state laws requiring energy providers to deliver clean air and pollution controls.” The article continues, “The claim also claims that landowners were put at risk by allowing Chesapeake Energy to enter into a legally binding contract with the Ohio Department of Natural Resources that allegedly exempted the company from complying with the Clean Air Act.”
The class action lawsuit against Chesapeake Energy was filed in November of last year.
By that time, however, the lawsuits had been underway for more than a month. Although the claims in the complaint and the defenses on appeal are near identical, the nature of the class action lawsuit itself means that the nature of the legal system itself may well alter the nature of the resolution of the case. What is already apparent is that the vast majority of class action lawsuit plaintiffs are often unable to prevent the defendants from defending against their lawsuits.
It is this vulnerability to defend themselves that makes pursuing class action lawsuit against Chesapeake Energy so difficult.
Imagine the difficulty of convincing a group of asphalt shingles distributors to bring a class action lawsuit against a large asphalt manufacturer. The reason why class action lawsuits against businesses like Chesapeake Energy are so difficult to successful is because the defendant must aggressively defend itself and almost always lose. The reason for this is that virtually all people will lose their case when a class action lawsuit is filed. The defendant’s attorneys understand this and thus attempt to defeat any lawsuit attempting to provide any benefit to their client by arguing that the plaintiff lacks standing to sue.
Because of the difficulty of defending against class action lawsuit plaintiffs, the threat of having to pay damages if they lose their lawsuit is very real.
As a result of this threat of paying damages, many plaintiffs do not even pursue their claims in the hopes of receiving any compensation. Even, if an individual suits up and files a lawsuit against a corporation, the plaintiff will usually receive nothing unless it is able to prove that the corporation is guilty of intentional defrauding of its customers. Because of the difficulty of proving that a corporation is guilty of such actions, the vast majority of plaintiffs who receive compensation do not receive any money, even if they are successful in their lawsuit. This does not bode well for plaintiffs who wish to pursue such lawsuits.
