CHARLESTON – The West Virginia State Supreme Court is revisiting a controversial decision made last year impacting the amount of money natural gas companies pay to certain royalty owners. At issue is whether gas company production costs, such as transport of the gas, can be deducted from property owners’ royalty checks.

Kercheval
Kercheval

Pittsburgh-based EQT Production Company argues the deductions are allowed under the law, but the royalty owners say that interpretation denied them their appropriate compensation for the gas.

The case of Leggett v. EQT Production Company gets complicated, with debate centering on what the term “at the wellhead” means. But there is also a political drama playing out here.

Last fall the high court ruled 3-2 in favor of the royalty owners, with Justices Brent Benjamin, Robin Davis and Margaret Workman on one side, while Menis Ketchum and Allen Loughry were in the minority. For a while, the case appeared settled.

However, two things happened: EQT filed for a rehearing and Benjamin lost his bid for re-election to Beth Walker. Her election to the court provided a swing vote to rehear the case, which the Justices did on May 2.

Re-arguing Leggett v. EQT has put Walker in the spotlight after just five months into her 12-year term.

Rehearings by the high court are very rare, and the only change since the court’s decision last November is that Walker was elected. Walker ran as a conservative, pro-business candidate so she may be choosing to exert her influence on the court. Critics have suggested Walker’s support of a rehearing injects politics into the high court.

However, supporters of the rehearing argue that’s unfair to Walker and presumes she is unable to make a non-biased decision. Remember that Loughry and Ketchum also wanted the rehearing and disagreed with the ruling last fall.

Loughry’s dissent was scathing. He wrote that Benjamin and the majority ignored key facts of the case and were “hoodwinked” into reaching the wrong conclusion, so Walker is not alone if she believes the decision was flawed.

Walker could have stepped aside in this case. After all, she did not hear the original arguments and she’s taking heat for a potential conflict of interest because her husband, Michael, who put $525,000 into her race, had significant holdings in the gas industry. (In a court memorandum issued Monday, Walker said neither she nor her husband has or had any economic interest in the case but “out of an abundance of caution” Michael Walker has sold his holdings.)

She stayed on, possibly because judges typically believe they can be independent arbiters even if the public perceives them as having an agenda.

What matters most is that Walker, and all the justices, reach their decision based on the law. If Walker casts the deciding vote that flips the case in favor of EQT, she will forever hear the criticism that a court decision was reversed by her election.

But that should not impact her thinking. The guiding principle for a state Supreme Court Justice — which history tells us is occasionally ignored — can be found in the preamble of the state Code of Judicial Conduct: “An independent, fair and impartial judiciary is indispensable to our system of justice.”

Kercheval is host of TalkLine, broadcast by the MetroNews Statewide Radio Network from 10 a.m. to noon Monday through Friday.

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West Virginia Supreme Court
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Charleston, WV 25305

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