Judge upholds $404 million gas royalties verdict

By Chris Dickerson | Jun 28, 2007

SPENCER -- A much-discussed $404 million verdict concerning natural gas royalties has been upheld by a judge.

Roane Circuit Judge Tom Evans on Thursday ruled that the jury's January verdict shouldn't be overturned.

The verdict "is sustained as being fully supported by the law and the facts," he wrote in his 101-page opinion.

"The evidence, and other relevant circumstances to be considered by the court, are sufficient to sustain the verdict of jury for punitive damages in the sum of $270 million," Evans wrote. "A downward adjustment in punitive damages is not warranted under the evidence and the law and would amount to a denial of the plaintiffs/lessors' right to the due process of the law.

Evans ruled neither the size of damages nor the finding of fraud should be changed. In January, a jury awarded the plaintiffs $134.3 million in compensation and $271 million in punitive damages.

More than 10,000 gas-rights owners were part of the class-action suit filed in 2003. They claimed Columbia Natural Resources didn't pay them enough for gas royalties.

Both Chesapeake Energy -- the current owner of CNR -- and NiSource -- its former owner -- both are named as defendants in the suit.

In January, officials from both companies said they would appeal to the state Supreme Court if Evans didn't reduce the award significantly.

On Thursday, NiSource reiterated that thought.

"We believe a review of the verdict by the West Virginia Supreme Court will show that CNR acted reasonably and in good faith," the company said in a press release. "We continue to believe CNR acted reasonably and in good faith, and that punitive damages are not justified in this case."

The companies have four months to appeal to the state Supreme Court.

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