WHEELING — Several individuals are suing Chevron and other oil companies over oil and gas leases, but the defendants want to compel arbitration in the case.
Chevron USA, Chevron Midcontinent LP, EQT Corporation and Union Oil Company of California were all named as defendants in the suit.
Jeffrey Allen and Janet Allen and John Regan and Connie Thomas have oil and gas leases with the defendants, according to a complaint filed in U.S. District Court for the Northern District of West Virginia.
The plaintiffs claim the defendants have taken significant deductions from the royalties owed to them each month with no legal basis.
There have also been no explanations for why the excessive amounts have been improperly deducted, according to the suit.
"Defendants, on a monthly basis, also deduct 'severance taxes' from the gross royalties payable to Plaintiffs," the complaint states. "in material breach of their obligations under the express terms of Oil and Gas Leases, Defendants have failed to deliver and pay to Plaintiffs as royalty the specified fraction of the market value of the gas produced, without deduction of costs, and have instead impermissibly deducted costs in calculating and paying royalties to Plaintiffs."
The plaintiffs claim the defendants breached their contracts with the plaintiffs and were unjustly enriched at the plaintiffs' expenses.
The plaintiffs are seeking compensatory and punitive damages. They are represented by David C. Hook, Phillip C. Hook and Joy D. Llaguno of Hook & Hook in Waynesburg, Pa.
On June 10, the defendants filed a reply in support of their motion to compel arbitration.
The defendants argue that the plaintiffs ignore that both the West Virginia Supreme Court of Appeals and a different judge in the U.S. District Court for the Northern District of West Virginia have already viewed an identical arbitration provision and determined that it is not substantively unconscionable.
"No amount of discovery or inquiry into the lease negotiations 17 years ago by non-parties to this litigation will change this, and the arbitration provision must therefore be enforced," the reply to the motion states. "Likewise, the Plaintiffs ignore that a different Judge in the Northern District also determined that this exact arbitration provision represented a 'clear, unambiguous, and broad arbitration provision covering all disputes that might arise between the parties.'"
The defendants want the court to enter an order granting the motion to compel arbitration. They are represented by Jennifer Hicks, Mark K. Dausch and Chelsea R. Heinz of Babst, Calland, Clements & Zomnir.
The case is assigned to District Judge Gina Groh.
U.S. District Court for the Northern District of West Virginia case number: 5:22-cv-00018
