Landowners: Act Now or be Bound by Class Action Settlement Terms

By Robert J. Burnett and William J. Blakemore

If you have a lease with Chesapeake, you could be impacted by the recent class action settlement in the Demchak Partners Limited Partnership v. Chesapeake Appalachia, LLC litigation. The proposed class action settlement provides monetary relief to members of the settlement class but permits Chesapeake to continue to deduct post-production costs in the future.

Who is a member of the settlement class? Generally, the class consists of any landowner who:

  • has a lease with Chesapeake in Pennsylvania,
  • the lease contains a "market enhancement clause," and
  • the landowner received royalties subject to deductions pursuant to the lease.

If you meet these criteria and you do not "opt out" of the class action settlement, you will be bound by the settlement terms and may lose the ability to independently litigate or pursue claims against Chesapeake.

The deadline to "opt out" of the class settlement is December 17, 2015. Given the complexity of the class settlement and the potential ramifications of the settlement on your lease, we urge all landowners who have leases with Chesapeake to immediately consult with a qualified and knowledgeable oil and gas attorney.