LISBON, Ohio (WKBN) — A second class action lawsuit has been filed by local property owners against Chesapeake Energy Corp., claiming royalties are being underpaid on the actual production of wells in the area.
The Morning Journal reports that the lawsuit claims Chesapeake Energy, the parent company of Chesapeake Exploration and Chesapeake Operating LLC, an affiliate of Chesapeake Exploration, are conspiring to defraud local land owners with gas and oil leases out of full royalty payments.
According to the lawsuit, the defendants falsely reported natural gas liquids were being sold at a steep loss, canceling out the royalties and sometimes diminishing the royalties of other products such as natural gas and oil being produced. The lawsuit alleges that the defendant reported more fuel was being used to produce the product than was actually being reported to the Ohio Department of Natural Resources, leading to less revenue for the property owners, among other discrepancies noted in the lawsuit.
Similar to a previous lawsuit filed in Columbiana County Common Pleas Court in late October, this lawsuit claims the royalties are being paid on a much lower than market sales price, instead of the final price being paid by the third-party buyer, according to the Morning Journal.
The lawsuit was filed on behalf of a long list of plaintiffs led by Hope Christian Fellowship, also known as New Hope Community Church in Wellsville. It noted that there are more than 2,000 people and organizations who could be party to the class action lawsuit.
The lawsuit asks the court to find the Chesapeake defendants in violation of the Ohio Corrupt Practices Act, including engaging in patterns of corrupt activity, racketeering activity and theft by deception. It further asks the court to stop future fraudulent activities by the defendants and to pay compensatory damages to the plaintiffs.
The lawsuit was filed electronically Wednesday afternoon in U.S. District Court for the Northern District of Ohio, Eastern Division, in Youngstown.