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Gas company defends actions of state lawyer

The state had intervened in lawsuits over royalties that landowners said were not being paid.

Ken Cuccinelli

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David Ress | 981-3253

Tuesday, June 25, 2013

One of the gas companies a state lawyer helped in a lawsuit over royalty payments says a federal judge was out of line when she said she was shocked by the lawyer’s actions.

Emails from the state lawyer that the judge cited weren’t relevant “and should not ‘shock’ anyone,” EQT Production Co. said in formal objection to the judge’s decision that landowners suing it for payment of royalties had grounds for a class action case.

“The Magistrate Judge’s comment about the messages is just a gratuitous personal observation,” EQT added.

The state had intervened in lawsuits over royalties in what it said would be a limited way to defend the constitutionality of the Virginia Gas and Oil Act.

But Sharon Pigeon, an assistant attorney general, was actively involved in helping the gas companies fend off landowners’ claims that the companies had not paid royalties they were owed, Judge Pamela Meade Sargent wrote earlier this month. One of the companies, Consol Energy, gave more than $111,000 to Attorney General Ken Cuccinelli’s gubernatorial campaign.

Sargent described Pigeon’s actions in the case as shocking.

“It is the legitimate, indeed critical, function of the Attorney General to defend State statutes against attacks of invalidity,” including the state Gas and Oil Act at issue in the royalty cases, EQT said, in criticizing Sargent’s comments about Pigeon.

It said the Gas and Oil Act has explicit procedures for the payment of royalties when there are conflicts over rights to gas, while the Virginia Department of Mines, Minerals and Energy has held that a 2004 court ruling that gas rights belonged to the surface landowner did not apply generally.

EQT said the landowners’ lawsuits “can be fairly viewed as an attempt to undercut the agency’s position on this point,” adding “there are important federalism issues throughout this litigation, and the Attorney General has a vital and legitimate interest in them.”

Legislation in 2010 that would have written the 2004 court decision into law was invalid, Cuccinelli ruled a few days before it was to take effect.

He held it didn’t supersede provisions in the Gas and Oil Act that say the board can only release royalties after a court decision on who holds the rights or if all claimants to the gas rights agree on how to pay out the royalties.

The sponsor of the 2010 legislation, state Sen. Phillip Puckett, D-Russell County, has said it was Cuccinelli’s ruling that convinced landowners that they needed to go to federal court.

Saturday, September 14, 2013