Judge frustrated in coalbed methane case linked to governor’s race

ABINGDON — Two hours of legal debate on Virginia’s natural gas laws passed Thursday when U.S. District Court Judge James P. Jones suddenly voiced frustration over the seeming inability of anyone to easily access an escrow account holding nearly $30 million in gas royalties.

“Are we going to throw up our hands and say ‘oh well, that’s how the world works?’ ” he directed at coal and energy company lawyers during a hearing. “All these people don’t get their money in escrow?”

In all, Jones heard three hours of arguments on whether five cases filed against CNX Gas and EQT Production for the royalties on natural gas siphoned from beneath Southwest Virginia can move forward as class-action lawsuits representing more than a thousand landowners. The cases might die without his certification for class action.

A decision will come as soon as possible, the judge said.

Energy company lawyers say the accounts can be accessed only if landowners battle over each and every deed in local circuit courts, and not as a handful of cases in federal court.

But landowner attorneys say the solution is as simple as handing a judicial declaration of ownership to the Virginia Gas and Oil Board, which oversees the escrow account and can dole out royalties only under a certain set of legal conditions.

Jones noted his frustration because case lawyers and state lawmakers have yet to come up with a viable solution for property owners.

“I had hoped that in the three years this case has been going on there would be some attempt to settle the matter or the Virginia legislature would attempt to settle the matter,” he said.

In June, the case became a hot topic in Virginia’s gubernatorial race after U.S. Magistrate Judge Pamela Meade Sargent noted shock that a staffer for the state attorney general’s office seemed to be emailing legal advice to energy company lawyers. Sargent, usually the first judge to hear arguments in this case, pointed out the emails in an 85-page report recommending that Jones greenlight class-action status for all but one of the cases.

Attorney General Ken Cuccinelli, the Republican candidate for governor, argues that his office jumped into the court battle years ago only to fight the constitutional challenges to the Virginia Gas Act, which set up the escrow account.

Democratic gubernatorial candidate Terry McAuliffe points to the more than $110,000 in campaign cash that CNX parent company, CONSOL, has dropped into Cuccinelli’s campaign coffers since 2012 and questions his motivation in the cases.

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