Eaton v. Ascent Resources – Utica, LLC, S.D. Ohio Case No. 2:19-cv-3412
On August 4, 2021, Judge Edmund A. Sargus, Jr. issued an Opinion and Order certifying a class and five sub-classes of persons or entities alleging underpaid royalties from Ascent Resources – Utica, LLC (“Ascent”) based upon leases for gas or oil wells. This landmark ruling marks one of the first cases in which an Ohio court has certified a class action regarding the underpayment of oil and gas royalties. Three of the subclasses involve Plaintiffs’ claims that Ascent systematically overcharges landowners for post-production expenses such as gathering, compression, processing of liquids, and pipeline transportation charges. According to Plaintiffs, Ascent pays these expenses to “affiliated” companies in violation of the law and then takes inflated deductions from the landowners for these expenses. The end result is that mineral owners’ net royalties are significantly reduced. The remaining two subclasses involve “market enhancement” leases, which require Ascent to increase or enhance the value of the product sold before being able to take various deductions. Plaintiffs alleged that Ascent fails to satisfy this condition precedent.
On August 14, 2021, Ascent filed a motion for leave with the Sixth Circuit Court of Appeals to obtain an interlocutory appeal of the class certification under Fed. R. Civ. P. 23(f). Plaintiffs filed their opposition on August 20, 2021. The matter has been fully briefed. Discovery will proceed on liability issues in the district court while the request for an interlocutory appeal is pending.
