We secured an extremely favorable settlement for our client, Apache, in a royalty class action in Oklahoma. The claims were brought on behalf of nearly 10,000 royalty owners and alleged that Apache underpaid the class members by more than $300 million over the course of two decades.
Such claims and large verdicts have become somewhat commonplace in Oklahoma in recent years, in part because of a statute that calls for 6%, and potentially 12%, interest on royalty underpayments. After lengthy discovery and depositions of the plaintiffs’ experts, we (along with our co-counsel) secured a summary judgment ruling that effectively dismissed the interest component of the plaintiffs’ damages model and rejected the plaintiffs’ attempt to secure a victory on their claim that Apache had failed to pay royalty on gas used as fuel off-lease. These rulings sent shockwaves through the plaintiffs’ royalty bar in Oklahoma and have been cheered by the industry, and many producers have since attempted to use the rulings to defend against similar claims in Oklahoma. With these rulings in hand, we were able to help Apache secure an extremely favorable settlement with class counsel.