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Court Approves $46.6M Combined Settlement in Jay-Bee Oil & Gas Royalty Dispute

Court Approves $46.6M Combined Settlement in Jay-Bee Oil & Gas Royalty Dispute

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Nishica Srivastava
January 1, 2025
Court Approves $46.6M Combined Settlement in Jay-Bee Oil & Gas Royalty Dispute

Brenda Lee Hopper, et al. v. Jay-Bee Oil & Gas Inc., et al

Case Background

In 2020, Brenda Lee Hopper, both individually and on behalf of a group of leaseholders, filed a class action lawsuit against several hydraulic fracturing operators, including Jay-Bee Oil & Gas Inc., Jay-Bee Production Co., JB Exploration I LLC, Jay-Bee Royalty LLC, and Randall J. Broda. The lawsuit accused the Defendants of unlawfully deducting post-production expenses from royalty payments owed to the class members. The case was filed in the United States District Court, West Virginia Northern. Judge John Preston Bailey presided over this lawsuit and approved the settlement. [Case number: 20-101]

Cause

The class members include all persons and entities, including their respective successors and assigns, who, since May 21, 2010, through December 31, 2023, were paid or due royalties from Jay-Bee, under certain West Virginia oil and gas leases, excluding publicly traded oil and gas exploration companies and leases subject to binding arbitration provisions. Hopper argued that the defendants violated the terms of the oil and gas leases by failing to properly calculate and pay royalties on natural gas and natural gas liquids (NGLs).
Plaintiffs alleged that Defendants improperly deducted "Post-Production Expenses" when calculating and paying royalties to Class Members under certain oil and gas leases. They further claimed that Defendants misled Class Members by stating on monthly royalty statements that the royalties paid represented the "gross" proceeds received by Jay-Bee. In reality, these amounts were "net" of Post-Production Expenses. These expenses included costs, charges, and fees for gathering, compressing, dehydrating

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Tags

negligence
breach of contract
misrepresentation
class action
civil conspiracy
Breach of Fiduciary duty
conversion
fraud and concealment
breach of fiduciary duty