Lindauer et. al v. Williams Production RMT Company

Lindauer et. al v. Williams Production RMT Company, Case No. 2006 CV 317 (Garfield County, Colorado)

Plaintiff Ivo Lindauer (and others) filed this action on September 20, 2006, against Williams Production RMT Company (“Williams”). The plaintiffs sought permission of the court to bring the action on behalf of a plaintiff class, which generally consisted of Williams’ royalty owners and overriding royalty owners with gas production in Garfield County, Colorado. Plaintiffs alleged that Williams was underpaying royalties to members of the plaintiff class.

In October 2008, the parties to the lawsuit agreed to a partial settlement, regarding one of the claims. The Garfield County district court approved the partial settlement agreement. The partial settlement agreement resulted in the payment by Williams of approximately 4.7 million dollars, including attorney fees and expenses. That amount was distributed to class members in 2009. The settlement agreement reserved for later litigation two claims of the plaintiff class: (1) that Williams wrongfully deducted “transportation” expenses from royalty payments under “gross proceeds” leases (“the First Reserved Claim”); and (2) that Williams failed to enhance the royalty payments by transporting the gas to a distant sales point (“the Second Reserved Claim”).

The plaintiff class did not prevail on the First Reserved Claim. The Garfield County district court ruled against them, as did the Colorado Court of Appeals.

The plaintiff class then pursued their Second Reserved Claim. That claim went to trial before the Garfield County district court judge, sitting without a jury. After the trial, the court ordered Williams to perform an accounting, which revealed that Williams had underpaid certain members of the plaintiff class by approximately 5 million dollars, including interest. The court set for hearing on November 20, 2014, class counsel’s application for recovery of attorney fees and expenses as well as other matters. Williams has stated that it intends to appeal, once the final judgment is entered.