ExxonMobil plans to appeal gas royalty owners' class action lawsuit

ExxonMobil Corp. Thursday said it will appeal a federal judge's certification of a nationwide class action suit filed by gas royalty owners against Exxon Corp., now ExxonMobil Corp. The law firm Fleming & Associates LLP, Houston, filed the suit on behalf of the plaintiffs, which attorneys estimate at nearly 70,000.


By the OGJ Online Staff

HOUSTON, May 24 -- ExxonMobil Corp. Thursday said it will appeal a San Antonio federal judge's decision to certify a nationwide class action suit filed by gas royalty owners against Exxon, now ExxonMobil.

"We will appeal to the Firth Circuit Court in New Orleans," ExxonMobil spokeswoman Suzanne McCarron told OGJ Online.

Judge Edward C. Prado of the US District Court for the Western District of Texas in San Antonio, Tex., certified the class action suit. McCarron said ExxonMobil will argue it is inappropriate to certify a class of royalty owners located in different states and having different lease agreements.

"We try to deal openly and honestly with royalty owners," she said.

Fleming & Associates LLP, Houston, filed the suit on behalf of the plaintiffs, which attorneys estimate at nearly 70,000. The gas royalty owners leased their mineral rights to Exxon in exchange for royalties produced from the sale of gas and gas liquids.

The lawsuit alleges Exxon unfairly determined the royalties to be received.

Royalty owners claim Exxon and its affiliates engaged in a "gas value chain" scheme of operation in which Exxon allows its affiliates to produce, gather, process, transport, and market the gas, while making "excessive profits" at each stage of the chain.

"Exxon has been skimming money off the top and leaving these royalty owners high and dry," alleged attorney Robert R. Herring of Fleming & Associates. "They funnel money to themselves through their affiliates, unfairly calculating the basis on which royalties should be paid, thus underpaying royalty owners. Exxon clearly has violated its contractual duty to market this gas diligently."

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