The Law Offices of Dale Lipsmeyer, Smolen, Smolen, & Roytman, PLLC, and Caruso Law Firm, PC Announce Class Certification Granted in Action Against SEECO, Inc.

A team of experienced oil and gas trial lawyers representing Arkansas land owners today announced class action status has been granted in an action against SEECO, Inc. (n/k/a SWN Production (Arkansas), Inc.), a major independent oil and gas exploration and production company headquartered in Houston, Texas.

SEECO is a wholly owned subsidiary of Southwestern Energy Company (SWN) and the largest operator in the Fayetteville Shale gas reservoir. SEECO extracts gas from the Fayetteville Shale through hydraulic fracturing or fracking techniques. The complaint alleges that SEECO engaged in a fraudulent scheme to skim over 100 Million Dollars from Arkansas royalty owners by underpaying royalties over the last eight years.

Certification of the case as a class action allows the plaintiff to pursue his claims on behalf of thousands of Arkansas royalty owners. In certifying the case, the court explained that “Arkansas has a long history of supporting the social utility of class actions” and “provides a method for real efficiencies to be achieved for the public, the judicial system and all concerned parties.”

The complaint alleges that SEECO engaged in a fraudulent scheme along with affiliated entities by taking gas production from the wells and never paying royalty on it, intentionally reporting false and misleading information on the check stubs, and deducting fees and costs that were in excess of those allowed under the lease. Plaintiff’s lawyers argued at the class certification hearing, as one example of SEECO’s fraud, that SEECO fraudulently charged treatment fees on gas that were never actually incurred by SEECO because the gas was never treated.

The class, which was certified on October 10, 2014 by the Honorable Terry Sullivan of the Conway County Circuit Court, is seeking actual and punitive damages based on breach of contract, fraud, bad faith, deceit, conversion, unjust enrichment, and violation of Arkansas statutory laws. Additional claims include an accounting and imposition of a constructive trust over the gas proceeds as well as disgorgement of the alleged ill-gotten profits and benefits derived from the fraudulent scheme. SEECO denies the allegations and claims of the plaintiff and the class.

The court appointed Mr. Eldridge Snow as the class representative. Mr. Snow and the class are represented by Daniel E. Smolen of The Law Office of Smolen , Smolen, & Roytman, PLLC, Tulsa, Oklahoma (918) 585-2667; Dale Lipsmeyer of Morrilton Arkansas (501) 354-2288; and Dennis A. Caruso of the Caruso Law Firm, PC, Tulsa, Oklahoma (918) 583-5900.

In 2000, the Arkansas Supreme Court, in an unrelated royalty class action, affirmed a Fort Smith’s jury verdict against SEECO, Inc., Southwestern Energy Company and Arkansas Western Gas Company where the jury found that the plaintiff royalty owners had proven their claims for breach of the leases, deceit, constructive fraud, fraudulent concealment, interference with a contractual relationship, and civil conspiracy. The jury also found in special verdicts that Southwestern Energy Company and Arkansas Western Gas Company were alter egos of SEECO. The judge entered judgment against defendants in the amount of $93,222,157.