Class Action Lawsuit over Alleged Bid-Rigging Could Involve Thousands of Lease Holders

The class-action federal lawsuit filed against Chesapeake Energy, SandRidge Energy and former SandRidge Energy CEO Tom Ward suggests there could be thousands of plaintiffs joining the suit. And the list of plaintiffs could extend into the Texas Panhandle, southeast Colorado and into Kansas—not just northwest Oklahoma.

The suit, filed by Alfalfa County landowner Brian Thieme who is a resident of Colorado closely followed the indictment leveled nearly a week ago against oil and gas producer and explorer Aubrey McClendon before he died in the crash of his SUV in Oklahoma City. Some of the wording in the lawsuit, filed by Dallas, Texas attorney Warren Burns of the Burns Charest LLP firm was the same as in the criminal indictment which was eventually dropped by federal prosecutors a day after McClendon’s death.

Just as the criminal indictment accused McClendon of bid-rigging, the civil lawsuit filed in Oklahoma City federal court makes the same claim.

“This action arises out of a conspiracy to rig bids and depress the market for purchases of oil and natural gas leasehold interests and properties containing producing oil and natural gas wells, in violation of “the Sherman Antitrust Act.” Just as the indictment claimed the conspiracy began on Dec. 27, 2007, the civil suit makes the same claim.

It also noted that the bids were sought in the expansive Anadarko Basin Region which stretches beyond northwest Oklahoma and into north Texas, southeast Colorado and Kansas. The suit specified 42 different counties in Oklahoma, 50 in Kansas, 14 in Texas and two in Colorado where the alleged scheme involved producing wells and leases.

Exactly how many property and lease holders could be involved? The suit indicated, “Plaintiff does not know the exact number of members of the Class because such informaton is in the exclusive control of Defendants. Due to the nature of the trade and commerce involved, however, Plaintiff believes that Class members number at least in the hundreds of thousands and are sufficiently numerous and geographically dispersed so that joinder of all Class members is impracticable.”

It is unclear just how long the law firm was working on the class-action lawsuit. Warren Burns did not respond to a phone inquiry from OK Energy Today and Douglas D. Wilguess of Wilguess and Garrett in Oklahoma City, one of two local attorneys hired to do some of the local legwork, would not comment, saying Burns is “fielding all press inquiries.”

But the lawsuit noted that the federal indictment against McClendon came down on March 1.

“Plaintiff and members of the Class did not discover, and could not have discovered through the exercise of reasonable diligence, the existence of the conspiracy alleged herein until at or about March 1, 2016, the date on which the indictment of Mr. McClendon and the unnamed co-conspirators became public,” stated the suit. “Accordingly, Plaintiff could not have had either actual or constructive knowledge of the price fixing scheme until Mr. McClendon and the unnamed co-conspirators indictment became public.”

The suit also said it was impossible to know the prices for which the defendants in the unlawful conduct “sold their leasehold interests or producing properties were artificially depressed during the Class Period.”


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