The 10th U.S. District Court of Appeals in Denver has upheld a $60 million judgment against a New Jersey gas company and in favor of a Colorado gas supply company.
The ruling came as a result of lawsuits filed concerning an 8-year contract for Antero Resources Company, headquartered in Denver, to deliver natural gas from the Marcellus Shale formation to gas meters located on the Columbia Pipeline in West Virginia.
Gas pricing was tied to the Columbia Appalachia Index. But during the contract, the price of natural gas linked to the Index went up and South Jersey balked at paying the higher prices. South Jersey sued Antero in New Jersey state court for failing to negotiate a replacement index and started paying a lower price based on a different index.
Anteror counter-sued in Colorado federal court for breach of contract. The lawsuits were consolidated in Colorado and during trial, a jury rejected the claims of South Jersey and found it had indeed breached the contract. The jury said Antero was entitled to $60 million in damages.
South Jersey appealed but the Tenth Circuit ruled a reasonable jury could find South Jersey breached its contract with Antero because the gas Index was not discontinued nor did it materially change.