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Arkansas Supreme Court Affirms Oil and Gas Commission’s Authority to Set Reasonable Royalty Rate

G. Alan Perkins and Kimberly D. Logue of PPGMR Law successfully represented SWN Production (Arkansas) in the affirmance of an amended AOGC integration order. The Order set aside a mineral owners’ attempt to set an inflated royalty rate through self-dealing leases, elect to go non-consent, and force the operator to pay the inflated royalty. AOGC agreed that the royalty rate was unreasonable, and reduced the rate the operator was required to pay during recoupment to a reasonable royalty rate based on market conditions. The appeal concerned a dispute between operator SWN Production and a group of integrated mineral owners who opted not to participate in the cost of completing a well. The mineral owners attempted to force a 25% royalty rate by executing self-dealing leases with their own oil and gas companies and arguing that SWN Production should be bound by that royalty rate during the recoupment period. At SWN Production’s request, the AOGC amended its integration order for the unit and ordered that the mineral owners could receive no more than a 1/7th royalty based on the current market. The mineral owners and their related companies appealed the Order arguing that the AOGC lacked statutory authority to make such an adjustment. The case was originally dismissed on sovereign immunity grounds. The Supreme Court reversed in 2018. On remand, the trial court affirmed the AOGC’s order setting a reasonable royalty rate. Following a second appeal, the Supreme Court has now affirmed on the merits, holding that the AOGC has statutory authority under Ark. Code Ann. §§ 15-71-110(a)(1) and 15-72-304(a) to enter integration orders and also to ensure a reasonable royalty rate. The Court observed that state agencies possess such powers as are conferred by statute or are necessarily implied from a statute. Justices Hart, Kemp, and Baker dissented.

PPGMR Obtains Appellate Reversal of Circuit Court Finding that Church Property Dispute Was Nonjusticiable

Kimberly D. Logue of PPGMR Law successfully obtained a reversal in the Arkansas Court of Appeals of a circuit court ruling that client First Presbyterian Church of Magnolia’s petition to quiet title in the “true owner” of local church property is nonjusticiable. The church claims that Presbyterian Church (U.S.A.) unlawfully declared a trust over local church assets, including real property, through the denomination’s governing documents referred to as the Book of Order. The Columbia County Circuit Court dismissed the petition as nonjusticiable on the grounds that there had been no actual harm to the church and the issue was therefore not ripe. The dismissal was reversed and remanded by the Arkansas Court of Appeals with instruction that the court must apply neutral principles of law and determine whether a valid express or implied trust in favor of the denomination exists and resolve who owns the property.

PPGMR Law Services Continue During Coronavirus Pandemic

Like you, we are closely monitoring the novel coronavirus (COVID-19) landscape, and are taking proactive steps to best ensure continued operations and the safety of our people. While we are discouraging non-essential in-person meetings and encouraging remote work in many situations, our attorneys continue to be accessible via email, phone, and video conference. All employees working remotely are equipped to do so in a technologically secure way. We will continue to follow the guidance of public health experts, but assure you that we are prepared to provide uninterrupted services for our clients during this uncertain time. We are thankful to be part of your team, and will continue to be with you along the way.

PPGMR Defeats Summary Judgment in Antitrust Battle Over Mobile Dial Code Market

January 2020 - Julie Greathouse and Christine Dillard of PPGMR Law, along with co-counsel David Kesselman and Trevor Stockinger of Kesselman Brantley Stockinger LLP, representing plaintiff Sumotext Corp., successfully defeated a motion for summary judgment in a federal antitrust case involving the leasing and servicing of mobile dial codes (often referred to as mobile StarStar numbers). Sumotext contends that defendants Virtual Hold Technology, LLC, StarSteve LLC, VHT StarStar LLC, and Zoove Corp., embarked upon an anticompetitive scheme to restrain trade and monopolize the markets for leasing and servicing of mobile dial codes – in violation of Sections 1 and 2 of the Sherman Act. After extensive briefing and oral argument, the district court issued a written order denying in full defendants’ motion for summary judgment on December 20, 2019. Trial is scheduled to commence on February 24, 2020. The case is Sumotext Corp. v. Zoove, Inc., et al., Case No. 5:16-cv-01370-BLF-NMCx (N.D. Cal.).