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Tuesday, April 7, 2015

Judge Denies Motion to Dismiss Racketeering Case Against Chesapeake Energy

From Citizens' Voice:
A federal judge has denied Chesapeake Energy Corp.’s motion to dismiss a class action lawsuit that alleges the company conspired with subsidiaries it formed to overcharge leaseholders by artificially inflating the cost to gather natural gas extracted from Marcellus Shale drilling. 
U.S. District Judge Malachy Mannion on Tuesday ruled the Suessenbach Family Limited Partnership had presented sufficient evidence at this state of the litigation to proceed with its lawsuit against Chesapeake and its subsidiary, Access Midstream Partners. 
The lawsuit, filed in June 2014 by attorney Robert Schaub of Wilkes-Barre, alleges Chesapeake formed Access Midstream in August 2010 to gather and transport natural gas from its drilling operations. The companies then conspired to have Access Midstream charge Chesapeake fees far above industry standards, which were passed on to leaseholders. Access Midstream then rebated a portion of the inflated fees to Chesapeake. 
The suit sought damages on several counts, including unjust enrichment, conversion and civil violations of the of the Racketeer Influence and Corrupt Organizations Act. The racketeering count was based on allegations the companies’ actions constituted an ongoing fraud perpetrated against leaseholders.
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