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Gas Drilling Firms Defeat Pennsylvania's Antitrust Lawsuit

Keith Srakocic

Pennsylvania's highest court has delivered a victory for natural gas exploration firms, ruling that the state attorney general's office doesn't have authority under state law to sue them on antitrust grounds over their mineral rights-leasing practices.

The bid by the attorney general's office to pursue an anti-trust action under state law had attracted the close attention of major business groups in Pennsylvania, the nation's No. 2 gas-producing state.

But the state Supreme Court, in a 6-1 decision late Wednesday, overturned lower court decisions and agreed with Texas-based Anadarko Petroleum Corp. that state consumer protection law does not allow sellers to take action against buyers.

As a result, the court declined to rule on whether the attorney general’s office has the legal authority to pursue an anti-trust action under the law.

The attorney general's office sued in 2015, accusing Anadarko and Chesapeake Energy Corp. of Oklahoma City of eliminating competition and shortchanging landowners of signing bonuses and royalties by divvying up counties in northern Pennsylvania in which to lease mineral rights.

Anadarko had argued that it was not a seller of services and not subject to action under state consumer protection law. The companies were buying mineral rights in land leases, not selling, they contended.

Occidental Petroleum Corp. bought Anadarko in 2019. Chesapeake's appeal was dropped from the case last year when it filed for federal bankruptcy protection.

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