Jones Walker Obtains Favorable Ruling in the Haynesville Shale Case

HOUSTON, Oct. 26 /PRNewswire/ -- The United States District Court for the Western District of Louisiana on September 29, 2010, granted a motion to the defendants to dismiss in favor of Jones Walker clients, Chesapeake Louisiana L.P., Petrohawk Properties, L.P., Red River Services, LLC, and Delta Lands Exploration, Inc. in the case of HMB Interests, et al. v. Chesapeake Louisiana, L.P., et al.  This case was a putative class action brought on behalf of all lessors who entered into mineral leases between July 1, 2006, and June 30, 2008, in those parishes in Northwest Louisiana overlying the Haynesville Shale formation.  Michael B. Donald, Joshua A. Norris, Nicole M. Duarte and other members of the Jones Walker Houston office represented these natural gas operators and land services companies in this action in which the mineral lessors sought rescission of their oil, gas and mineral leases based on their alleged error as to the possible presence of the Haynesville Shale formation beneath their property.

The court agreed with Jones Walker's argument that any such error did not provide a legally sufficient basis for rescission because it did not relate to the "cause" or a "substantial quality" of the mineral leases, which were entered, as noted by the Court, "specifically for the purpose of allowing the Defendants to explore and exploit their land for oil and gas."  The Court rejected Plaintiffs' attempts to characterize the Haynesville Shale as something different than what it is –i.e., "minerals for which Plaintiffs negotiated a mineral lease."  Accordingly, the Court dismissed Plaintiffs' claims for error, as well as any claims for "lesion beyond moiety."

The Court's substantive ruling in this action follows on the heels of an equally significant procedural ruling in which the Court upheld the existence of jurisdiction over the action under the Class Action Fairness Act (CAFA), a relatively recent enactment providing for federal jurisdiction over putative class actions in certain circumstances.  In that ruling, the court agreed with Jones Walker's arguments that the Plaintiffs had failed to satisfy their burden of proving the existence of an exception to CAFA jurisdiction.

Jones, Walker, Waechter, Poitevent, Carrere & Denegre L.L.P. (www.joneswalker.com), with more than 300 attorneys,  provides a comprehensive range of legal services to a national and international corporate client base, many in highly regulated industries through offices in Alabama, Arizona, the District of Columbia, Florida, Louisiana, and Texas.

SOURCE Jones Walker