Title Washing declared unconstitutional by PA court

I saw this over on another forum.  Here is the link:

Link to title washing discussion

On chance this will hold up after scrutiny in higher courts, our own "Amy with the 10,000 acres" in Tioga County, PA, is going to have a huge, watermelon smile on her face this morning.

But, sadly, many others of us could be badly hurt.  We might not own what we today believe we own.

Anyway FWIW, after reading the 14th Amendment to the Constitution of the United States of America, I have to agree with the trial court Judge.  

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Permalink Reply by Bonefish on November 21, 2013 at 11:45am

An update for everyone.

SM Energy v. Endeavor case in the Harris County Texas District Court (Google the Court and then search the filings).

And http://hoytroyalty.com/2013/11/21/herder-spring-hunt-club-v-keller-...

Have a Happy Thanksgiving!

Permalink Reply by Bonefish on January 28, 2015 at 9:04pm

Another update.  The PA Supreme Court will review the Superior Court's decision.

http://www.pacourts.us/assets/opinions/Supreme/out/556MAL2014%20-%2...

Permalink Reply by Frank Walker on January 29, 2015 at 3:27am

OMG, Bonefish, you are the MAN (or woman as the case may be).  This is absolutely remarkable stuff for many PA landowners.  And your excellent link is incredibly helpful.  If I may say so:

The PA Supreme Court does NOT sound happy!!

Bonefish, thank you so much for posting that link!  Before seeing your post, I had no clue.  This stuff is so darn important, but the glacial pace of such things through the courts dulls the mind.

Still, if prior mineral rights are reinstated, the loss for many landowners could change and manifestly complicate their lives, and the lives of their family members, too.

It has been written many times before in various landowner forums, but I'll give this counsel one more spin:

DO NOT COUNT YOUR CHICKENS!

Also, here is my wish for PA landowners reading this:

I hope for your sake that your lease contains language saying you offer NO warranty regarding your title to your minerals.

Otherwise, I have a word for you:  Clawback

Definition of clawback

For anyone who might not be clear, what I'm saying it that without protective language in your lease, and if the Supreme Court reinstates mineral rights from long ago as Bonefish's link suggests might happen, that your gas company, at its sole discretion, might come to you and demand you pay back bonus and royalty money you received in the past.

How could this be?  It's because the gas company would be forced to pay that same bonus and royalty money to the rightful owners of minerals thought prior to belong to you.  And the gas companies are not going to pay double!

Permalink Reply by Bonefish on January 29, 2015 at 5:09am

I’m with you.  I am not a lawyer, so it’s not legal advice, but a reservation on chain needs to be addressed and accounted for.

 

I am not so sure about the clawback risk.  It seems to me that if the surface owner made an honest-to-goodness mistake by listening to self-proclaimed "experts" and Powerpointers (many of whom read this board), that mineral owner would want to let the past be, and create a good relationship with the surface owner.  I know my family has contemplated giving our surface owner a royalty just because it is their HOME.  And besides, there are protections for good-faith mistakes.

Let's not count those chickens.  The Court could affirm and title-wash become law of the land.  Then we can all expect an appeal to the U.S. Supreme Court, and many more lawsuits trying to punch holes in the opinion.

Permalink Reply by Frank Walker on January 29, 2015 at 6:31am

I respect your opinion.  But I continue to think clawback risk is real.  However, the risk level certainly will vary, depending on with which gas company a landowner is partnered.

I expect Chesapeake Lessors will be among the first to be clawed, if the Supremes go against us.

As far as Federal appeals go, after the PA Supreme Court has ruled . . well . . I'm not seeing a Federal role in this situation.  This is unique PA law all the way back, and the ruling here, whichever way it goes, will not impact or in any manner influence other states.  

Permalink Reply by Bonefish on January 29, 2015 at 6:18am
Permalink Reply by Frank Walker on January 29, 2015 at 6:49am

That's an even better link 'cause it's all HTML.

I read it again and lemmie tell you:  The Supreme Court writing sounds downright hostile toward the position taken by the Superior Court.  I mean, that language is almost nasty!

An observation:

Many knowledgeable observers believe the Supreme Court would never restore those old mineral rights because of how unsettling the ruling would be.  Such a ruling could be personally disruptive to many of us, and to the gas companies, too.  It could disrupt much of the shale industry here in PA, costing jobs, curtailing profits, and impacting tax receipts as royalty payments stall.  But consider . .

This same PA Supreme Court did not hesitate in 2010 to hand down the Kilmer decision, which has been very harmful and massively disruptive to huge numbers of in-the-shale landowners.  While this present matter, if decided in a manner which restores old mineral rights, would be even more disruptive, it's not as if the PA Supreme Court eschews controversy. 

Permalink Reply by Bonefish on March 26, 2015 at 8:19pm

Hi Everyone.  A little late and the one-year-old had trouble sleeping.

Check Hoyt Royalty's page.  It has been updated with Appellant briefs.

HERE

I'm going to move my responses over to Frank's Herder thread.

Bone

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