The return of the `friendly lawsuit’

Cloyce Box, as a receiver for the Detroit Lions in the early 1950s.

Cloyce Box, as a receiver for the Detroit Lions in the early 1950s.

The shale boom has revived the uniquely Texas tradition of the “friendly lawsuit,” as I discuss in a post on texasmonthly.com:

The oil boom is back, so it stands to reason that other affectations of Oil Patch abundance wouldn’t be far behind. Like the “friendly lawsuit.” Recently, the city of Fort Worth sued Cheasapeake Energy, the Oklahoma City-based natural gas producer that owns about 500 mineral leases on city property. The city claims Chesapeake has been shortchanging it on royalties. It’s the type of dispute that’s almost as old as oil itself. In fact, the neighboring city of Arlington sued Chesapeake in August, seeking $1 million in royalty-related claims, and the company last year settled a royalty dispute with the Dallas/Fort Worth International Airport  by agreeing to a $5 million payment.

Chesapeake and Fort Worth have had a close relationship for years, and since 2006, the company has paid the city tens of millions of dollars in royalties. Now, the city claims Chesapeake hasn’t been using the right formulas to calculate those payments. The dispute, though, hasn’t soured the relationship. The city says it has no intention of severing ties with Chesapeake.

While they stopped short of using the term “friendly lawsuit,” it reminded me the wildcatters of old, who could be signing legal documents with one hand, and shaking on a new deal with the other. I first encountered the notion of a friendly lawsuit when I interviewed Cloyce Box, the legendary Dallas wildcatter and former pro football star known for his litigious ways.

Read more here.

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About lorensteffy

Loren Steffy is a writer, speaker and consultant. He is the author of Drowning in Oil: BP and the Reckless Pursuit of Profit published by McGraw-Hill in 2010 and The Man Who Thought Like a Ship, published by Texas A&M University Press in April 2012. A journalist for more than 25 years, he was most recently the business columnist for the Houston Chronicle.
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One Response to The return of the `friendly lawsuit’

  1. Michael R. Wimberly says:

    Similar accusations by Royalty owners have been made in the East where Cheasapeak takes advantage of inadequate State Laws

    Like

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