On December 8, 2021, Attorney Scott Zurakowski argued before the United States Court of Appeals, Sixth Circuit on behalf of the plaintiff-class of lessors-mineral owners in 20-3469 Zehentbauer Family Land LP et al v Total E and P USA Inc et al. Our firm is seeking to reverse the district court’s decision on the deductibility of post-production costs from the class’s royalties. You can find the audio file for the argument here: https://bit.ly/3IPsl6H
The argument lasted about 30 minutes (with each side getting 15 minutes to argue). Attorney Zurakowski presented the following arguments on behalf of the class:
- The lease is a gross-proceeds lease and the Court of Appeals should reverse and remand the decision back to the lower court;
- If the Court of Appeals does not find that it was a gross-proceeds lease then it should remand the case back to the lower court because the lease provision is ambiguous and each side should be permitted to present extraneous evidence regarding their intent; and
- The lower court’s ruling did not follow the Ohio Supreme Court’s decision in Lutz which held that courts should interpret each lease provision on its own using standard contract interpretation rules and not broad-sweeping rules about how to calculate oil and gas lease royalties.
The three-judge panel asked questions to each side. We expect a decision in the next 60 to 75 days. Please let us know if you have any further questions. The filed briefs are below:
NOTE: This general summary of the law should not be used to solve individual problems since slight changes in the fact situation may require a material variance in the applicable legal advice.