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Va. AG addresses Virginia Pilot's bias in its account of the AG
Posted on Wednesday, September 18 @ 15:35:33 MST by editor

Examine and Cross Examine

State Seal
Commonwealth of Virginia
Office of the Attorney General

name and titleaddress

 

 

For media inquiries only, contact:  Brian J. Gottstein
Email: bgottstein@oag.state.va.us (best contact method)
Phone: 804-786-5874

 

MEMO to Media:  Correcting facts in Virginian Pilot editorial on AG office's role in Southwest Virginia methane suits

RICHMOND (September 2, 2013) - This is a brief memo to media to clarify several incorrect assertions of fact in Sunday's Virginian Pilot editorial on the attorney general's role in the coalbed methane suits in Southwest Virginia.

In the September 1 editorial ("AG's explanation begins to unravel"), the Pilot editors forward the proposition that Attorney General Ken Cuccinelli has deliberately left out facts when explaining his office's role in the methane suits.  To the contrary, the attorney general has been forthcoming with the media on this case, and the facts the editors say are missing have already been reported. 

The editors also state incorrectly that unless the governor, the attorney general himself, or a grand jury gives the state inspector general permission to do so, the IG's review of the office's actions cannot look into whether the attorney general had knowledge of the assistant AG's emails at the center of the case.  That is just not true.

For the record, the attorney general had no previous knowledge of the content of his assistant AG's emails, but learned of them following a judge's comments three months ago.

The claims and the facts:

1)  The Pilot editors said another newspaper "unearthed" "new" emails showing Senior Assistant Attorney General Sharon Pigeon communicated through email dozens of times with attorneys representing energy companies in a lawsuit filed by property owners.

-- The paper didn't "unearth" anything.  Each of these emails has been known about and part of the public record for nearly a year.

2)  The editors said that the attorney general previously stated Pigeon's role was limited to defending the constitutionality of the Virginia Gas and Oil Act and that these emails had little to do with that.

-- This office has said that we officially intervened in one of the methane lawsuits to defend the constitutionality of the Virginia Gas and Oil Act (and Ms. Pigeon continues to monitor the cases because the constitutional challenges continue to be raised), but we have also said that the commonwealth had an additional interest in ensuring the court understands the reasons that a class action suit would not resolve the gas rights ownership disputes which keep the methane royalties from being released to the property owners.  Ms. Pigeon's emails were also about this.  As counsel to the Virginia Gas and Oil Board, she represents the board's interest in getting gas ownership issues resolved sooner rather than later, and she was offering her thoughts on how the attorneys could convey to the court that a years-long class action suit would not resolve the ownership disputes which keep the royalties in escrow.  While the attorney general has characterized the tone of her emails as a bit overzealous, he believes there was nothing wrong with her sharing the information she did in her emails.

3)  The Pilot said the state inspector general's review of whether Pigeon's emails were appropriate does not allow him to look into whether the attorney general had any direct involvement or knowledge of her actions unless the governor, or the attorney general himself, or a grand jury, requests he do so.

-- This is incorrect.  As we have previously stated to the media, while the inspector general has said he is not investigating the attorney general personally, the law gives the IG the authority to conduct a complete review of the AG's office, to examine any documents, and to ask any questions - even about the attorney general - without the attorney general's permission (or anyone else's, for that matter).  The IG law treats the AG's office the same as any other agency of state government.  From the beginning, the attorney general has instructed his staff to fully comply with the IG in his review.

If you have any questions, please contact Brian Gottstein at bgottstein@oag.state.va.us.

Additional background

There are currently lawsuits between property owners and gas companies in Southwest Virginia over methane gas being extracted from underground coal beds and a disagreement over how much property owners should receive in royalty payments from the gas companies that extract it.

In the process of suing the gas companies, the lawyers representing the property owners tried to have the Virginia Gas and Oil Act declared unconstitutional. If they had been successful, most of the property owners wouldn't get any royalty payments, so our office intervened in the case to uphold the constitutionality of the act, as is our legal obligation.

Before the Virginia Gas and Oil Act was enacted, whoever sunk the first well to extract the methane gas was deemed the owner of the gas and could extract it from under adjacent properties without compensating the adjacent property owners. The act allows the property owners to share in the gas production royalties.

As is typical practice, our senior assistant attorney general working on the case, Sharon Pigeon, cooperated with and shared information with both sides in the case.  Ms. Pigeon communicated with attorneys for the gas companies about the interpretation of the Gas and Oil Act because they shared a common interest with the commonwealth in protecting the law. The gas companies were using the law as their defense in the case, claiming they were following the law when they paid royalties to the property owners.

While a judge's 2011 decision upheld the act as constitutional, the property owners' attorneys continue to challenge its constitutionality to this day.  As long as there is the potential for the Virginia Gas and Oil Act to be attacked again, sharing information with the attorneys from the gas companies to help uphold the constitutionality of Virginia law is appropriate and is something we are compelled to do to fully represent the interests of the people of the commonwealth.  It is also something that we told the court and the public about more than a year ago, in June 2012.

In addition to intervening in the case to defend the constitutionality of the Virginia Gas and Oil Act, the commonwealth also has an interest in ensuring that the court understands the reasons that the plaintiffs' attorneys filing a class action suit would not resolve the gas rights ownership disputes which keep the methane royalties from being released from escrow.

Because gas rights have been sold or transferred separately from the surface land rights over the decades, and because ownership records often don't exist, currently, there are many disputes over which landowners actually own the gas rights under the land.  As long as gas rights are in dispute, the royalties for the extracted gas have to be put in an escrow account, and they cannot be released until proper ownership can be established.

In her role as legal counsel to the Virginia Gas and Oil Board, which is responsible for ultimately distributing gas royalties, Ms. Pigeon also represents the board's interest in getting gas ownership issues resolved sooner rather than later, so that the royalties can be released to their rightful owners.  Ms. Pigeon was trying to make the point in her emails that if the case were turned into a class action, that still wouldn't resolve the individual gas ownership issues that are the real obstacle to getting the royalties released.  A class action suit would go on for years, and when it was over, the property owners would be no closer to getting their money. 

As an additional note, because of these ownership disputes, in 2011, Attorney General Cuccinelli pursued major reforms to try to get royalties released to property owners.  His "dormant minerals bill" would have placed the gas ownership back in the hands of the surface landowner where the mineral ownership had sat unused for 35 years or more.  The AG reached out to Sen. Phil Puckett to patron the bill, but after first indicating he would carry it, Puckett abruptly refused at the last minute, resulting in the bill not being introduced.



 
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