Supreme Court Ruling Likely to Trigger Litigation For Oil Companies

(Photo by Kyle Martin/For the North Dakota Monitor)

(North Dakota Monitor) – A recent North Dakota Supreme Court decision could have ripple effects for thousands of oil wells, the mineral owners who receive royalties from them and the oil industry in the state as a whole.

The decision voided one order, issued by the board responsible for oil and gas regulation in North Dakota, on who should receive royalties from a particular well in McKenzie County.

Yet the outcome in the case could have implications for mineral owners who receive royalties from a growing category of oil wells in North Dakota. The attorney who initiated the lawsuit sees the court’s decision as an unambiguous victory for mineral owners he alleges are being underpaid by oil companies.

“The Supreme Court got this one right,” said Jonathan Garaas, the Fargo attorney who filed the lawsuit appealing the North Dakota Industrial Commission order on behalf of his family’s three trusts. “Apparently 85% of the oil companies got it wrong, and they’re going to have to start paying monies to the mineral owners who were cheated out of their proceeds and try and claw back monies that were wrongfully paid to people.”