McEvoy v. Diversified Energy Co.

The federal district court for the Northern District of West Virginia granted preliminary approval of a settlement in a class action brought by landowners against companies that allegedly failed to plug and remediate inactive wells on the plaintiffs’ property. The plaintiffs made fraudulent transfer and trespass and negligence claims. The fraudulent transfer claims alleged that one set of defendants transferred thousands of wells to a second set of defendants for more than $600 million and that the liabilities for plugging and decommissioning the wells was $2–3 billion, rendering the acquirer insolvent. The plaintiffs’ original complaint included allegations regarding methane leaks from the wells contributing to climate change and also included a nuisance claim, but damages for methane leakage and for nuisance were subsequently disclaimed. The settlement requires the company that acquired the wells to plug 2,600 wells in six states. The settlement also requires the defendants to pay up to $6.5 million to be used for costs of notice, service awards, and any awarded attorneys’ fees and costs.