United States Supreme Court allows Gorsuch to enforce $155 million against Sunoco

Written by Nate Raymond

(Reuters) – U.S. Supreme Court Judge Neil Gorsuch on Thursday rejected Sunoco LP’s request to block efforts to enforce a $155 million ruling against the fuel retailer in a lawsuit accusing it of failing to pay interest on late payments to 53,000 owners. Oil wells all over Oklahoma. .

Gorsuch denied Sunoco’s request for a stay of enforcement action while the company is appealing a 2020 federal judge’s decision finding that it violated Oklahoma law by failing to pay interest on more than 1.5 million late payments to royalty owners in wells across the state.

Gorsuch deals with specific court cases from a range of states that include Colorado.

Sunoco’s lawyers argued that if the Supreme Court did not intervene, the money could be raised and distributed to the well owners before the company could appeal a lower court’s decision to dismiss its appeal on judicial grounds.

The judges are due to be appointed on September 28 to consider whether to accept Sunoco’s appeal of the ruling. The company’s lawyers did not immediately respond to a request for comment. Lawyers for the plaintiffs declined to comment.

The ruling stems from a 2017 lawsuit filed by a farmer named Perry Klein on behalf of himself and other stakeholders in wells in Oklahoma from which Sunoco purchased crude oil and then sold it.

Klein accused Sunoco of violating an Oklahoma law called the Production Revenue Standards Act by failing for years to pay well owners legal interest on back payments it made on oil revenue. Under this law, companies that buy crude oil from the owners of wells and then are late in payment must pay the interest.

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US District Judge John Gibney concluded in 2020 that Sunoco knew it owed its interest on late proceeds but failed to make any effort to pay the interest owed and withheld more than $74 million on more than 1.5 million late payments.

The judge found that the company had long decided not to pay interest on late payments by adopting a policy of paying only if the well owner requested it, allowing it to avoid paying millions of dollars each year.

Gibney found that Sunoco “simply keeps the money for its own use, knowing two things: that most owners will not claim interest, and that potential owners’ claims will eventually die at the hands of the statute of limitations.”

The judge awarded $80 million in damages and $75 million in punitive damages.

(Reporting by Nate Raymond in Boston; Editing by Will Dunham)

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