Landowners hope Occidental settlement will protect rights

CHEYENNE — Carrie Deselms’ family has been in Wyoming for generations, ever since her great-grandparents immigrated from Sweden to homestead in the West.

Like many farmers in eastern Wyoming, Deselms now runs her farm on generational land acquired by both sides of her family. In addition to inheriting a strong work ethic and a knack for managing the tight budget of a family farm, Deselms inherited the mineral rights to a plot her ancestors acquired after land ownership was split up in Wyoming to fund the railroad.

Deselms inherited the mineral rights roughly a decade ago, and almost immediately she was alerted to the role that Anadarko Petroleum Corporation and its parent company, Occidental Petroleum Corporation, played in limiting her access to those rights.

More than five years ago, Deselms received a call from a man informing her that he was coming to “stake” her property to be drilled later in the week. It was this call that sparked a five-year antitrust, class-action lawsuit that was settled in August for $12 million, the same day the case was set to go to trial.

Other Wyoming landowners joined Deselms, filing the suit in November 2019.

The complaint accused the extraction company of anti-competitively hoarding permits, effectively controlling local oil and gas development.

The group alleged that Anadarko did this by collecting drilling permits without intending to use them, limiting competitor access to certain areas. The suit additionally alleged that the company raised royalty rates on mineral leases to 30%, according to court documents, while the standard market rate paid to property owners is between 18% and 20%.

“(Occidental) not only discouraged interest, they could block interest with their inner-company leases to each other,” Deselms said. “That made it so expensive that no other independent oil company could work with them.”

“I think it’s a very concerning matter whenever we have corporations that come in and take advantage of people who necessarily can’t fight against them or won’t fight against them,” landowner and plaintiff Ron Rabou said. “It gives them the upper hand.”

Like Deselms, Rabou comes from a family of farmers. His family came to Wyoming in the late 1800s, and they’ve been farming ever since.

Rabou was alerted to Anadarko’s activities when he began receiving applications for permits to drill in the mail, which he had not solicited.

After bringing these permits to his lawyer, Rabou found that he wasn’t the only one in this predicament. He and many others joined this lawsuit, and according to Rabou, that group support was essential to even getting to the point of a settlement.

“We were very fortunate in this regard, with this case, that we had a team of professionals that was willing to stand in the corner of the ring and fight for us,” Rabou said. “... As independent landowners, and as agriculture producers, (most of us) don’t have the ability to just fight a major company that has an endless supply of resources.”

Beyond concerns about violating antitrust laws, many of the plaintiffs had to consider what permits and profits they lost out on during the five-year lawsuit. Many farmers rely on their mineral rights for additional income, which is essential in agriculture, Deselms said.

“That’s what agriculture has to do,” Deselms said. “You get a paycheck once a year. You have to plan for emergencies, you have to plan to get through, you have to plan whether diesel fuel is going to be $2 or $5. ... This bonus payment for people with mineral rights is almost like an extra paycheck that gives you some buffer. And Anadarko cut a lot of us out of that with their internal policies.”

The suit nearly went to trial in August, but instead, the federal court reported notice of a “verbal settlement.”

The settlement agreement of $12 million, paid by Occidental to the class, has not yet been signed by all parties, and still needs to be finalized and sent to all 2,300 members of the class-action lawsuit.

Legal representative for the class, Bob Shuster confirmed Thursday that the $12 million will pay the legal fees incurred during the process and then will be split among the plaintiffs.

Deselms noted that people are rarely completely happy with mediation; the settlement did not cover the losses landowners claimed were suffered due to missed lease opportunities, as she had hoped, and the market has since changed, meaning there are fewer leasing opportunities now.

Even with this being the case, the group hopes that the settlement sets a precedent and will protect future generations as they navigate these mineral rights.

“It’s been a long process,” Deselms said. “I didn’t hold my breath because just the way things go with the legal system isn’t always how you want them to go. I’m glad that our attorneys are taken care of, I wish that the clients had happened to receive more, but it was a cap put on by Anadarko/Occidental, and they weren’t going past it.”

Rabou noted that the lawsuit wasn’t just about getting a check or making a point.

“I don’t think that very many of us are going to get a very large settlement out of this thing,” Rabou said. “But I think that what we can know, ultimately, is that there is satisfaction in putting a coalition of people together for the right reasons to do the right thing, and that that still works in America.”

Rabou said he takes great pride in the work that the plaintiffs and their legal team did to stand up for themselves.

“(The case) is about making sure that free enterprise and the free marketplace is actually continuing to be able to not only survive, but to thrive,” Rabou said. “I think that’s very important in our society. It’s certainly important in our state. I hope it garners enough attention that other companies, before doing something of that nature, might think twice, because our resources, our land and the work that we put into it do matter to us.”

Having proper access to mineral rights is one of the many “tools in a toolbox” that Rabou says landowners have to sustain their businesses.

Rabou works in production agriculture, and like many of the plaintiffs, he continued to run his farm with his family during the legal battle. Moving cows from their summer to winter pastures and maintaining his business didn’t pause or let up as the lawsuit persisted.

“There are no weekends, and there are no holidays for most of us who are in production agriculture,” Rabou said. “We don’t do it because we’re getting rich doing it. We’re doing it because it’s fulfilling to us, and because it’s our contribution to the American economy. It’s our contribution to feeding American families.”

Rabou is of the belief that people joined this lawsuit because they wanted to “stand up and do what is right.”

The court never decided if Occidental was violating antitrust laws, and the settlement and its specific terms have yet to be made public, including whether Occidental has admitted fault.

This story was published on December 27, 2024.