It’s not exactly a secret that Chesapeake Energy likes its privacy.
Last month, Chesapeake asked the Texas Attorney General’s office to keep the details of its out-of-court settlement with the Fort Worth School District under wraps by arguing that releasing the terms would benefit its competitors, in this instance not a rival firm but other folks suing them.
Chesapeake is getting sued — a lot — in the Barnett Shale and elsewhere for how it paid out royalties to landowners from its natural gas leases. Plaintiffs say they used sham transactions to allow them to subtract post-production costs from their checks.
To continue keeping secret how it has operated in the Barnett Shale, Chesapeake will go into court Monday morning to ask a state district judge to permanently seal more than 30 documents, generally saying they contain confidential financial information and trade secrets. The documents were requested as part of ongoing litigation with Fort Worth attorney Dan McDonald’s law firm, which has filed more than 400 lawsuits against Chesapeake.
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While this may not seem like a lot — and it is considerably less than the more than 300 Chesapeake originally sought to have sealed — attorneys say it is part of an ongoing pattern by the company to hide how it conducted its business in North Texas. By comparison, Total E&P USA, a co-defendant in the lawsuit, has only asked that five documents be sealed.
I can speculate that their reason is that they don’t want people to know what they are doing,
attorney George Parker Young
There is a presumption of openness in Texas courts. The entity or person seeking to tuck the information away must show that there is a specific, serious and substantial interest that outweighs the public’s right to see the information and that it outweighs any adverse effect on public health and safety.
“The theme here is ‘Don’t let the public see these documents,” said attorney George Parker Young, who is working with McDonald. “They claim they are trade secrets. I don’t understand. I can speculate that their reason is that they don’t want people to know what they are doing.”
“It is still a bunch, and looking at those 30 documents, I don’t see anything that is a trade secret,” he said.
Attorney Ralph Duggins, who represents the school district and the city of Fort Worth in its lawsuits against Chesapeake, said the company “has the burden to prove each of the 30 documents are in fact a trade secret.”
“A court record like court proceedings should be presumed to be open to all members of the public,” Duggins said. “Chesapeake has to demonstrate circumstances to circumvent that presumption.”
No surprise here, but Chesapeake is basically silent on the issue, with spokesman Gordon Pennoyer in Oklahoma City declining to comment.