CHEYENNE – Carrie Deselms’ family has lived in Wyoming for generations, ever since her great-grandparents emigrated from Sweden to a farm in the West.
Like many farmers in eastern Wyoming, Deselms now runs her ranch 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 parcel of land acquired by her ancestors after the Wyoming landholdings were split to finance the railroad.
Deselms inherited the mineral rights about a decade ago, and almost immediately she was made aware of 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 who informed her that he was going to ‘stake’ her property for drilling later in the week. It was this call that led to a five-year antitrust, class-action lawsuit that was settled for $12 million in August, the same day the case was set to go to trial.
Other Wyoming landowners joined Deselms and filed the lawsuit in November 2019. The complaint accused the extraction company of anticompetitive permit hoarding, effectively controlling local oil and gas development.
The group alleged that Anadarko did this by collecting drilling permits without the intention of using them, limiting competitors’ access to certain areas. The lawsuit additionally alleged that the company increased 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 rates, they were also able to lock in interest rates with their internal lease agreements 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 thing when there are companies that are taking advantage of people who necessarily can’t fight them or don’t want to fight them,” said landowner and prosecutor Ron Rabou. “It gives them the upper hand.”
Like Deselms, Rabou comes from a farming family. His family came to Wyoming in the late 19th century and have been engaged in farming ever since.
Rabou was made aware of Anadarko’s activities when he received applications for drilling permits in the mail, which he had not requested.
After presenting these permits to his lawyer, Rabou discovered that he was not the only one in this predicament. He and many others joined this lawsuit and, according to Rabou, that group support was essential to even reach a settlement.
“In this regard, we were fortunate in this case that we had a team of professionals who were willing to stand in the corner of the ring and fight for us,” said Rabou. “… As independent landowners and as agricultural producers, (most of us) do not have the ability to simply fight against a large corporation that has an endless supply of raw materials.”
In addition to concerns about violating antitrust laws, many of the plaintiffs also had to consider the licenses and profits they lost 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 needs to do,” Deselms said. “You get a salary once a year. You have to plan for emergencies, you have to plan to get through them, you have to plan whether diesel is going to cost $2 or $5. … This bonus payment for people with mineral rights is almost an extra salary that gives you some buffer. And Anadarko has kept many of us out of that with their internal policies.”
The lawsuit almost went to trial in August, but instead the federal court reported an “oral settlement.” The $12 million settlement agreement paid by Occidental to the group has not yet been signed by all parties and has yet to be finalized and sent to all 2,300 members of the class action lawsuit.
Class legal representative Bob Shuster confirmed Thursday that the $12 million will pay legal fees incurred during the trial and then be distributed among the plaintiffs.
Deselms noted that people are rarely completely satisfied with mediation; the settlement did not cover the losses landowners claimed to have suffered from lost lease opportunities, as she had hoped, and the market has changed since then, meaning there are now fewer lease options.
Even if this is the case, the group hopes the settlement will set a precedent and protect future generations as they navigate these mineral rights.
“It’s been a long process,” Deselms said. “I wasn’t holding my breath because the way things go in the justice system is not always how you want them to go. I am happy that our lawyers are being well taken care of. I wish the clients had received more, but it was a limit set up by Anadarko/Occidental and they didn’t go past it.”
Rabou noted that the lawsuit wasn’t just about getting a check or making a point.
“I don’t think many of us will get a very large settlement out of this case,” Rabou said. “But I think what we can ultimately know is that there is satisfaction in bringing a coalition of people together for the right reasons to do the right thing, and that that still works in America.”
Rabou said he is very proud of the work the plaintiffs and their legal team have done to stand up for themselves.
“(The case) is about ensuring that free enterprise and the free market actually remain able to not only survive, but thrive,” Rabou said. “I think that is very important in our society. It’s certainly important in our state. I hope it gets enough attention that other companies will think twice before doing something like that, because our resources, our land and the work we put into it are indeed important to us.”
Having good access to mineral rights is one of many “tools in a toolbox” that landowners must have to maintain their businesses, according to Rabou.
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 did not stop or cease as the lawsuit continued.
“There are no weekends and there are no holidays for most of us who work in production agriculture,” Rabou said. “We don’t do it because it makes us rich. We do it because it gives us satisfaction, and because it is our contribution to the American economy. It is our contribution to feeding American families.”
Rabou believes that people joined this lawsuit because they wanted to “stand up and do what is right.”
The court never decided whether Occidental violated antitrust laws, and the settlement and its specific terms have yet to be made public, including whether Occidental admitted guilt.
