The shareholders of Chesapeake Energy are suing the corporation for damages and/or personal injury due to the corporation’s negligence in allowing unprofitable conduct to go on for years. The shareholders’ lawsuit demands that the corporation be held liable for injuries caused by Duke Energy’s top executives. Specifically, the shareholders claim that; “Duke Energy has directly and indirectly allowed its directors and employees to engage in and approve predatory pricing practices that have caused plaintiffs’ and other low-income individuals to suffer injuries and losses that they would have been able to prevent had Duke Energy never permitted such activity.” Essentially, the suit claims that the company knew or should have known that it was harming its clients through predatory pricing and unprofitable policies. Additionally, the complaint claims that Duke Energy has only one purpose in life: “to profitably drill and mine massive quantities of natural gas.” Further, the complaint claims, “The harm that has been and will be inflicted on residents of Prince Dominion and Orange County will not be adequately compensated with the proceeds of this lawsuit.”
The shareholders’ lawsuit is one in a series of efforts to hold responsible top executives for the actions of their corporations. Similar lawsuits have been filed against several other prominent corporations, including Enron and BP (BP Capital). Last week, the shareholders of Caterpillar Inc., filed a class-action lawsuit in the Federal District of Columbia, claiming that the company’s top executives knew about the poor safety record of its products long before they caused an explosion that killed six people and injured another dozen. In that case, the plaintiffs are seeking compensatory and punitive damages. Both cases are currently pending.
The legal basis of both these lawsuits and others like them, rests on a theory of negligence. Simply put, negligence claims arise when a business, organization, or an individual employee does something wrong, and causes harm or injury to another party. These claims are often based on the fact that a corporation failed to conduct business in a reasonably safe manner. This claim may be based on something as simple as a salesperson thinking they were being polite when they indicated that a product was dangerous or as outrageous as ordering raw shrimp from a shrimp distributor without double-checking that the product contained scalloped shells. In either case, the defense that can be asserted is that the conduct did not cause harm and the other party’s loss was completely avoidable.
The Chesapeake Energy lawsuit is based on a claim that the top executives of the energy company did not take reasonable steps to ensure that their company’s pipeline was not contaminated with dangerous levels of mercury and other chemicals. Among the plaintiffs’ main claims is that the defendants “EREBO” (Employee Retirement Income Benefits Plan) systematically understated the level of mercury it contained on oil and gas leases. Another is that the defendants failed to compensate properly for the health and death costs that resulted from the employees’ exposure to the contaminated oil. Also, one of the main plaintiffs stated in their lawsuit that the defendants “created and continue to maintain an environment that is absolutely full of danger.” The claim also claims that the defendants “fail to take reasonable steps to protect the employees from foreseeable or unavoidable accidents that could cause harm,” leading to the plaintiffs’ injuries.
Both the plaintiffs’ claims and the defense’s claims are based on the claim that the defendants did not perform a reasonable analysis or maintenance of risk before issuing their leases. A pre-existing condition is a controversial issue in the oil and gas industry, as well as in life insurance and other industries. Many courts have ruled that plaintiffs cannot sue companies based on a pre-existing condition, unless that condition is “a foreseeable and direct result” of their own conduct. For this reason, Chesapeake Energy has often settled lawsuits without going to trial.
If you have been or are currently suffering through any kind of lawsuit, you should know that there is legal help available. There are many lawyers who specialize in personal injury and malpractice law. If you have sustained an injury due to the negligence or wrongdoing of the company you work for, it is in your best interest to consult with an attorney who specializes in these types of cases. These lawyers will assess your case and discuss your options, and will make sure that your claim is not compromised by the threat of a lawsuit. They will fight for you and your right to a fair settlement.