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Class action judge orders lawyer to stop recruiting opt-out plaintiffs in oil royalty suit

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An Oklahoma judge overseeing a class action against Chesapeake Energy has ordered a Texas lawyer to stop encouraging class members to opt out of a proposed settlement.

Judge Jon Parsley of Beaver County issued a temporary restraining order barring the recruitment by the law firm of Fort Worth lawyer Dan McDonald, report the Fort Worth Star-Telegram and the Oklahoman. Parsley scheduled a hearing for Monday to decide whether to extend the restraining order.

The class-action suit claims Chesapeake Energy is underpaying oil and gas royalties. Chesapeake has agreed to settle for $119 million; up to 40 percent of the amount would go to attorney fees. The settlement notice, however, has not yet been sent to class members.

McDonald says he believes the proposed settlement is unfair. His firm used mass mailings, billboards, meetings, a RoyaltyRipoff website and newspaper placements that warn the proposed settlement pays only “pennies on the dollar.”

“I ain’t rolling over. I’m fighting,” McDonald told the Star-Telegram. “This settlement stinks.”

According to the Star-Telegram, McDonald has recruited thousands of clients suing Chesapeake Energy, and his suits are starting to “clog the courts” in Texas.

Lawyers who sought the restraining order argued that McDonald’s campaign causes “unnecessary and costly” confusion.