A Split Panel and a Forceful Dissent
In a partial dissent, U.S. Circuit Judge Nancy L. Moritz pushed back sharply, arguing that Congress left a door open that the majority refused to walk through. She pointed to the Energy Litigation Reform Act, which, she said, “specifically authorizes punitive awards against defendants that willfully withhold proceeds.”
Judge Moritz: Punitive Awards Should Still Be Considered
Judge Moritz agreed that the district court properly found Sunoco intended to withhold interest — not the principal proceeds themselves — making punitive damages unavailable under the particular facts. Still, she insisted the lower court should reconsider punitive liability under the correct statutory framework.
“So I join the majority in vacating the $75 million punitive award,” she wrote, “but I would remand for reevaluation under the ELRA standard.”
How the Dispute Took Shape
The case dates back to a 2020 ruling by U.S. District Judge John A. Gibney Jr., who found Sunoco had systematically shorted royalty owners by failing to automatically pay interest on late royalty disbursements. The practice, the court said, was not a clerical misstep but a deliberate policy to avoid additional costs unless landowners specifically requested them.
Judge Gibney ordered Sunoco to pay more than $80 million in compensatory damages and $75 million in punitive damages, calling the company’s conduct “reprehensible.”
