This is an update to a post from last month regarding the Supreme Court of Appeals of West Virginia’s decision in Schrader, Byrd & Companion, P.L.L.C. v. Marks, 2007 WL 1039070 (W.Va.), which upheld the application of a contingency fee contract to royalty payments due the client under a coal lease, even though the amount of the payments, and thus the fees, and the duration of the payments are unknown.

    Christopher Riley (my law school classmate), whose firm has represented the plaintiffs, asked the Supreme Court of Appeals on May 7 to rehear the case.  As I will explain, Chris is in a somewhat unenviable position. 

    Chris replaces John Preston Bailey, who represented the plaintiffs in the Circuit Court of Ohio County, West Virginia and the Supreme Court of Appeals.  But earlier this year, Bailey was sworn in a federal district judge for the Northern District of West Virginia at Wheeling. 

    Chris’ argument for rehearing is that Bailey neglected to identify evidence that would support judgment in favor of their clients, such as an estimate of how much coal remains to be mined.  The amount of coal is the basis for computing the clients’ royalty payments and the 30% contingency fee payments.  He estimates that there are slightly more than 4.5 million tons of coal to be mined.   He also argues that his clients are entitled to a credit of $13,000 for hourly fees they paid the Schrader firm before the fee arrangement was converted to a contingency.

    In its decision, the Supreme Court noted that the plaintiffs did not attempt to quantify the amount of coal that remained.  The predicament is that the plaintiffs could now be arguing (to their lawyers) that if the amount had been disclosed, the Court may have ruled differently, which is the reason the petition for rehearing is being presented.

    The Supreme Court grants petitions for rehearing very rarely, which is probably appropriate.  By the time the Court hears an appeal on its merits, the case has been thoroughly briefed.  But more importantly, it doesn’t appear that any of the evidence that Chris has cited in support of a rehearing was not available at the time of the appeal earlier this year.  It may not have been introduced as evidence before the Circuit Court or otherwise been part of the record, but that doesn’t mean that it can serve as the basis for a petition for rehearing.