Judge rules in favor of Kolbenschlag in SGI’s SLAPP suit

November 30, 2018

Colorado, oil & gas industry

Last June, District Court Judge Steven Schultz (Delta County) dismissed an SG Interests lawsuit against Pete Kolbenschlag. The company filed suit in February 2017, in response to a comment Kolbenschlag posted to an article at the Glenwood Post Independent website in November 2016.

The article was about a BLM decision that had cancelled 25 oil & gas leases in the Thompson Divide area. Houston-based SG Interests owns 18 of those leases. In the article, the company announced it would file a lawsuit based on evidence that it claimed pointed to collusion between the Obama administration and environmental interests to reach a “predetermined political decision.”

Kolbenschlag pointed out in his comment that SG Interests was “actually fined for colluding … to rig bid prices and rip off American taxpayers.”

As Judge Schultz pointed out in his decision in June, Kolbenschlag’s statement was true, citing several press accounts from 2012-13, describing penalties levied against SG Interests totaling $550,000 for antitrust violations.

A month later SGI filed an appeal requesting that Kolbenschlag be ordered to pay the company’s legal costs.

Often referred to as SLAPP suits — Strategic Lawsuits Against Public Participation — libel suits are used by corporations to censor, intimidate, and silence critics by burdening them with the cost of a legal defense until they abandon their activism. In this case SGI clearly intended to intimidate Kolbenschlag.

However this week Judge Schultz upheld his previous ruling calling SGI’s lawsuit “baseless” and “frivolous” and ordered the company to pay Kolbenschlag’s attorney fees

Judge: Retaliation aim of lawsuit

A Delta County judge has doubled down on a previous judgment against an energy firm in its suit against a Paonia activist, declaring that the suit is frivolous and was filed to retaliate against the industry critic.

District Court Judge Steven Schultz issued his latest ruling this week in finding that SG Interests owes Pete Kolbenschlag attorney fees in connection with defending himself from the libel suit brought by the company …

… Kolbenschlag and SG Interests have yet to agree on the amount of reasonable legal fees he should be paid, and SG also has appealed Schultz’s June judgment, so Schultz will confer with the parties Dec. 27 to consider in part whether further action on the fees should await resolution of the appeal.

SG official Robbie Guinn declined to comment on the continuing legal case Thursday.

In an email, Kolbenschlag said he appreciates “that the judge recognized the untoward motivations that appear to lie behind this complaint.” But he said the “vexatious action” by SG Interests is likely to continue well into next year due to the appeal.

“Still, this decision is yet another strong ruling on my way toward what I expect to be final vindication,” he said.

Kolbenschlag posted excerpts from the judge’s ruling on Facebook:

“Contrary to the Plaintiff’s characterization, none of these statements are allegations by the federal government. They are all operative facts established during that case. Moreover, none of them are dependent upon the successful prosecution of the anti-trust claim. They remain facts regardless of whether SGI successfully defended itself in the litigation or not.

“Ultimately, to suggest that an ordinary reader may disregard established facts because the underlying legal claim was not proven at a final trial does a disservice both to the ordinary reader and to undisputed facts in general. It is sophistry dressed up as a legal principle. It may well be that there are individuals out there who will disbelieve anything they hear, especially where the federal government is involved. The Court does not make its decisions based on such outliers. The Court concludes again that any ordinary reader looking at the operative facts set forth in the federal litigation would have a far worse view of SGI then he or she would have after reading the Defendant’s statement that SGI had been “fined” for collusion with GEC.

“… the Court concludes that the Defendant has adequately demonstrated that the plaintiff commenced and prosecuted the libel action for an improper purpose. In part, that conclusion follows from the Court’s finding that the claim was baseless and that SGI was or should have been aware of that fact before it commenced the lawsuit. The Court also believes that SGI continued to prosecute the claim even after its lack of merit became apparent.

“…The Court is particularly troubled by the Plaintiff’s explanation for its different treatment in suing the Defendant for libel while taking no such action against the news organizations, industry professionals and legal commentators who described the settlement of the federal case as including the payment of fines by SGI.

“… The Plaintiff has no further evidence of actual malice on the part of the Defendant here than it would have had against any other party who described the settlement payments the same way. As for the suggestion that the Defendant should be held to a higher standard based on his knowledge of the industry, that same consideration would apply to the numerous industry insiders and legal commentators who allegedly mischaracterized the nature of the underlying payments.

“Ultimately, the only difference the Court sees between the Defendant and all of the other parties who used similar terms to describe the settlement is that the Defendant is a frequent industry critic, who has lobbied against SGI’s operations. Commencing and maintaining a lawsuit as a form of retaliation or to silence a critic is a clear example of vexatious litigation.”

See also —
Judge: Oil company’s libel lawsuit against Paonia environmental activist was ‘a form of retaliation’

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