LISBON  A federal judge has sent a royalty payment lawsuit against one of America’s largest oil and gas producers back to Columbiana County Common Pleas Court.

The lawsuit, filed by property owners Brown Valley Farm, LLC, and Brown Family Real Estate Partnership, alleges that Encino Energy and its subsidiaries, EAP Ohio, LLC, and EAP Operating, LLC, have improperly deducted "post-production" costs from their oil and gas royalty payments.

The Texas-based companies had moved the case from Columbiana County to the federal court in Youngstown. Encino then filed a motion to dismiss the lawsuit, arguing that the plaintiffs failed to follow a specific notice clause in their leases, which required the property owners to provide a 60-day notice of any alleged breaches before filing a lawsuit.

The defendants also argued that the plaintiffs' claim to hold Encino Energy responsible for its subsidiaries' actions was not properly supported.

In his order remanding the case, U.S. District Court Judge David Ruiz referenced a similar case, noting that a corporation seeking to move a lawsuit to federal court must prove the citizenship of all its members to establish jurisdiction.

Judge Ruiz stated that the defendants' "inability to identify Encino’s members does not trump the requirements of federal jurisdiction." If even one member of Encino is an Ohio citizen, it would destroy the complete diversity needed for the case to be heard in federal court.

The lawsuit seeks over $25,000 in damages, along with a demand for a full accounting of the royalties and a court order to halt the deductions.

The case now goes back to Columbiana County Common Pleas Court, where a jury trial had previously been requested.