Justia Class Action Opinion Summaries

In this second appeal in a class action case alleging a breach of the implied duty to market gas and underpaid royalties the Supreme Court affirmed the decision of the district court denying a class's motion to amend its petition and granting partial summary judgment for Oil Producers Inc. of Kansas (OPIK) on the class's breach of duty to market gas as it related to the marketable condition rule, holding that there was no error.In the first appeal in this case, the Supreme Court listed the conditions under which a well operator may satisfy its duty to market raw gas production. On remand, the class of royalty owners moved to amend the petition to clarify that its original claim of breach of implied duty to market implicated the implied duty of good faith and fair dealing. The district court denied the motion and granted summary judgment for OPIK. The Supreme Court affirmed, holding (1) the law of the case doctrine precluded thecClass from relitigating its claim that OPIK breached its implied duty of faith and fair dealing as alleged in the motion to amend the petition; (2) the class was not entitled to prejudgment interest; and (3) the lower courts appropriately denied OPIK's statute of limitations defense to the class's conservation fee claim. View "L. Ruth Fawcett Trust v. Oil Producers Inc. of Kansas" on Justia Law

Phelps Gas & Oil brought a class action in Colorado state court against Noble Energy and DCP Midstream for underpayments on oil and gas royalties Noble allegedly owed Phelps and other owners of royalty interests. DCP Midstream removed the class action to federal district court. Phelps then moved to remand the case to state court, arguing the case failed to meet the federal $75,000 amount-in-controversy requirement. The district court denied the motion, and later entered summary judgment, dismissing all of Phelps’s claims. The Tenth Circuit concluded the district court erred in denying Phelps’s motion to remand, thus dismissing the appeal for lack of jurisdiction. "[N]either the value to Phelps nor the cost to either defendant in this case would result in more than $75,000 at controversy. Though the contracts between Noble and DCP are worth millions of dollars, we cannot base federal jurisdiction on potential future litigation involving the defendants." View "Phelps Oil and Gas v. Noble Energy" on Justia Law

Appellee-defendant TEP Rocky Mountain, LLC (“TEP”) operated wells that produced natural gas in Colorado. These wells were subject to various leases or royalty Appellant-intervenors Ivo Lindauer, Sidney Lindauer, Ruther Lindauer, and Diamond Minerals LLC (the “Lindauers” or the “Intervenors”), were the representatives for a class of royalty owners who filed suit in 2006 in Colorado state court, alleging that TEP had underpaid royalties on various leases and royalty agreements. In 2008, TEP and the Lindauer class entered into a settlement agreement (the “Lindauer SA”) purporting to “resolve all class claims relating to past calculation of royalt[ies]” and to “establish certain rules to govern future royalty” payments. The Lindauer SA declared that the state court would retain “continuing jurisdiction” to enforce provisions of the settlement related to “the description of past and future royalty methodologies.” Approximately eight years passed, free of incident. But on July 18, 2017, a subset of the Lindauer class (the “Sefcovic class”) initiated this action against TEP in Colorado state court, alleging that TEP had calculated and paid royalties in a manner inconsistent with the Lindauer SA and contrary to the underlying royalty agreements. TEP removed the case to federal court. Appellants intervened in the district court, seeking to dismiss the action for lack of federal subject matter jurisdiction. Through two separate motions to dismiss, the briefing from both parties "confused the bounds of federal subject matter jurisdiction and conflated that concept with the doctrines of abstention and comity, and with matters of venue and forum." Despite this misdirection, the district court properly exercised jurisdiction and rebuffed appellants’ attempts to unwind nearly eighteen months of class action litigation. After review, the Tenth Circuit concurred with the district court's judgment and affirmed it. View "Elna Sefcovic v. TEP Rocky Mountain" on Justia Law

The Supreme Court affirmed the order of the circuit court granting Plaintiffs' motion for class certification in this action alleging that Defendant, which leased with Plaintiffs to drill and sell hydrocarbons from the leased property, improperly suspended royalty payments, holding that the requirements of numerosity and superiority were met.The complaint alleged that the royalty payments were suspended in an effort by Defendant to recoup improper deductions. Plaintiffs moved for class certification, which the trial court granted. Defendant appealed, arguing that Plaintiffs failed to satisfy the numerosity and superiority requirements. The Supreme Court affirmed, holding that the trial court did not abuse its discretion in determining that the numerosity and superiority requirements were satisfied in this case. View "Stephens Production Co. v. Mainer" on Justia Law

Defendant Chaparral Energy, L.L.C. (Chaparral) operated approximately 2,500 oil and gas wells in Oklahoma. Plaintiffs Naylor Farms, Inc. and Harrel’s, L.L.C. (collectively, Naylor Farms) had royalty interests in some of those wells. According to Naylor Farms, Chaparral systematically underpaid Naylor Farms and other similarly situated royalty owners by improperly deducting from their royalty payments certain gas-treatment costs that Naylor Farms contended Chaparral was required to shoulder under Oklahoma law. Naylor Farms brought a putative class-action lawsuit against Chaparral and moved to certify the class under Rule 23 of the Federal Rules of Civil Procedure. The district court granted Naylor Farms’ motion to certify, and Chaparral appealed the district court’s certification order. After review, the Tenth Circuit concluded Chaparral failed to demonstrate the district court’s decision to certify the class fell outside “the bounds of rationally available choices given the facts and law involved in the matter at hand.” View "Naylor Farms v. Chaparral Energy" on Justia Law

Plaintiff David Speed filed a petition asserting a putative class action against defendant JMA Energy Company, LLC. He alleged that JMA had willfully violated an Oklahoma statute that required payment of interest on delayed payment of revenue from oil and gas production. He further asserted that JMA fraudulently concealed from mineral-interest owners that it owed interest due under the statute, intending to pay only those who requested interest. JMA removed the case to the United States District Court for the Eastern District of Oklahoma, asserting that the district court had jurisdiction under the Class Action Fairness Act (CAFA - 28 U.S.C. 1332(d)). After conducting jurisdictional discovery, Speed filed an amended motion to remand the case to state court. The district court granted this motion, relying on an exception to CAFA that permitted a district court to decline to exercise jurisdiction over a class action meeting certain citizenship prerequisites “in the interests of justice and looking at the totality of the circumstances,” based on its consideration of six enumerated factors. On appeal JMA challenged the district court’s remand order. Because the district court properly considered the statutory factors and did not abuse its discretion by remanding to state court, the Tenth Circuit affirmed. View "Speed v. JMA Energy Company" on Justia Law

After settlement of a class action for royalties from gas wells, the federal district court for the Western District of Oklahoma awarded attorney fees to class counsel and an incentive award to the lead plaintiff to be paid out of the common fund shared by class members. The court rejected claims by two objectors, and they appealed. Finding the district court failed to compute attorney fees under the lodestar method, as required by Oklahoma law in this diversity case, and the incentive award was unsupported by the record, the Tenth Circuit reversed and remanded. View "Chieftain Royalty v. Enervest Energy" on Justia Law

Edward Snow, individually and as putative class representative on behalf of all similarly situated people, filed a complaint against SEECO, Inc. alleging that SEECO had underpaid royalties to plaintiffs, a group of landowners who had entered into natural gas leases with SEECO. Snow subsequently filed a motion for class certification. The circuit court granted Snow’s motion to present a class of Arkansas citizens who entered into lease agreements with SEECO for the production of natural gas on their property in the Fayetteville Shale. SEECO appealed. The Supreme Court affirmed, holding that the circuit court did not abuse its discretion in certifying the class. View "SEECO Inc. v. Snow" on Justia Law

Under the 1887 General Allotment Act and the 1934 Indian Reorganization Act, the U.S. is the trustee of Indian allotment land. A 1996 class action, filed on behalf of 300,000 Native Americans, alleged that the government had mismanaged their Individual Indian Money accounts by failing to account for billions of dollars from leases for oil extractions and logging. The litigation’s 2011 settlement provided for “historical accounting claims,” tied to that mismanagement, and “land administration claims” for individuals that held, on September 30, 2009, an ownership interest in land held in trust or restricted status, claiming breach of trust and fiduciary mismanagement of land, oil, natural gas, mineral, timber, grazing, water and other resources. Members of the land administration class who failed to opt out were deemed to have waived any claims within the scope of the settlement. The Claims Resolution Act of 2010 ratified the settlement and funded it with $3.4 billion, The court provided notice, including of the opt-out right. Challenges to the opt-out and notice provisions were rejected. Indian allotees with interests in the North Dakota Fort Berthold Reservation, located on the Bakken Oil Shale (contiguous deposits of oil and natural gas), cannot lease their oil-and-gas interests unless the Secretary approves the lease as “in the best interest of the Indian owners,” 122 Stat. 620 (1998). In 2013, allotees sued, alleging that, in 2006-2009, a company obtained Fort Berthold allotment leases at below-market rates, then resold them for a profit of $900 million. The Federal Circuit affirmed summary judgment for the government, holding that the allotees had forfeited their claims by failing to opt out of the earlier settlement. View "Two Shields v. United States" on Justia Law

Appellants, property owners and holders of oil and gas leases, filed a class-action complaint against Appellee, the circuit court clerk, alleging that Appellee and two of her deputies falsely and fraudulently notarized oil and gas leases. On remand and following a hearing, the trial court granted summary judgment in favor of Appellee, concluding that Appellants had failed to show any damages as a result of Appellee’s purportedly unlawful act in recording the leases. The Supreme Court affirmed, holding that the grant of summary judgment was not in error, as none of the evidence relied upon by Appellants created a factual question as to whether they sustained damages as a result of the actions alleged in the complaint. View "Lipsey v. Cox" on Justia Law