Chesapeake Appalachia, L.L.C. v. Scout Petroleum, LLC

73 F. Supp. 3d 488, 2014 U.S. Dist. LEXIS 175168, 2014 WL 7335045
CourtDistrict Court, M.D. Pennsylvania
DecidedDecember 19, 2014
DocketNo. 4:14-CV-0620
StatusPublished
Cited by29 cases

This text of 73 F. Supp. 3d 488 (Chesapeake Appalachia, L.L.C. v. Scout Petroleum, LLC) is published on Counsel Stack Legal Research, covering District Court, M.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Chesapeake Appalachia, L.L.C. v. Scout Petroleum, LLC, 73 F. Supp. 3d 488, 2014 U.S. Dist. LEXIS 175168, 2014 WL 7335045 (M.D. Pa. 2014).

Opinion

MEMORANDUM

MATTHEW W. BRANN, District Judge.

I. BACKGROUND:

The principal basis upon which a court may support its reasoning for granting a motion for reconsideration is an intervening change in the controlling law. In this case, Defendants ask the Court do the opposite and reconsider the undersigned’s application of a recent change in the controlling law, and, instead, revert to the former state of the law. The Court cannot ignore the current state of the law in this federal circuit. The motion will be denied.

Procedural History:

Plaintiff, Chesapeake Appalachia, LLC, hereinafter “Chesapeake,” commenced the instant civil action on April 1, 2014, against defendants, Scout Petroleum, LLC and Scout Petroleum II, LP (hereinafter, collectively, “Scout”). The two-count complaint was filed after Scout had initiated arbitration proceedings against Chesapeake with the American Arbitration Association (hereinafter “AAA”). Count I is a demand for a declaratory judgment requesting that the court decide whether the court or the arbitrator is tasked to interpret the contract, commonly referred to as the “who decides” question. Count II is a demand for a declaratory judgment contending that the contract does not permit class arbitration, commonly referred to as the “clause construction” question.

On April 4, 2014, three days after the complaint was filed, Chesapeake filed a Motion for Summary Judgment on Count I of the complaint, requesting that this Court enter an Order directing that it is the Court who answers the “who decides” question. On April 29, 2014, Scout filed a Motion to Dismiss requesting, alternatively, that the Court enter an Order holding that an arbitration panel from the American Arbitration Association decide this “who decides” question.

Subsequently, on June 4, 2014, the parties contacted. the Court and requested expedited handling of the respective motions. On June 10, 2014, the Court held a telephone conference call with counsel for the parties at the conclusion of which the Court agreed to a reasonably rapid resolution of the pending motions. Accordingly, the Court put to the side other motions on a very full civil docket and commenced the research necessary to resolve the question at hand.

As it happens, the “who decides” issue is an unsettled area of law in the class arbi-trability arena. The United States Court of Appeals for the Third Circuit had, prior to July 30, 2014, indicated that the arbitrator should decide such a question, although it was clear that the United States Supreme Court was incrementally shifting its thinking in the direction of concluding that courts, rather than arbitrators, should decide this threshold question. This Court had a finalized Memorandum Opinion and Order, which detailed its approach to this unsettled area of law, ready to docket in early August 2014.

On July 30, 2014, however, the Third Circuit issued a decision that altered the state of the law in this circuit. See Opalinski v. Robert Half Int’l Inc., 761 F.3d 326 (3d Cir.2014). The Third Circuit has now held that, in the absence of clear and unmistakable evidence to the contrary, the district courts decide the “who decides” issue.

Following the Third Circuit’s seminal decision in Opalinski, this Court began to draft a new, now revised, Memorandum Opinion and Order on the “who decides” [491]*491issue. During this time, however, the parties, without either contacting the Court or waiting for the Court to act, proceeded before an arbitration panel on the questions of both who decides as well as the question of arbitrability. The arbitration panel decided that it, not this Court, decides the “who decides” question, and went on to decide the “clause construction” question by determining that the contract permitted class arbitration. On October 14, 2014, Scout notified the Court that the AAA arbitration panel had entered this decision.

In response, also docketed October 14, 2014, Chesapeake filed two further motions — a Motion to Vacate, ECF No. 44, and a Motion to Stay/Expedite, ECF No. 46. By Order dated October 16, 2014, 2014 WL 5370683, the Court summarily Ordered that Plaintiffs Motions for Summary Judgment and to Vacate the Arbitration Panel Award be granted and Defendants’ Motion to Dismiss be denied citing to the controlling precedent generated three months before in Opalinski

On October 30, 2014 Scout filed a Motion for Reconsideration. ECF No. 50. This motion has now been fully briefed. Subsequently, on December 5, 2014, Scout filed an unexpected Motion to Vacate and for Recusal. ECF No. 55. Following oral argument conducted on December 10, 2014, the matter is now ripe for disposition. For the reasons that follow, the Defendants’ motions will be denied.

II. DISCUSSION:

A. Motion for Reconsideration Standard

“The purpose of a motion for reconsideration is to correct manifest errors of law or fact or to present newly discovered evidence.” Harsco v. Zlotnicki, 779 F.2d 906, 909 (3d Cir.1985). A court should grant a motion for reconsideration if the party seeking reconsideration shows: “(1) an intervening change in the controlling law; (2) the availability of new evidence that was not available when the court granted the motion for summary judgment; or (3) the need to correct a clear error of law or fact or to prevent manifest injustice.” Max’s Seafood Café ex rel. Lour-Ann, Inc. v. Quinteros, 176 F.3d 669, 677 (3d Cir.1999).

“A motion for reconsideration is not properly grounded on a request that the Court simply rethink a decision it has already made.” Douris v. Schweiker, 229 F.Supp.2d 391, 408 (E.D.Pa.2002). In such a motion, “parties are not free to relitigate issues that the Court has already decided.” United States v. Jasin, 292 F.Supp.2d 670, 676 (E.D.Pa.2003) (internal citation and quotations omitted). “The standard for granting a motion for reconsideration is a stringent one.... [A] mere disagreement with the court does not translate into a clear error of law.” Mpala v. Smith, CIV. 3:CV-06-841, 2007 WL 136750, *2 (M.D.Pa. Jan. 16, 2007) (Kosik, J.) aff'd, 241 Fed.Appx. 3 (3d Cir.2007). “Because federal courts have a strong interest in the finality of judgments, motions for reconsideration should be granted sparingly.” Cont’l Cas. Co. v. Diversified Indus., Inc., 884 F.Supp. 937, 943 (E.D.Pa.1995).

B. Allegations in the Complaint

As noted above, Plaintiff, Chesapeake Appalachia, L.L.C. (hereinafter “Chesapeake”), filed a complaint in the Middle District of Pennsylvania on April 1, 2014. ECF No. 1. The complaint is for declaratory and injunctive relief against Defendants, Scout Petroleum L.L.C. and Scout Petroleum II, L.P. (hereinafter, collectively, “Scout”).

In 2008, Chesapeake entered into various Paid-Up Oil & Gas Leases with landowners in several northeastern Pennsylvania counties to explore for, and produce [492]*492natural gas from, the landowners property. The leases at issue are typical natural gas leases, in which there is a basic boilerplate form contract, often together with an individually negotiated addendum. In 2013, Scout purchased the right to some of the leases from certain landowners and has been receiving royalties from Chesapeake on the gas produced by Chesapeake.

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73 F. Supp. 3d 488, 2014 U.S. Dist. LEXIS 175168, 2014 WL 7335045, Counsel Stack Legal Research, https://law.counselstack.com/opinion/chesapeake-appalachia-llc-v-scout-petroleum-llc-pamd-2014.