Chieftain Royalty Company v. SM Energy Company

CourtDistrict Court, W.D. Oklahoma
DecidedFebruary 24, 2022
Docket5:11-cv-00177
StatusUnknown

This text of Chieftain Royalty Company v. SM Energy Company (Chieftain Royalty Company v. SM Energy Company) is published on Counsel Stack Legal Research, covering District Court, W.D. Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Chieftain Royalty Company v. SM Energy Company, (W.D. Okla. 2022).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF OKLAHOMA

CHIEFTAIN ROYALTY COMPANY, ) on its behalf and as representative of a ) class of similarly situated royalty owners, ) ) Plaintiff, ) ) v. ) Case No. CIV-11-177-D ) ENERVEST ENERGY INSTITUTIONAL ) FUND XIII-A, L.P, et al., ) ) Defendants, ) ) and ) ) CHARLES DAVID NUTLEY, et al., ) ) Objectors. )

ORDER

Before the Court are two motions filed by Objector Charles David Nutley: 1) Motion to Exclude or Strike Billing Records Submitted by Class Counsel in Support of Class Counsel’s Renewed Motion for Approval of Attorneys’ Fees [Doc. No. 323]; and 2) Motion to Exclude or Strike Certain Declarations in Support of Class Counsel’s Renewed Motion for Approval of Attorneys’ Fees and Class Representative’s Renewed Motion for Approval of Case Contribution Award [Doc. No. 324]. Motion #1 is directed at a filing of attorney time records [Doc. No. 320], and Motion #2 is directed at declarations of Plaintiff’s attorneys [Doc. Nos. 302-1, 302-2 and 302-5] and legal experts [Doc. Nos. 291 through 300].1 Plaintiff has responded [Doc. Nos. 329 and 330], and Objector Nutley has replied [Doc. Nos. 331 and 332]. Thus, the Motions are fully briefed and ripe for decision.2

Factual and Procedural Background The procedural history of this case informs the issues raised by the Motions. The case was resolved by the settlement of claims for underpayment of oil and gas royalties by a certified class of royalty owners, represented by Plaintiff Chieftain Royalty Company. The settlement involved five defendants, EnerVest Energy Institutional Fund XIII-A, L.P.,

EnerVest Energy Institutional Fund XIII-WIB, L.P., EnerVest Energy Institutional Fund XIII-WIC, L.P., EnerVest Operating, L.L.C., and FourPoint Energy, LLC. Objectors Charles David Nutley and Danny George took unsuccessful appeals from the Order and Judgment Granting Final Approval of Class Action Settlement, which was affirmed. See Chieftain Royalty Co. v. EnerVest Energy Inst. Fund XIII-A, L.P., 888 F.3d 455, 470 (10th

Cir. 2017) (amended Apr. 11, 2018); cert. denied, 139 S. Ct. 482 (2018). Objectors prevailed, however, in appeals from the Order Awarding Attorneys’ Fees, Reimbursement of Litigation Expenses and Case Contribution Award [Doc. No. 156]. The Tenth Circuit

1 Motion #2 concludes with a request to strike other declarations of individuals who are not attorneys or legal experts [Doc. Nos. 302-11 through 302-15]. See Mot. Exclude or Strike Certain Decls. at 18. Because these declarations are not addressed in the supporting brief, this request is disregarded.

2 The Court finds that the briefing attorneys, particularly Plaintiff’s counsel, have made only a modest effort to comply with the Court’s prior instruction to temper the strident tone of their briefs. See 9/20/18 Order [Doc. No. 315] at 1 n.1. The Court disregards all arguments that accuse opposing counsel of stupidity, absurdity, or impropriety. reversed the awards of attorney fees to class counsel and compensation to Plaintiff as the class representative, commonly known as an incentive award, and remanded the case for a

redetermination of these awards. Id. Significantly, the court of appeals determined that the attorney fee and incentive awards are governed by Oklahoma law, both as to whether to make an award from the common fund and how to calculate an amount. See id. at 462 (attorney fees), 468-69 (incentive award). In so doing, the Tenth Circuit opined about unsettled Oklahoma law. See id. at 468 (“Our task then is to make an informed prediction of what the State’s highest

court would do.”). The court of appeals determined that a percentage-of-the-common- fund method cannot be used to determine either award, that the lodestar method must be used to determine a reasonable attorney fee, and that an incentive award should represent “payment at a reasonable rate for reasonable time expended on services rendered that were helpful to the litigation.” Id. After receipt of the mandate, Plaintiff and class counsel

filed new motions asking the Court to award them the same amounts previously awarded under the rules announced by the Tenth Circuit. See Class Counsel’s Renewed Mot. Approval of Attys’ Fees [Doc. No. 302]; Class Representative’s Renewed Mot. Approval Contrib. Award [Doc. No. 304]. However, the Oklahoma Supreme Court later decided in Strack v. Continental

Resources, Inc., 2021 OK 21, 2021 WL 1540516 (Okla. Apr. 20, 2021) (to be published), the same issues decided by the Tenth Circuit in this case. Strack was also a class action involving a settlement of claims alleging underpayment of royalties that generated a common fund. The supreme court held that the attorney fee award was governed by Oklahoma’s class action statute, Okla. Stat. tit. 12, § 2023(G), and “the plain language of [this] statute allows for the calculation of attorney’s fees under both the percentage and

lodestar methods.” Strack, 2021 OK 21, ¶ 16, 2021 WL 1540516 at *4. The Oklahoma Supreme Court also addressed incentive awards for the first time. See id., 2021 OK 21, ¶ 33, 2021 WL 1540516 at *8. The court determined that incentive awards “are justified as payment for reasonable services rendered by class representatives on behalf of the class that were helpful to the litigation” and provided instructions for calculating the award “similar to the lodestar method.” Id., 2021 OK 21, ¶¶ 33-34, 2021 WL 1540516 at *8-9.

Under these circumstances, this Court’s determination of reasonable attorney-fee and incentive awards must be guided by Strack, which is an intervening decision of Oklahoma’s highest court that has resolved the state law issues presented and binds federal courts applying Oklahoma law. See Kokins v. Teleflex, Inc., 621 F.3d 1290, 1295 (10th Cir. 2010); Ute Indian Tribe v. Utah, 114 F.3d 1513, 1521 (10th Cir. 1997) (discussing

intervening-change-in-law exception to mandate rule); see also Padilla-Caldera v. Holder, 637 F.3d 1140, 1145 (10th Cir. 2011). This Court is not bound by any part of the Tenth Circuit’s opinion regarding Oklahoma law that is inconsistent with Strack. Objector’s Motions Motion #1 challenges the time records that were compiled by class counsel and

submitted after remand in support of their renewed motion to determine an appropriate award of attorney fees from the settlement fund. Motion #2 asks the Court to disregard numerous declarations presented in support of both the renewed motions for attorney-fee and incentive awards. Objector Nutley challenges on several grounds the declarations of 1) two of Plaintiff’s attorneys; 2) numerous retained legal experts, including practicing attorneys, retired or former judges, and legal scholars; and 3) a former state senator.

Objector Danny George asserts a similar challenge to the declarations of Plaintiff’s legal experts in his brief opposing the renewed motions; he urges the Court to disregard certain declarations “as improper testimony on what the law is.” See George’s Resp. Br. [Doc. No. 321] at 8, 10, 14. Because there are overlapping arguments, the Court addresses both Motions, as well as George’s arguments, in a single order. The Court must dispose of these procedural challenges before it can decide the substantive issues of the amounts of

fees to be awarded.

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Chieftain Royalty Company v. SM Energy Company, Counsel Stack Legal Research, https://law.counselstack.com/opinion/chieftain-royalty-company-v-sm-energy-company-okwd-2022.