United States Court of Appeals Fifth Circuit F I L E D February 18, 2004 In the Charles R. Fulbruge III United States Court of Appeals Clerk for the Fifth Circuit
_______________
m 02-41704 _______________
THE MCMAHON FOUNDATION; J. TOM POYNOR,
Plaintiffs-Appellees,
VERSUS
AMERADA HESS CORPORATION, ET AL.,
Defendants,
CHESAPEAKE EXPLORATION LIMITED PARTNERSHIP,
Movant-Appellant.
*************** _______________
m 03-40099 _______________
ALL PLAINTIFFS,
Plaintiff-Appellee,
ALL DEFENDANTS, LIAISON COUNSEL,
Defendant-Appellee,
***************
2 _______________
m 03-40238 _______________
THE MCMAHON FOUNDATION; J. TOM POYNOR; MARY ALMA POWELL,
OCCIDENTAL PETROLEUM; ET AL.,
3 _________________________
Appeals from the United States District Court for the Southern District of Texas m C-98-CV-048 m C-98-CV-130 MDL m 1206 _________________________
Before JOLLY, SMITH, and DEMOSS, out of a series of lawsuits filed in the Circuit Judges. mid-1990’s against numerous oil producers by oil royalty and interest owners. The plaintiffs JERRY E. SMITH, Circuit Judge:* sued in various state and federal courts, charging the oil producers with the systematic Chesapeake Exploration Limited Partner- underpayment of royalties for oil purchased at ship (“CELP”) appeals the denial of its motion the wellhead. The litigation was consolidated to enforce the terms of a class action in January 1998 by the Judicial Panel on settlement. The district court’s order is but Multi-District Litigation and assigned to the one action taken in its capacity as an ad- Southern District of Texas for further ministrator of the settlement fund. The order proceedings. neither fully resolves the rights and liabilities of all the parties nor fulfills the court’s mandate Thereafter, most of the original defendants to interpret and administer the settlement. It is settled, reaching an agreement that divided the accordingly not a final appealable order, so we parties into four classes: settling plaintiffs, dismiss the appeal. non-settling plaintiffs, settling defendants, and non-settling defendants. Non-settling plaintiffs I. and non-settling defendants are regarded as CELP, a wholly-owned subsidiary of being outside the settlement class and are Chesapeake Energy Corporation (“CE”), neither bound by the terms of the agreement proceeding by way of motion in the Southern nor entitled to file claims under it. In addition, District of Texas, attempts to assert its the agreement excludes “affiliates” of non- putative rights to partake in a settlement from settling defendants, defined as entities in which which it has previously been excluded. The a non-settling defendant possessed a fifty settlement (the “Global Settlement”) arises percent or more ownership interest at any time between January 1, 1986, and September 30, 1998. * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be pub- CE was designated a non-settling lished and is not precedent except under the limited defendant, because it did not contribute circumstances set forth in 5TH CIR. R. 47.5.4.
4 monies to the settlement fund. CE timely the three companies was acquired by CELP objected to this classification and its exclusion before the effective date specified in the Global as a class member. The district court certified Settlement’s definition of “affiliates” of a non- the Global Settlement over these objections,1 settling defendant. As a result, the court and CE timely appealed, then voluntarily concluded, the companies’ claims were exclud- abandoned the appeal.2 Despite entering a ed by the terms of the agreement and could final judgment, the district court retained not be asserted by CELP.4 “continuing jurisdiction over the Settlement Agreement . . . for the purposes of enforcing, II. implementing, administering, construing and With limited exception, this court has jur- interpreting [the] Settlement Agreement.”3 isdiction only over final judgments. See 28 U.S.C. § 1291; Graham v. Johnson, 168 F.3d The present appeal arises out of a motion 762, 774 (5th Cir. 1999). “A ‘final decision’ by CELP asking the district court to order a generally is one which ends the litigation on settlement disbursement in satisfaction of the merits and leaves nothing for the court to claims owned by three of CELP’s newly- ac- do but execute the judgment.” Catlin v. quired subsidiaries: DLB Oil & Gas, Inc. United States, 324 U.S. 229, 233 (1945). (“DLB”), Hugoton Energy Corp. (“Hugo- Where an action involves multiple parties, “a ton”), and Anson Corporation (“Anson”). disposition of the action as to only some of the DLB, Hugoton, and Anson are formerly class- parties does not result in a final appealable or- action plaintiffs who asserted a right to der absent a certification by the district court damages for barrels of oil they sold at under Federal Rule of Civil Procedure 54(b).” artificially deflated prices in the preceding Transit Mgmt., Inc. v. Group Ins. Admin., decade. Inc., 226 F.3d 376, 381 (5th Cir. 2000).
The district court, having previously The district court order is not a final determined that CELP could not assert claims judgment, because it neither resolves the rights on its own behalf because it is a non-settling and liabilities of all the part ies nor concludes defendant, denied CELP’s motion, because it the district court’s role as an administrator of concluded DLB, Hugoton, and Anson are af- the settlement. The parties do not dispute that filiates of a non-settling defendant. Each of the original order certifying the Global
4 1 In re Lease Oil Antitrust Litig. (No. II), 186 The district court misconstrued CELP’s mo- F.R.D. 403 (S.D. Tex. 1999) tion as a Fed. R. Civ. P. 60(b) motion for relief from the judgment on the basis of the court’s belief 2 that CELP sought to be re-designated as a class As a result, the fairness of the settlement is no longer an issue CELP can raise on appeal. member. To the contrary, CELP’s motion asserts a right to collect based on an independent ground 3 See also Kokkonen v. Guardian Life Ins. Co. that was not the subject of the court’s earlier rul- of Am., 511 U.S. 375, 380-81 (1994) (providing ing, namely, by contesting whether DLB, Hugoton, that courts lack inherent jurisdiction to enforce set- and Anson are affiliates of a non-settling defendant tlements that they approve, but may nevertheless barred from collecting in the judgment. As a retain jurisdiction for that purpose at the time of result, we agree with CELP that its motion should settlement). not be analyzed under the standards of rule 60(b).
5 Settlement was a final appealable order, or that tained jurisdiction over the settled case for the CE’s initial appeal of that decision was purpose of “enforcing, implementing, properly initiated. Rather, the question is administering, construing and interpreting” the whether a subsequent order interpreting that settlement. The issuance of an interpretive settlement to determine the rights and order defining CELP’s rights and obligations liabilities of one party is a final appealable under the agreement may be an action that is judgment. On the facts of this case, it is not.
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United States Court of Appeals Fifth Circuit F I L E D February 18, 2004 In the Charles R. Fulbruge III United States Court of Appeals Clerk for the Fifth Circuit
_______________
m 02-41704 _______________
THE MCMAHON FOUNDATION; J. TOM POYNOR,
Plaintiffs-Appellees,
VERSUS
AMERADA HESS CORPORATION, ET AL.,
Defendants,
CHESAPEAKE EXPLORATION LIMITED PARTNERSHIP,
Movant-Appellant.
*************** _______________
m 03-40099 _______________
ALL PLAINTIFFS,
Plaintiff-Appellee,
ALL DEFENDANTS, LIAISON COUNSEL,
Defendant-Appellee,
***************
2 _______________
m 03-40238 _______________
THE MCMAHON FOUNDATION; J. TOM POYNOR; MARY ALMA POWELL,
OCCIDENTAL PETROLEUM; ET AL.,
3 _________________________
Appeals from the United States District Court for the Southern District of Texas m C-98-CV-048 m C-98-CV-130 MDL m 1206 _________________________
Before JOLLY, SMITH, and DEMOSS, out of a series of lawsuits filed in the Circuit Judges. mid-1990’s against numerous oil producers by oil royalty and interest owners. The plaintiffs JERRY E. SMITH, Circuit Judge:* sued in various state and federal courts, charging the oil producers with the systematic Chesapeake Exploration Limited Partner- underpayment of royalties for oil purchased at ship (“CELP”) appeals the denial of its motion the wellhead. The litigation was consolidated to enforce the terms of a class action in January 1998 by the Judicial Panel on settlement. The district court’s order is but Multi-District Litigation and assigned to the one action taken in its capacity as an ad- Southern District of Texas for further ministrator of the settlement fund. The order proceedings. neither fully resolves the rights and liabilities of all the parties nor fulfills the court’s mandate Thereafter, most of the original defendants to interpret and administer the settlement. It is settled, reaching an agreement that divided the accordingly not a final appealable order, so we parties into four classes: settling plaintiffs, dismiss the appeal. non-settling plaintiffs, settling defendants, and non-settling defendants. Non-settling plaintiffs I. and non-settling defendants are regarded as CELP, a wholly-owned subsidiary of being outside the settlement class and are Chesapeake Energy Corporation (“CE”), neither bound by the terms of the agreement proceeding by way of motion in the Southern nor entitled to file claims under it. In addition, District of Texas, attempts to assert its the agreement excludes “affiliates” of non- putative rights to partake in a settlement from settling defendants, defined as entities in which which it has previously been excluded. The a non-settling defendant possessed a fifty settlement (the “Global Settlement”) arises percent or more ownership interest at any time between January 1, 1986, and September 30, 1998. * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be pub- CE was designated a non-settling lished and is not precedent except under the limited defendant, because it did not contribute circumstances set forth in 5TH CIR. R. 47.5.4.
4 monies to the settlement fund. CE timely the three companies was acquired by CELP objected to this classification and its exclusion before the effective date specified in the Global as a class member. The district court certified Settlement’s definition of “affiliates” of a non- the Global Settlement over these objections,1 settling defendant. As a result, the court and CE timely appealed, then voluntarily concluded, the companies’ claims were exclud- abandoned the appeal.2 Despite entering a ed by the terms of the agreement and could final judgment, the district court retained not be asserted by CELP.4 “continuing jurisdiction over the Settlement Agreement . . . for the purposes of enforcing, II. implementing, administering, construing and With limited exception, this court has jur- interpreting [the] Settlement Agreement.”3 isdiction only over final judgments. See 28 U.S.C. § 1291; Graham v. Johnson, 168 F.3d The present appeal arises out of a motion 762, 774 (5th Cir. 1999). “A ‘final decision’ by CELP asking the district court to order a generally is one which ends the litigation on settlement disbursement in satisfaction of the merits and leaves nothing for the court to claims owned by three of CELP’s newly- ac- do but execute the judgment.” Catlin v. quired subsidiaries: DLB Oil & Gas, Inc. United States, 324 U.S. 229, 233 (1945). (“DLB”), Hugoton Energy Corp. (“Hugo- Where an action involves multiple parties, “a ton”), and Anson Corporation (“Anson”). disposition of the action as to only some of the DLB, Hugoton, and Anson are formerly class- parties does not result in a final appealable or- action plaintiffs who asserted a right to der absent a certification by the district court damages for barrels of oil they sold at under Federal Rule of Civil Procedure 54(b).” artificially deflated prices in the preceding Transit Mgmt., Inc. v. Group Ins. Admin., decade. Inc., 226 F.3d 376, 381 (5th Cir. 2000).
The district court, having previously The district court order is not a final determined that CELP could not assert claims judgment, because it neither resolves the rights on its own behalf because it is a non-settling and liabilities of all the part ies nor concludes defendant, denied CELP’s motion, because it the district court’s role as an administrator of concluded DLB, Hugoton, and Anson are af- the settlement. The parties do not dispute that filiates of a non-settling defendant. Each of the original order certifying the Global
4 1 In re Lease Oil Antitrust Litig. (No. II), 186 The district court misconstrued CELP’s mo- F.R.D. 403 (S.D. Tex. 1999) tion as a Fed. R. Civ. P. 60(b) motion for relief from the judgment on the basis of the court’s belief 2 that CELP sought to be re-designated as a class As a result, the fairness of the settlement is no longer an issue CELP can raise on appeal. member. To the contrary, CELP’s motion asserts a right to collect based on an independent ground 3 See also Kokkonen v. Guardian Life Ins. Co. that was not the subject of the court’s earlier rul- of Am., 511 U.S. 375, 380-81 (1994) (providing ing, namely, by contesting whether DLB, Hugoton, that courts lack inherent jurisdiction to enforce set- and Anson are affiliates of a non-settling defendant tlements that they approve, but may nevertheless barred from collecting in the judgment. As a retain jurisdiction for that purpose at the time of result, we agree with CELP that its motion should settlement). not be analyzed under the standards of rule 60(b).
5 Settlement was a final appealable order, or that tained jurisdiction over the settled case for the CE’s initial appeal of that decision was purpose of “enforcing, implementing, properly initiated. Rather, the question is administering, construing and interpreting” the whether a subsequent order interpreting that settlement. The issuance of an interpretive settlement to determine the rights and order defining CELP’s rights and obligations liabilities of one party is a final appealable under the agreement may be an action that is judgment. On the facts of this case, it is not. consistent with this retained grant of jurisdiction, but it is not an action that marks Of singular importance to our conclusion is the termination of the court’s role as an the manner in which CELP initiated the administrator of the settlement. So long as the present dispute. Instead of pursuing a private court retains its residual grant of jurisdiction cause of action between itself and the plan ad- further to enforce, administer, and interpret the ministrator, CELP proceeded by way of settlement agreement, any action it takes in motion in the pre-existing class action case. It this capacity lacks the attribute of finality that did not serve a complaint on a defendant5 or is necessary to make the order immediately seek to have its claims adjudicated under a appealable.6 new docket number. Indeed, under Kokkonen, 511 U.S. at 380-81, for any such lawsuit to be As a result, we DISMISS the appeal for heard in federal court, there would need to be want of jurisdiction and, accordingly, we do an independent jurisdictional basis not found here. As a result, the present action is a continuing part of the original class action, 6 There are several alternative means by which subject to the terms and conditions by which CELP could have brought this claim that would the district court retained the subject matter have lent themselves to a quicker appeal: (1) by jurisdiction necessary to interpret the pursuing an independent claim against the plan’s settlement and issue binding orders thereunder. fiduciaries in state (or with the proper jurisdictional basis, federal) court for breach of contract, thereby asserting its rights to a settlement distribution in a Among the consequences for CELP’s deci- vehicle that presents that singular issue for sion to pursue its claim in this fashion is the adjudication; (2) by accepting its status as a non- subordination of its interests to the larger ac- settling defendant and instituting a new cause of tion pending in the district court, which re- action to prevail on the merits of the underlying antitrust and state tort claims; or (3) having pro- ceeded as it did by way of motion, by asking the district court to determine that there exists no just 5 And indeed, at oral argument, CELP’s attor- reason to delay an appeal of its individual rights ney had difficulty even identifying the defendant. and to certify the issue for appellate review under The motion to enforce the settlement is ostensibly rule 54(b). See FED. R. CIV. P. 54(b); Wither- a claim to require the administrator of the settle- spoon v. White, 111 F.3d 399, 402-03 (5th Cir. ment fund specifically to perform its obligations as 1997). At oral argument, appellees’ counsel stated a fiduciary, but that party, the Garden City Group, their position that at least the second of these was not sued and was not involved in the alternatives remains open to CELP. Alternatively, proceedings before the district court or this court CELP may wait until the district court completes on appeal. Rather, CELP’s actions are being op- its task as an administrator of the fund, and appeal posed by counsel for the settling plaintiff class. the order at that time.
6 not reach the merits of the district court’s con- clusion that CELP may not assert rights on be- half of DLB, Hugoton, and Anson.