PPL Electric Utilities Corporation v. Coterra Energy, Inc.

CourtDistrict Court, M.D. Pennsylvania
DecidedFebruary 7, 2026
Docket3:25-cv-00794
StatusUnknown

This text of PPL Electric Utilities Corporation v. Coterra Energy, Inc. (PPL Electric Utilities Corporation v. Coterra Energy, Inc.) 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
PPL Electric Utilities Corporation v. Coterra Energy, Inc., (M.D. Pa. 2026).

Opinion

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF PENNSYLVANIA PPL ELECTRIC UTILITIES CORPORATION, CIVIL ACTION NO. 3:25-CV-794 Plaintiff (MEHALCHICK, J.) v.

COTERRA ENERGY, INC., et al.,

Defendants

MEMORANDUM Presently before the Court are Defendants Coterra Energy Inc. (“Coterra”) and Charles L.E. Wage, Esquire’s (“Wage”) (together, “Defendants”) motions to dismiss for failure to state a claim. (Doc. 5; Doc. 7). On April 9, 2025, Plaintiff PPL Electric Utilities Corporation (“PPL”) initiated this action by filing a complaint in the Court of Common Pleas of Susquehanna County, Pennsylvania. (Doc. 1-2, at 4-14). On May 6, 2025, Coterra removed this action to federal court pursuant to 28 U.S.C. § 1441(a) and 28 U.S.C. § 1332(a). (Doc. 1, ¶¶ 4, 5). For the following reasons, Defendants’ motions to dismiss shall be GRANTED in part and DENIED in part. I. BACKGROUND AND PROCEDURAL HISTORY The following background is taken from the complaint and, for the purposes of the instant motion, is taken as true. (Doc. 1-2, at 4-14). PPL is an electric utilities company that leases real property in Susquehanna County, Pennsylvania to the energy company, Coterra for natural gas well drilling. (Doc. 1-2, ¶¶ 1-5). Coterra is the successor to Cabot Oil & Gas Corporation under the November 12, 2012, Oil and Gas Lease No. 37-17113 (the “Lease”). (Doc. 1-2, ¶¶ 4-5). The Lease has been renewed multiple times and remains in effect. (Doc. 1- 2, ¶ 7). Under the terms of the Lease, Coterra is obligated to pay PPL certain royalties based on the acres leased multiplied by PPL’s royalty factor. (Doc. 1-2, ¶ 10). Paragraph Eleven of the Lease provides that:

In case of any controversy or dispute regarding title to the premises or any part thereof, or regarding the ownership of any sums payable hereunder, Lessee shall have the right to withhold and retain without accrual of interest all sums payable hereunder (which are attributable to the portion or portions of the premises that are the subject of controversy or dispute) and which are subject to such controversy or dispute until the final determination of said controversy or dispute and then to distribute the same among those lawfully entitled thereto. (Doc. 1-2, ¶ 12). In March 2016, Wage represented individuals in a lawsuit disputing PPL’s ownership of a portion of the property leased to Coterra (“Magnotti Matter”). (Doc. 1-2, ¶ 14-15). In May 2019, the Magnotti Matter was discontinued with prejudice. (Doc. 1-2, ¶ 17). As part of the resolution of the Magnotti Matter, PPL executed quitclaim deeds to the plaintiffs in Magnotti Matter for 43.614 total acres of PPL’s property. (Doc. 1-2, ¶ 18). After the discontinuance of the Magnotti Matter, PPL retained 89.029 acres of real estate (“Residual Acreage”) on which Coterra was obligated to pay PPL royalties under the Lease. (Doc. 1-2, ¶ 19). Coterra withheld certain royalty payments from PPL during the pendency of the Magnotti Matter, but when the Magnotti Matter concluded, Coterra released all suspended royalty payments owed under the Lease through August 2018 to PPL. (Doc. 1-2, ¶ 21). Since the discontinuance of the Magnotti Matter, no other person or entity have filed any action disputing the ownership of PPL’s Residual Acreage. (Doc. 1-2, ¶ 22). After the resolution of the Magnotti Matter, Coterra began withholding significant royalty payments from PPL without explanation. (Doc. 1-2, ¶ 25). Coterra made several small payments to PPL under the Lease but have not explained what the payments are for. (Doc. 1-2, ¶ 24). In June 2023, Coterra sent PPL a series of letters stating that Coterra “shall withhold payment pending resolution of a title dispute or adverse claim asserted.” (Doc. 1-2, ¶ 28). In July 2023, Coterra made a single royalty payment to PPL but has not made a royalty payment to PPL

since. (Doc. 1-2, ¶ 30). On August 22, 2023, PPL informed Coterra that there are no title disputes regarding the Residual Acreage and demanded payment of withheld royalties. (Doc. 1-2, ¶ 32). In response, Coterra requested information about the status of the Magnotti Matter, stating that proof of its conclusion “may facilitate a quick resolution for your clients’ concerns.” (Doc. 1- 2, ¶ 33). On August 22, 2023, PPL provided Coterra with a copy of the 2019 discontinuance in the Magnotti Matter, adding that there is no pending title litigation against PPL in Susquehanna County. (Doc. 1-2, ¶ 34). Coterra continues to withhold royalty payments from PPL and earn interest on the withheld royalty payments. (Doc. 1-2, ¶¶ 35-36).

On April 9, 2025, PPL filed a complaint against the Defendants in the Court of Common Pleas of Susquehanna County. (Doc. 1-2, at 4-14). Therein, PPL alleges the following Counts: Count I – Declaratory Judgment under Pa. R.C.P. 1602 against Coterra (Doc. 1-2, ¶¶ 38-44); Count II – Breach of Contract against Coterra1 (Doc. 1-2, ¶¶ 45-53); Count III – Unjust Enrichment against Coterra (Doc. 1-2, ¶¶ 54-57); and Count IV – Tortious Interference with Contractual Relations against Wage (Doc. 1-2, ¶¶ 58-61). On May 5, 2025, Coterra removed the action to federal court. (Doc. 1). On May 12, 2025, Coterra filed a motion to dismiss PPL’s claims for unjust enrichment and breach of

1 PPL’s second count is mislabeled as Count III. (See Doc. 1-2, at 10-11). fiduciary duty, as well as a brief in support. (Doc. 5; Doc. 6). On May 13, 2025, Wage filed a motion to dismiss PPL’s claim of tortious interference with contractual relations, as well as a brief in support. (Doc. 7; Doc. 8). On May 20, 2025, and May 22, 2025, respectively, PPL filed briefs in opposition to Defendants’ motions to dismiss. (Doc. 9; Doc. 10). Coterra filed a reply brief on June 2, 2025, and Wage filed a reply brief on June 4, 2025. (Doc. 12; Doc.

13). Accordingly, the motions to dismiss have been fully briefed and are ripe for disposition. II. MOTION TO DISMISS STANDARDS Rule 12(b)(6) of the Federal Rules of Civil Procedure authorizes a defendant to move to dismiss for “failure to state a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). “Under Rule 12(b)(6), a motion to dismiss may be granted only if, accepting all well- pleaded allegations in the complaint are true and viewing them in the light most favorable to the plaintiff, a court finds the plaintiff’s claims lack facial plausibility.” Warren Gen. Hosp. v. Amgen Inc., 643 F.3d 77, 84 (3d Cir. 2011) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544,

555-56 (2007)). Although a court must accept the factual allegations in a complaint as true, it is not compelled to accept “unsupported conclusions and unwarranted inferences, or a legal conclusion couched as a factual allegation.” Morrow v. Balaski, 719 F.3d 160, 165 (3d Cir. 2013) (quoting Baraka v. McGreevey, 481 F.3d 187, 195 (3d Cir. 2007)). Additionally, a court need not assume that a plaintiff can prove facts that the plaintiff has not alleged. Associated Gen. Contractors of Cal. v. California State Council of Carpenters, 459 U.S. 519, 526 (1983). In Ashcroft v.

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PPL Electric Utilities Corporation v. Coterra Energy, Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/ppl-electric-utilities-corporation-v-coterra-energy-inc-pamd-2026.