United States District Court, E.D. Oklahoma
JAMES and JUDY GRELLNER, on behalf of themselves and all others similarly situated, Plaintiffs,
DEVON ENERGY CORPORATION and DEVON ENERGY PRODUCTION COMPANY, L.P., Defendants.
A. WHITEUNITED STATES DISTRICT JUDGE
the court is the amended motion of the plaintiffs to remand.
Plaintiffs filed a class action petition (#2-1) in the
District Court of Pittsburg County on October 26, 2016,
bringing “claims against Devon concerning Devon's
actual, knowing and willful underpayment or non-payment of
royalties on natural gas and/or constituents of the gas
stream produced from wells though improper accounting methods
. . . and by failing to account for and pay royalties. . . .
“ (Id. at 1). Defendants filed a notice of
removal (#2) in this court on December 6, 2016. Removal was
based on the Class Action Fairness Act (“CAFA”),
which is codified at 28 U.S.C. §§1332(d) and 1453.
diversity jurisdiction requires complete diversity of the
parties pursuant to 28 U.S.C. §1332(a). CAFA replaces
this requirement with one of “minimal diversity”
as stated in 28 U.S.C. §1332(d)(2)(A). “Under
CAFA, a federal district court has subject matter
jurisdiction ‘over class actions involving  at least
100 members and  over $5 million in controversy when 
minimal diversity is met (between at least one defendant and
one plaintiff-class member).'” Dutcher v.
Matheson, 840 F.3d 1183, 1190 (10th
Cir.2016)(quoting Coffey v. Freeport McMoran Copper &
Gold, 581 F.3d 1240, 1243 (10th
Cir.2009).Although CAFA's language favors federal
jurisdiction over class actions, Congress did not give
federal courts jurisdiction over all class actions,
as CAFA contains certain mandatory and discretionary
exceptions. Mattingly v. Equal Energy, 2011 WL
3320822, *1 (N.D.Okla.2011).
their request, the parties were granted sixty days in which
to conduct jurisdictional discovery (#18). The present
briefing indicates that the only pertinent dispute is the
application of the “discretionary
exception” that “allows a federal court to
decline to exercise jurisdiction over a class action that is
otherwise covered by CAFA based on six enumerated factors.
See 28 U.S.C. §1332(d)(3).” Dutcher
v. Matheson, 840 F.3d 1183, 1194 (10th
Cir.2016). The burden in this regard is on the
plaintiff, as the party seeking remand. Id. at
1190. Plaintiff need not satisfy all factors;
rather, a balancing test should be applied, taking into
consideration the totality of the circumstances.
Mattingly, 2011 WL 3320822 at *2. Each factor will
be addressed in turn.
the first factor, the Fifth Circuit states “the terms
local and national connote whether the interests of justice
would be violated by a state court exercising jurisdiction
over a large number of out-of-state citizens and applying the
laws of other states.” Preston v. Tenet
Healthsystem Memorial Medical Center, Inc., 485 F.3d
804, 822 (5th Cir.2007). In this court's view,
such a concern is not present in the case at bar.
similar cases in Oklahoma, courts have found that the first
factor weighs in favor of remand. “Defendants have
their principal place of business in Oklahoma and are
citizens of Oklahoma; the acts giving rise to Plaintiffs'
claims occurred in Oklahoma; and the subject oil and gas
wells are all located in Oklahoma.” Mattingly,
2011 WL 3320822 at *3. See also Gibson v. Continental
Resources, Inc., 2016 WL 4083652, *2 (Plaintiff alleging
“ordinary state law claims”; “these claims
do not invoke any type of national
argue that the first factor's focus is not necessarily
application of law, but rather the national interest
in the sense of the interests of the national and domestic
oil and gas industry, as well as to royalty owners throughout
the United States. Defendants also aver that other
jurisdictions consider the rulings of Oklahoma courts in
determining their own oil and gas rules and laws. The court
is not persuaded. One court may always “consider”
the ruling of another court, but this does not create a
national interest. The Fifth Circuit, in upholding a remand
regarding a class action arising out of Hurricane Katrina,
observed: “Just because the nation takes interest in
Hurricane Katrina does not mean that the legal claims at
issue in this class action lawsuit qualify as national or
interstate interest.” Preston, 485 F.3d at
822. This factor weighs in plaintiffs' favor.
the second factor, plaintiffs assert they only bring claims
under Oklahoma law, the State where the action was originally
filed. In response, defendants contend the claims are likely
to be governed by the laws of multiple states, not the laws
of Oklahoma only. The court in Mattingly found that
it was “without sufficient information, at this stage
of the proceedings, to conduct a complete choice of law
analysis.” 2011 WL 3320822, *3. Therefore, the court
found the factor was “neutral.” Id.
approach reflects a difficulty in the application of this
factor. A motion to remand will always be presented at an
early stage, and therefore a conflict of law analysis
appearing premature might always result in finding the factor
“neutral.” It would seem the at 5; #23 at 2).
court must make the best determination it can based on the
present record. This court notes, as did the
Mattingly court, that the decision by the Oklahoma
Supreme Court in Weber v. Mobil Oil Co., 243 P.3d 1
(Okla.2010), concludes that Oklahoma law would govern class
members' fraud claims even though some members were
citizens of other states. Id. at 6.
also suggest possible implication of federal law, but not
definitively and only tangentially. One treatise notes that
“[c]ourts have generally held that the second factor .
. . can weigh in favor of remand even if other claims
(including claims under federal statutes or the laws of other
states) are involved in the suit.” Newberg on Class
Actions, §6:21 (5thed)(footnote
omitted). The court finds the second factor also slightly
weighs in favor of the plaintiffs.
the court inquires whether the class action has been pleaded
in a manner that seeks to avoid federal
jurisdiction. Defendants assert that it was, as
demonstrated by the state court petition (1) excluding public
traded companies and their affiliated entities that produce,
gather, process, or market gas and (2) suing only Oklahoma
citizens as defendants, despite the possibility of including
other, diverse defendants. Again, the court is not persuaded.
This factor “evaluates whether the proposed class
encompasses all of the potential class members and claims
that would be expected to be included in the class
action.” Buck v. Metro-Goldwyn-Mayer Studios
Inc., 2014 WL 3510151, *3 (C.D.Cal.2014). If the
plaintiff proposed a natural class - a class that encompasses
all of the people and claims that one would expect to include
in a class action, or, in other words, the class definition
and claims appear to follow a natural pattern, Factor C would
weigh in favor of the federal court remanding the complaint.
Id. The court finds plaintiffs' reply (#23 at
5-8) reflects a “natural pattern” rationale for
the petition. The court finds this factor does not weigh
in favor of maintaining federal jurisdiction. Federal courts
generally gives deference to a plaintiff's forum
selection, absent a demonstration to the contrary.
fourth factor addresses the forum's nexus to class
members, alleged harm, or defendants. Under similar facts,
the Mattingly court said: “This action relates
to interests in real property located in Oklahoma and the
proposed class members all own interests in such Oklahoma
property. The proposed class members therefore have a strong
connection to Oklahoma even if they are not all Oklahoma
residents. Further, Defendants are citizens of Oklahoma, and
the underlying actions giving rise to this suit took place in
Oklahoma. In light of these facts, the Court concludes that a
distinct nexus exists between Oklahoma and the class members,
the alleged harm, and Defendants.” 2011 Wl 3320822, *4.
This court agrees with this analysis as to the case at bar.
disagree with Mattingly, and put forth the
construction that the forum referred to in the statute is not
the State, but the specific County in which the action is
filed. This argument is against the weight of
authority and (if adopted) would appear to make the
factor virtually unworkable, or to almost always find the
factor weigh in favor of federal jurisdiction. The CAFA
analysis involves federalism, the relationship between
federal courts and state courts. This is indicated by
reference in other §1332(d)(3) factors to “other
States.” Thus, any county court in Oklahoma is viewed
as an “Oklahoma state court” for purposes of the
forum analysis. So long as venue is appropriate in
Pittsburg County for the state court petition, which is a
question of state law, the specific county is irrelevant for
present purposes. Again, the court finds this factor weighs
in favor of remand.
fifth factor considers the number of Oklahoma citizens in the
proposed class compared to other states, as well as dispersal
of class members. The chart presented to the court (#21-4)
indicates that the number of Oklahoma citizens is larger than
the number of citizens from any other state by a factor of 4
times. (See also #21 at 8). Defendants do not
dispute these percentages, but argue that “the
expansive disparity in states of residence of ...