United States District Court, E.D. Oklahoma
A. White United States District Judge
the court is Plaintiff's amended motion to remand [Docket
No. 21]. Plaintiff filed a class action petition against JMA
Energy Company, LLC (hereinafter “JMA”) in the
District Court of Hughes County on November 18, 2016,
bringing claims based on JMA's alleged willful and
ongoing violations of Oklahoma law related to payment of oil
and gas production proceeds to well owners. Docket No. 2-1.
JMA filed a notice of removal on January 4, 2017. Removal was
based on the Class Action Fairness Act (“CAFA”),
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, No. 10-CV-565-TCK-PJC,
2011 WL 3320822, *1 (N.D. Okla. Aug. 1, 2011) (quoting
Coffee, 581 F.3d at 1262).
only dispute before the court 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.” Dutcher, 840 F.3d at 1194 (citing
28 U.S.C. §1332(d)(3)). The burden in this regard is on
the plaintiff, as the party seeking remand. Id. at
1190. To qualify for consideration of these factors,
Plaintiff must establish two prerequisites: (1) greater than
one-third but less than two-thirds of the members of the
proposed class are citizens of Oklahoma and (2) the primary
defendants, are citizens of Oklahoma. Id. at 1194.
The parties have stipulated to the first of these
prerequisites. Docket No. 21-1. As to the second, JMA, the
only defendant, is a citizen of Oklahoma. Once those
prerequisites are satisfied, as they are here, Plaintiff need
not satisfy all six factors of section 1332(d)(3); rather,
“a balancing test should be applied, taking into
consideration the ‘totality of the
circumstances.'” Mattingly, 2011 WL
3320822 at *2. The court will address each factor in
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 Med. Ctr., 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.
case similar to the one now before the court where the
defendants were citizens of Oklahoma and had their principal
place of business in Oklahoma, the acts giving rise to the
plaintiffs' claims occurred in Oklahoma, and the subject
oil and gas wells were all located in Oklahoma, the court
found that the first factor weighed in favor of remand.
Mattingly, 2011 WL 3320822 at *3. See also
Gibson v. Continental Resources, Inc., No. CIV-15-611-M,
2016 WL 4083652, at *2 (W.D. Okla. Jan. 28, 2016) (finding
the alleged “ordinary state law claims” did not
“invoke any type of national interest.”). Here,
all of the subject oil and gas wells are located in Oklahoma,
all class members own interests in the subject Oklahoma
wells, Plaintiff is an Oklahoma citizen (along with 48.46% of
the class), JMA is an Oklahoma citizen with its principal
place of business in Oklahoma, the business activities that
gave rise to this case occurred in Oklahoma, and the claims
are based upon Oklahoma law. Docket No. 21, at 4; Docket No.
23, at 2.
argues 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. JMA also argues 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 Plaintiff's favor.
the second factor, Plaintiff asserts he only bring claims
under Oklahoma law, the State where the action was originally
filed. In response, JMA contends 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.” Mattingly, 2011 WL 3320822, at *3.
Therefore, the court found the factor was
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 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.
Mattingly, 2011 WL 3320822, at *3 (citing
Weber, 243 P.3d at 6).
also suggests 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.” William B.
Rubenstein, Newberg on Class Actions § 6:21
(5th ed. 2017). The court finds the second factor also
slightly weighs in favor of the Plaintiff.
the court inquires whether the class action has been pleaded
in a manner that seeks to avoid federal
jurisdiction. JMA asserts 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.,
No. CV 14-03637 DDP, 2014 WL 3510151, at *3 (C.D. Cal.
July 14, 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 that Plaintiff
proposed a natural class. The court finds this factor weighs in
favor of remand.
fourth factor addresses the forum's nexus to class
members, alleged harm, or defendants. Under similar facts,
the Mattingly court stated:
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