United States District Court, W.D. Oklahoma
TIMOTHY D. DeGIUSTI UNITED STATES DISTRICT JUDGE.
the Court is Defendant SM Energy Company's (SME) Motion
for Summary Judgment with Respect to Claims of Named
Plaintiff and Motion to Dismiss Class Action for Mootness
[Doc. No. 196]. Plaintiff Chieftain Royalty Company
(Chieftain) has filed its response in opposition [Doc. No.
198] and SME has replied [Doc. No. 201]. On January 13, 2017,
Chieftain filed a Supplemental Brief regarding SME's
Motion [Doc. No. 221], to which SME responded [Doc. No. 224].
The matter is fully briefed and at issue.
following material facts are either uncontroverted, or deemed
admitted, and are viewed in the light most favorable to
Chieftain. Lounds v. Lincare, Inc., 812 F.3d 1208,
1220 (10th Cir. 2015). Immaterial facts, facts not properly
supported by the record, and legal arguments or conclusions
were omitted. Chavez v. County of Bernalillo, 3
F.Supp.3d 936, 949 n. 4 (D.N.M. 2014).
alleges SME underpaid royalties due it and others for the
production of natural gas from wells located in Oklahoma.
See Second Amend. Compl. ¶ 17 [Doc. No. 98].
The proposed class consisted of, among others, “[a]ll
non-excluded persons or entities who are or were royalty
owners in Oklahoma wells where: (1) SM ENERGY (including its
predecessors or affiliates) is or was the operator (or, as a
nonoperator, SM ENERGY separately marketed gas).”
See id. ¶ 10. The wells identified in
Chieftain's Complaint were the Wilt #1-10 well, Hicklin
#1-28 well, McDaniel #1-8 well, Edward #1-19 well, Brown
#1-26 well, Opitz #1 well, Haley #1 well, Haley #2-31 well,
Haley #3-31 well, Haley #4-31 well, Haley #5-31 well, and the
Hart #1-31 well. See Id. ¶ 18.
to a Purchase and Sale Agreement between SME and Defendant
EnerVest Energy Institutional Fund XIII-A, L.P., EnerVest
Energy Institutional Fund XIII-WIB, L.P., and EnerVest Energy
Institutional Fund XIII-WIC, L.P. (hereinafter
“EnerVest”), EnerVest purchased certain assets in
Oklahoma from SME, including the above-listed wells and their
associated oil and gas leases. EnerVest subsequently conveyed
an undivided 50% interest in the assets to Defendant
FourPoint Energy, LLC (“FourPoint”).
August 5, 2015, Chieftain, EnerVest, and FourPoint executed a
“Stipulation and Agreement of Settlement” (the
Settlement) with respect to Chieftain's claims against
those defendants. Under the Settlement, Chieftain agreed to
release “all claims associated with the marketing of,
the calculation, reporting and payment of royalty on, gas and
its constituents … during the Claim Period for each
Class Well [“Released Claims” or “Class
Claims”].” Settlement, ¶ 1.27 [Doc. No.
111-1]. The term “Class Wells” included
“every oil and gas well that is located within
properties and units acquired by certain of the Settling
Parties under the aforementioned Purchase and Sale Agreement
with SM dated November 4, 2013.” See id.
¶ 1.7. The parties prepared a list of the wells to be
included as part of the Settlement, which specified the
aforementioned wells, and submitted the list as Exhibit 2 to
the Settlement [Doc. No. 111-3]. However, the Settlement
specifically stated it did not cover certain wells not sold
For clarification and the avoidance of any doubt as to the
scope of this Settlement Agreement … [i]t is
understood and agreed that SM retained, and did not sell or
otherwise convey to any of the Settling Parties, certain of
the wells and properties covered by the Litigation, which are
referred to herein as the “SM-Retained
Properties” as further defined below. It is also
understood and agreed that this Settlement Agreement is not
intended to cover or release any claims whatsoever against SM
relating to the SM-Retained Properties. As of the date of
this Settlement Agreement, Litigation remains pending against
SM related to its payment of royalty on gas and its
constituents produced from the SM-Retained Properties, and
such Litigation related to the SM-Retained Properties remains
unaffected by this Settlement Agreement.
Settlement at 1, n. 1.
claims were to be released upon the “Effective Date,
” which was defined as the first date by which the
Settlement became “Final and Non- Appealable.”
Settlement, ¶ 1.11. Under the agreement, “Final
and Non-Appealable” meant:
(a) Forty (40) days have elapsed without the filing of: (i)
any appeal or original action in any court challenging or
seeking reconsideration, modification or vacation of the
Judgment, or otherwise seeking to interfere with or evade
provisions of this Settlement Agreement and the settlement
contemplated hereunder; or (ii) any motion which would extend
the time to appeal from the Judgment, or which challenges or
seeks reconsideration, modification or vacation of the
(b) One of the kinds of proceedings listed in subparagraph
(a) above, has been filed and has resulted in a final order
or judgment by the court in which it was commenced; that
final order or judgment has itself become final and is no
longer subject to further review in any court; and
additionally, if the proceeding was commenced in an Oklahoma
state district court, all of the conditions of subparagraph
(a) are satisfied with respect to such separate final order
Settlement, ¶ 1.15. Lastly, the Settlement stated that:
An award of attorneys' fees, Case Contribution Award
and/or Litigation Expenses is not a necessary term of this
Settlement Agreement and is not a condition of this
Settlement Agreement. No decision by the Court or any court
on any application for an award of attorneys' fees, Case
Contribution Award or Litigation Expenses shall affect the
validity or finality of the Settlement. Plaintiff and
Plaintiff's Counsel may not cancel or terminate the
Settlement Agreement or the Settlement based on this