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Adams v. Eagle Road Oil LLC

United States District Court, N.D. Oklahoma

July 23, 2019

JAMES ADAMS, on behalf of himself and other Oklahoma citizens similarly situated, Plaintiff,
v.
EAGLE ROAD OIL LLC, CUMMINGS OIL COMPANY, TERRITORY RESOURCES, LLC, ENERVEST OPERATING, L.L.C., PETRO WARRIOR, L.L.C., PETROQUEST ENERGY, L.L.C., and TRINITY OPERATING USG LLC, Defendants.

          OPINION AND ORDER

          GREGORY K. FRIZZELL UNITED STATES DISTRICT JUDGE.

         This matter comes before the court on the Motion to Remand [Doc. 46] of plaintiff James Adams, on behalf of himself and other Oklahoma citizens similarly situated (collectively, “plaintiffs”). For the reasons discussed below, the motion is granted.

         I. Background/Procedural History

         This case has a lengthy procedural history-spanning almost three years-which the court does not attempt to comprehensively summarize. Rather, relevant to the instant motion, on November 17, 2016, plaintiffs filed the Class Action Petition in the District Court in and for Pawnee County, Oklahoma against defendants Eagle Road Oil LLC, Cummings Oil Company, and John Does. [Doc. 2-3]. On December 21, 2016, Cummings Oil removed the case to the Northern District of Oklahoma on the basis of federal question jurisdiction pursuant to 28 U.S.C. § 1331, where it was designated No. 16-CV-757 and randomly assigned to U.S. District Judge Claire V. Eagan. [Doc. 2-9]. On April 12, 2017, Judge Eagan concluded the court lacked federal question jurisdiction and therefore remanded the case back to the District Court for Pawnee County. [Doc. 2-13].

         Plaintiffs filed the Third Amended Complaint-the operative pleading in this matter-on August 27, 2018 in the District Court for Pawnee County. In addition to previously named defendants Eagle Road and Cummings, the Third Amended Complaint named as defendants Territory Resources, LLC; Enervest Operating, L.L.C.; Petro Warrior, L.L.C.; PetroQuest Energy, L.L.C.; and Trinity Operating (USG) LLC for the first time. [Doc. 2-1]. Trinity removed the case to this court pursuant to the Class Action Fairness Act (“CAFA”) provisions of 28 U.S.C. § 1332(d). [Doc. 2, p. 2, ¶ 5]. Plaintiffs now ask the court to decline jurisdiction and remand, and Enervest and Trinity have responded. [Doc. 91 and Doc. 93].

         II. Analysis

         Plaintiffs contend the court should decline to exercise jurisdiction and remand is proper pursuant to § 1332(d)(4)(A), the local controversy exception to CAFA jurisdiction.[1] [Doc. 46]. The exception “is intended to respond to concerns that class actions with a truly local focus should not be moved to federal court under this legislation because state courts have a strong interest in adjudicating such disputes.” Coffey v. Freeport McMoran Copper & Gold, 581 F.3d 1240, 1243 (10th Cir. 2009) (quoting S. Rep. No. 109-14, at 39 (2005)). As the party seeking remand, plaintiffs bear the burden of showing jurisdiction is improper in this court.[2] Woods v. Standard Ins. Co., 771 F.3d 1257, 1262 (10th Cir. 2014). With respect to the exception, the Tenth Circuit has explained:

The local controversy exception provides that a federal court “shall decline” jurisdiction where: (1) more than two-thirds of the class members are citizens of the state where the action is filed; (2) plaintiffs seek “significant relief” from at least one local defendant who is a citizen of the state and whose alleged conduct forms a “significant basis” for the claims asserted; (3) the “principal injuries” were incurred in the state; and (4) no other class action “has been filed asserting the same or similar factual allegations against any of the defendants on behalf of the same or other persons” in the three years prior.

Dutcher, 840 F.3d at 1190-91 (citing 28 U.S.C. § 1332(d)(4)(A)). In assessing each element, the court “bear[s] in mind that the purpose of each of these criteria is to identify a truly local controversy-a controversy that uniquely affects a particular locality to the exclusion of all others.” S. Rep. No. 109-14, at 38 (2005). If a plaintiff satisfies all requirements, the court must decline to exercise jurisdiction. Woods, 771 F.3d at 1265; see also 28 U.S.C. § 1332(d)(4) (“[a] district court shall decline to exercise jurisdiction . . . .”) (emphasis added).

         In its response, Enervest argues only that plaintiffs have failed to satisfy their burden of proof with respect to the second element-specifically, that one defendant is an Oklahoma citizen. [Doc. 91]. Trinity contends that plaintiffs fail to establish both the second and fourth requirement. Specifically, Trinity argues that plaintiffs do not demonstrate that any defendant is a significant local defendant, and that this is not the only class action filed in the past three years involving the same or similar allegations against the defendants.[3] The court first considers the second requirement-whether plaintiffs seek “significant relief” from at least one defendant who is a citizen of Oklahoma and whose alleged conduct forms a “significant basis” for plaintiffs' claims. 28 U.S.C. § 1332(d)(4)(A)(i)(II).

         A. Significant Local Defendant

         The significant local defendant requirement stems from § 1332(d)(4)(A)(i)(II), which provides as follows:

(4) A district court shall decline to exercise jurisdiction under paragraph (2)-
(A)(i) over a class action in which
(II) at least 1 defendant is a ...

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