United States District Court, E.D. Oklahoma
PERRY CLINE, on behalf of himself and all others similarly situated, Plaintiff,
SUNOCO, INC. (R&M), and, SUNOCO PARTNERS MARKETING & TERMINALS, L.P., Defendants.
A. Gibney, Jr. United States District Judge
Cline owns a royalty interest in oil wells in Oklahoma. The
defendants, Sunoco, Inc. (R&M), and Sunoco Partners
Marketing & Terminals, L.P. ("Sunoco"),
purchase oil from the wells, which they then sell. Sunoco
pays interest owners, including Cline, proceeds from the oil
it purchases and sells. Oklahoma's Production Revenue
Standards Act ("PRSA") governs when Sunoco must pay
those proceeds and imposes statutory interest for paying the
proceeds late. See Okla. Stat. tit. 52, § 570,
et seq. Cline has sued Sunoco for failing to pay the
statutory interest on late payments it made on oil proceeds.
Cline also seeks to maintain a class action on behalf of well
owners who did not receive their production proceeds on time
and did not receive statutory interest with those payments.
He seeks money damages for violating the PRSA, damages for
fraud, punitive damages, an accounting, and other equitable
Cline filed this lawsuit, Sunoco investigated the claim and
tendered to Cline the statutory interest Sunoco believes it
owed him. Cline has not cashed the check Sunoco sent him for
the interest. Sunoco now moves to dismiss this action,
arguing that the Court lacks subject matter jurisdiction
because the tender of payment has mooted Cline's claim.
Court will deny the motion because the tender of payment does
not provide Cline with complete relief. Cline, therefore, has
standing to pursue his class claims.
purchases oil from numerous wells in Oklahoma and distributes
proceeds from the oil to well owners. Under the PRSA, Sunoco
must pay statutory interest to interest owners when it does
not pay the proceeds on time, based on timetables set forth
in the statute. The PRSA contains several exceptions to the
requirement to pay within those timetables.
often waits to pay the statutory interest until an interest
owner requests the interest. Sunoco then investigates the
payment and pays the interest if it determines it paid the
proceeds late and owes the requestor interest under the PRSA.
July, 2017, Cline sued Suncoco in Oklahoma state court,
alleging that its practice for investigating and paying the
proceeds violates the PRSA. He also alleges that Sunoco has
committed fraud by hiding the fact that Sunoco owes interest
to the class members. Cline seeks class certification, actual
damages, an accounting, disgorgement, an injunction, punitive
damages,  and attorneys' fees and costs. Sunoco
removed the action to this Court in August, 2017.
Cline filed the lawsuit, Sunoco investigated Cline's
claims that Sunoco owed Cline statutory interest. In
December, 2017, Sunoco sent Cline a check for the interest it
believes it owed him for late payments made in 2015 and 2016.
Sunoco attached a check to a letter that described the check
as an unconditional payment and not an offer to settle the
lawsuit. To date, Cline has not cashed the check.
moved to certify the class and name him as class
representative in June, 2019. In August, 2019, Sunoco moved
to dismiss for lack of jurisdiction. Sunoco argues that it
has paid Cline all the statutory interest Sunoco owes him,
and that Sunoco has not made any late payments to Cline since
2016. Sunoco says this unconditional tender moots Cline's
claim. Sunoco argues that because Cline no longer has a live
controversy with Sunoco, the Court should dismiss the case
and deny the class certification motion.
Legal Standard 
courts have jurisdiction over "cases" and
"controversies." U.S. Const., Art. Ill. § 2. A
plaintiff must show that he has a legally cognizable
interest, or personal stake, in the outcome of the
litigation. Genesis Healthcare Corp. v. Symcyzk, 569
U.S. 66, 71 (2013). "This requirement ensures
that the Federal Judiciary confines itself to its
constitutionally limited role of adjudicating actual and
concrete disputes, the resolutions of which have direct
consequences on the parties involved." Id. To
have standing to bring an action, a plaintiff must prove (1)
that he suffered an injury in fact that is "concrete and
particularized and ... actual or imminent, not conjectural or
hypothetical;" (2) that the injury is "fairly
traceable to the challenged action of the defendant;"
and (3) that it is "likely, as opposed to merely
speculative, that the injury will be redressed by the relief
requested." Tandy v. City of Wichita, 380 F.3d
1277, 1283 (10th Cir. 2004); see Lujan v. Defs. of
Wildlife, 504 U.S. 555, 560-61 (1992).
actual controversy must exist at all stages of the action; if
the plaintiff loses his "personal stake" at any
point during the litigation, the court must dismiss the
action as moot. See Genesis Healthcare Corp., 569
U.S. at 71. "A case becomes moot, however, 'only
when it is impossible for a court to grant any effectual
relief whatever to the prevailing party.'"
Campbell-Ewald Co. v. Gomez, 136 S.Ct. 663, 669
(2016) (quoting Knox v. Serv. Emps. Int'l Union,
Local 1000, 567 U.S. 298, 307 (2012)). If a party has a
concrete interest in the outcome of the action, "however
small," a court should not dismiss the case as moot.
Id. (quoting Chafin v. Chafin, 568 U.S.
The Campbell-Ewald Decision
lies at the heart of this dispute. In
Campbell-Ewald, the Supreme Court considered whether
an "unaccepted offer to satisfy the named plaintiffs
individual claim [is] sufficient to render a case moot when
the complaint seeks relief on behalf of the ...