Devazier v. Caruth et al
OPINION AND ORDER granting 55 and 58 motions to dismiss for lack of standing and failure to state a claim. This action is dismissed. Signed by Judge Kristine G. Baker on 7/13/2016. (ljb)
IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF ARKANSAS
STEPHANIE DEVAZIER, as class
representative in Sara Stewmon vs. SEECO, Inc.,
Desoto Gathering Company, LLC
and Southwestern Midstream
Case No. 2:16-cv-00067-KGB
BEN H. CARUTH, et al.
OPINION AND ORDER
Plaintiff Stephanie Devazier is the appointed class representative of a state class action
(“Stewmon”) that is pending before the Arkansas Supreme Court (Dkt. No. 59, at 2). See
SEECO, Inc. v. Stewmon, CV-15-198 (Ark. filed Mar. 11, 2015). Defendants are counsel for
both the plaintiff (“Smith Class Counsel”) and defendants (“Smith Defense Counsel”) in Smith v.
SEECO, Inc., et al., 4:14-cv-435, a federal class action that is currently pending before the
Honorable Brian S. Miller of the United States District Court for the Eastern District of
Arkansas. On April 11, 2016, Judge Miller entered an order granting Smith Class Counsel’s
second motion for class certification and directed Smith Class Counsel to submit a proposed class
notice plan within 30 days. By this action, Ms. Devazier seeks to enjoin Smith Class Counsel
and Smith Defense Counsel from communicating directly with any members of the class she
purportedly represents, including through Court-approved class notice, which is required under
Rule 23 of the Federal Rules of Civil Procedure. Ms. Devazier also requests that the Court order
that “any communication involving any of the [Stewmon class] be sent only to their duly
appointed class counsel, E. Dion Wilson, B. Michael Easley and Timothy R. Holton, or in the
alternative, with the express consent of their appointed counsel” (Dkt. No. 52, at 20).
Currently pending before the Court are Ms. Devazier’s emergency motion for preliminary
injunction, Smith Class Counsel’s motion to dismiss, Smith Defense Counsel’s motion to dismiss
for lack of standing and failure to state a claim, Smith Defense Counsel’s renewed motion to
dismiss for lack of standing and failure to state a claim, and Smith Class Counsel’s renewed
motion to dismiss (Dkt. Nos. 6; 33; 41; 55; 58). 1 For the following reasons, the Court grants
Smith Defense Counsel’s renewed motion to dismiss for lack of standing and failure to state a
claim and Smith Class Counsel’s renewed motion to dismiss for lack of standing and failure to
state a claim (Dkt. Nos. 55; 58). All other pending motions are denied as moot. Ms. Devazier’s
complaint is dismissed.
Unless otherwise noted, the following information is taken from the memorandum of law
in support of Smith Defense Counsel’s renewed motion to dismiss for lack of standing and
failure to state a claim (Dkt. No. 56). In recent years, oil and gas royalty owners have filed
multiple class action lawsuits against Southwestern Energy Company and its affiliates for the
alleged underpayment of royalties. In 2014, separate Arkansas state courts certified classes in
two of these lawsuits: (1) Snow v. SEECO, Inc., et al., which consisted of “Arkansas citizens
with particular oil and gas leases[;]” and (2) Stewmon v. SEECO, Inc., et al., which consisted of
“Arkansas residents with the same leases to which no party to the lease is a non-Arkansas
resident” (Dkt. No. 56, at 4). Ms. Devazier is the class representative, and her counsel in this
matter is class counsel for the Stewmon class. The class certification orders in Snow and
Stewmon were appealed, and the appeal remains pending before the Arkansas Supreme Court.
On June 2, 2016, the Court held a hearing on this matter attended by all parties (Dkt.
No. 57). At the hearing, the Court allowed E. Dion Wilson, counsel for Ms. Devazier, to
withdraw his motion to withdraw as counsel (Dkt. No. 37).
Class notice in both Snow and Stewmon has yet to be approved or sent to potential class
On July 25, 2014, Connie Jean Smith, who is not represented by the same counsel as Ms.
Devazier, filed a federal class action suit in the Eastern District of Arkansas. Ms. Smith initially
sought to certify “a ‘leftovers’ class of all royalty owners but the members of the state court
Snow and Stewmon classes” (Dkt. No. 56, at 4). Her initial request was denied after the Court
found that the class was not ascertainable under Rule 23(a).
Ms. Smith later moved for
“certification of a class of SEECO cost-bearing royalty owners lacking an Arkansas address or,
alternatively, a broader class of all costbearing royalty owners” (Dkt. No. 56, at 5). On April 11,
2016, Judge Miller certified the broader class, named Ms. Smith as class representative, and
appointed her lawyers as class counsel. Judge Miller acknowledged that “adopting this broader
definition overlaps this case’s affiliate cases in Snow and Stewmon, which some scholars have
cautioned against.” Smith v. SEECO, Inc., et al., 4:14-cv-435 (E.D. Ark. Apr. 11, 2016) (order
granting class certification). However, Judge Miller preferred certifying the broader class,
finding that excluding royalty owners to avoid overlap with Snow and Stewmon would have
“serious practical effects that cannot be understated” and would “promote the potential for
inconsistent judgments and undercut the very purpose of the class action.” Id.
On April 26, 2016, Ms. Devazier filed this action in the Circuit Court of St. Francis
County, Arkansas (Dkt. No. 1, at 1). Smith Defense Counsel removed the case to this Court on
April 28, 2016 (Dkt. No. 1, at 1). After Smith Class Counsel and Smith Defense Counsel filed
separate motions to dismiss, Ms. Devazier filed an amended complaint in which she alleges that
the defendants have acted improperly in this and other unrelated actions (Dkt. No. 52).
While this action was pending, counsel for Ms. Devazier, acting on behalf of an alleged
Smith class member, attempted to intervene in Smith v. SEECO, Inc. to challenge the adequacy
of Smith Class Counsel and the proposed notice plan. Judge Miller denied the motions, finding
that intervention was either unnecessary or premature. Smith v. SEECO, Inc., et al., 4:14-cv-435
(E.D. Ark. June 3, 2016) (order denying motions to intervene without prejudice). Ms. Devazier’s
counsel filed an interlocutory appeal of Judge Miller’s Order as well as a motion to stay Smith
As a preliminary matter, the Court must determine whether it has subject matter
jurisdiction over this action. Defendants, who removed this case from state court, bear the
burden of proving that the jurisdictional threshold is satisfied. Bell v. Hershey Co., 557 F.3d
953, 956 (8th Cir. 2009). In their notice of removal and in subsequent filings, defendants argue
that the Court has jurisdiction pursuant to the Federal Officer Removal Statute, 28 U.S.C. § 1442
(Dkt. Nos. 1; 50; 51). 2 The Federal Officer Removal Statute provides that:
(a) A civil action or criminal prosecution that is commenced in a State court and
that is against or directed to any of the following may be removed by them to the
district court of the United States for the district and division embracing the place
wherein it is pending:
(1) The United States or any agency thereof or any officer (or any person
acting under that officer) of the United States or of any agency thereof, in
Smith Class Counsel did not join in the notice of removal. Under the general removal
statute, all defendants who have been served must join in the notice of removal for removal to be
procedurally proper. See Pritchett v. Cottrell, Inc., 512 F.3d 1057, 1062 (8th Cir. 2008) (“The
general removal statute . . . has been interpreted to require that all defendants must consent to the
removal.”). However, the Federal Officer Removal Statute does not require that all defendants
consent to removal; instead, a federal officer or agency defendant can remove the case under that
statute without unanimous consent. See Durham v. Lockheed Martin Corp., 445 F.3d 1247, 1253
(9th Cir. 2006) (“Whereas all defendants must consent to removal under section 1441, a federal
officer or agency defendant can unilaterally remove a case under section 1442.”) (internal
an official or individual capacity, for or relating to any act under color of
such office or on account of any right, title or authority claimed under any
Act of Congress for the apprehension or punishment of criminals or the
collection of the revenue. . . .
(3) Any officer of the courts of the United States, for or relating to any act
under color of office or in the performance of his duties[.]
28 U.S.C. § 1442. Defendants, who are all private attorneys, do not contend that they are federal
officials for the purposes of this action, but rather they contend that they “are persons acting
under an officer of the United States, in an official or individual capacity, for or relating to any
act under color of such office[,]” making this case removable under § 1442(a)(1) (Dkt. No. 1; ¶
5). The federal official they identify is Judge Miller, who has directed defendants to “prepare
notices to be sent to members of the class certified in Smith v. SEECO” (Dkt. No. 1; ¶ 5). At the
Court’s hearing on this matter, Ms. Devazier confirmed that she did not take a position as to
whether the Court has subject matter jurisdiction over this case.
Federal District Judge As An Officer Of The United States For The
Purposes Of 28 U.S.C. § 1442(a)(1)
The Court must first determine whether an officer of the courts of the United States can
be treated as an officer for the purposes of § 1442(a)(1). Section 1442(a) has four subparts, two
of which are relevant to this action. Under subsection (a)(1), cases are removable if brought
against “any officer (or any person acting under that officer) of the United States or of any
agency thereof . . . for or relating to any act under color of such office.” 28 U.S.C. § 1442(a)(1)
(emphasis added). Subsection (a)(3) provides that cases are removable if brought against “[a]ny
officer of the courts of the United States, for or relating to any act under color of office or in the
performance of his duties[.]” Unlike subsection (a)(1), subsection (a)(3) does not provide that
cases are removable if brought against any person acting under an officer of the Court. The
defendants, who are private attorneys, do not qualify as officers of the Court for the purposes of
§ 1442(a)(3). State of Fla. v. Shimek, 356 F. Supp. 687, 688 (N.D. Fla. 1973) (finding that a
private attorney admitted to practice in federal court was not an officer of the court for the
purposes of § 1442); see also Cammer v. United States, 350 U.S. 399, 405 (1956) (recognizing
that, while private attorneys are often called “officers of the court,” they are not officers in the
same sense as marshals, bailiffs, court clerks or judges). Therefore, for this case to be removable
under § 1442, defendants must establish that: (1) Judge Miller qualifies as an officer of the
United States under subsection (a)(1); and (2) that they are acting under him.
Smith Class Counsel argues that a federal district court judge is indisputably a federal
officer (Dkt. No. 41, at 4 n.4) (citing Jefferson County, Ala. v. Acker, 527 U.S. 423 (1999)).
However, it is not indisputable that a federal district court judge is a federal officer for the
purposes of subsection (a)(1). In fact, in Jefferson County Ala. v. Acker, the case Smith Class
Counsel relies upon in support of their assertion that a federal district court judge is a federal
officer, the Supreme Court found that a case brought against federal district court judges was
properly removed under (a)(3), not (a)(1). Jefferson, 527 U.S. at 430. A footnote within
Jefferson could even be read to suggest that judges may not be federal officers for the purposes
of § 1442’s other subsections. Id. at 430 n.3 (“Other subsections of § 1442 establish similar
removal rights for other federal officers.”).
However, the Court finds that it has subject matter jurisdiction over this action pursuant
to § 1442(a)(1) for three reasons. First, the Court notes Smith Class Counsel’s argument that the
Supreme Court has indicated that “subsection (a)(1) is the operative subsection and generally
applicable upon subsections (a)(2)-(4)” (Dkt. No. 51, at 4 n.3). This argument is based on a
statement made in Mesa v. California, where the Supreme Court wrote that “the specialized
grants of jurisdiction in . . . subsections (2)-(4) of § 1442(a) are largely the ‘residue’ of the pre-
1948, more limited removal statutes now entirely encompassed by the general removal provision
of the first clause of subsection (1).” Mesa v. California, 489 U.S. 121, 134 (1989) (citing Paul
M. Bator et al., The Federal Courts and the Federal System 1057 (3d ed. 1988)). Second the
Eighth Circuit Court of Appeals has found that a case against a federal judge is removable under
either subsection (a)(1) or (a)(3). Meredith v. Van Oosterhout, 286 F.2d 216, 219 (8th Cir.
1960). Third, the Court is cognizant of the fact that § 1442 must be “liberally construed” in
favor of jurisdiction, Watson v. Philip Morris Companies, Inc., 551 U.S. 142, 147 (2007), and
“should not be frustrated by a narrow, grudging interpretation of § 1442(a)(1),” Willingham v.
Morgan, 395 U.S. 402, 407 (1969). For these reasons, the Court finds that Judge Miller can be
treated as a federal officer for the purposes of § 1442(a)(1).
Whether Defendants Are “Acting Under” Judge Miller For The
Purposes Of 28 U.S.C. § 1442(a)(1)
In order for this case to be removable pursuant to § 1442(a)(1), defendants must establish
that: (1) they are acting under the direction of a federal officer; (2) there is a causal connection
between their actions and the official authority; (3) they have a colorable federal defense to the
Ms. Devazier’s claims; and (4) they are “people” within the meaning of the statute. Jacks v.
Meridian Res. Co., LLC, 701 F.3d 1224, 1230 (8th Cir. 2012). There can be no dispute that
defendants are people within the meaning of the statute.
The Court finds that defendants
establish the other three elements, as well.
To satisfy the first element, defendants must demonstrate that the assistance they are
providing Judge Miller “goes beyond simple compliance with the law and helps [Judge Miller]
fulfill other basic governmental tasks.” Watson, 551 U.S. at 153. They must be “helping the
Government to produce an item that it needs.” Id. Federal Rule of Civil Procedure 23(c)(2)(B)
provides that “the court must direct to class members the best notice that is practicable under the
circumstances, including individual notice to all members who can be identified through
reasonable effort.” Fed. R. Civ. P. 23 (emphasis added). Judge Miller has directed Smith Class
Counsel to submit a proposed notice plan and otherwise assist him in providing class notice as is
required under Rule 23. The Court finds that, under these circumstances, defendants are not
simply complying with the law, but they are acting under the direction of Judge Miller in a way
that helps him fulfil a governmental task.
Defendants must also demonstrate that there is a causal connection between the acts Ms.
Devazier wishes to enjoin and their official authority. Prior to 2011, “proponents of removal
jurisdiction under § 1442 were required to ‘demonstrate that the acts for which they [we]re being
sued’ occurred at least in part ‘because of what they were asked to do by the Government.’” In
re Commonwealth's Motion to Appoint Counsel Against or Directed to Def. Ass'n of
Philadelphia, 790 F.3d 457, 471 (3d Cir. 2015) (alteration in original) (emphasis in original)
(quoting Isaacson v. Dow Chem. Co., 517 F.3d 129, 137 (2d Cir. 2008)); see also Jacks, 701
F.3d at 1230 (citing to Isaacson in describing the causation element). However, Congress
broadened § 1442 “to encompass suits ‘for or relating to any act under color of [federal]
office.’” Id. (alteration in original) (emphasis in original) (quoting § 1442(a)(1)). In the light of
Congress’s broadening amendment, the Third Circuit Court of Appeals has found “that it is
sufficient for there to be a ‘connection’ or ‘association’ between the act in question and the
federal office.” Id. Under either standard, the Court finds that the causation element is satisfied.
Ms. Devazier seeks to enjoin defendants from assisting Judge Miller in preparing and
distributing class notice in Smith. They are being sued because Judge Miller instructed them to
prepare class notice.
Their communications with class counsel are associated with Judge
Miller’s Order certifying the class. Accordingly, the Court finds that the second element is
Finally, the Court must determine whether defendants have a colorable federal defense to
Ms. Devazier’s claim. This element does not require defendants to establish that they have a
clearly sustainable federal defense for removal to be proper; § 1442 “is broad enough to cover all
cases where federal officers can raise a colorable defense.” Jacks, 701 F.3d at 1235 (quoting
Willingham, 395 U.S. at 406-07). Smith Class Counsel and Smith Defense Counsel both argue
that they have a colorable defense to Ms. Devazier’s claims based on the Supremacy Clause
(Dkt. No. 50, at 9-10; No. 51, at 7). See Donovan v. City of Dallas, 377 U.S. 408, 413 (1964)
(“[S]tate courts are completely without power to restrain federal-court proceedings in in
personam actions.”). The Court finds that this is a sufficiently colorable defense for the purposes
of removal pursuant to § 1442.
The Court finds that defendants are acting under the direction of Judge Miller, that there
is a causal connection between their actions and his official authority, that they have a colorable
federal defense to Ms. Devazier’s claims, and that they are persons. Therefore, this case is
removable under § 1442(a)(1), and this Court has subject matter jurisdiction.
To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), “a
complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is
plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible “when the plaintiff pleads
factual content that allows the court to draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556). “While a complaint attacked
by a [Federal] Rule [of Civil Procedure] 12(b)(6) motion to dismiss does not need detailed
factual allegations, a plaintiff’s obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’
requires more than labels and conclusions, and a formulaic recitation of the elements of a cause
of action will not do.” Twombly, 550 U.S. at 555 (alteration in original) (citations omitted).
“[T]he complaint must contain facts which state a claim as a matter of law and must not be
conclusory.” Briehl v. General Motors Corp., 172 F.3d 623, 627 (8th Cir. 1999). “When ruling
on a motion to dismiss, the district court must accept the allegations contained in the complaint
as true and all reasonable inferences from the complaint must be drawn in favor of the
nonmoving party.” Young v. City of St. Charles, 244 F.3d 623, 627 (8th Cir. 2001).
Ms. Devazier seeks to enjoin Smith Class Counsel and Smith Defense Counsel from
communicating in any way, including through Rule 23 class notice, with any members of the
Smith class who are also members of the Stewmon class (“Smith/Stewmon class members”). She
argues that class certification in Stewmon established an attorney-client relationship between
absent class members and her counsel, and she argues that any communication from Smith Class
Counsel and Smith Defense Counsel sent directly to Smith/Stewmon class members would violate
Rule 4.2 and 7.3 of the Arkansas Rules of Professional Conduct and Arkansas Rule of Civil
Ms. Devazier also claims that the class notice proposed in Smith is fraudulent and
misleading because she alleges that Smith Class Counsel and Smith Defense Counsel “have
entered into an improper agreement which was materially adverse to the interests of [Ms.
Devazier] and members of [the Stewmon] class” (Dkt. No. 52, at 7). Ms. Devazier alleges that
Smith Class Counsel and Smith Defense Counsel, along with class counsel in Snow v. SEECO,
Inc., participated in a mediation conference for a global settlement of all claims against SEECO
and that they agreed to “hide” these negotiations from Ms. Devazier’s counsel (Dkt. No. 52, at 89). She asserts that “[t]his collusion has resulted in a breakdown of the adversarial system” and
that “the conflict of interests between [Smith Class Counsel] and Plaintiff Devazier and her
absent class members is obvious and cannot be overlooked” (Dkt. No. 52, at 11; 14). She claims
that the proposed class notice in Smith “constitutes a fraudulent misrepresentation” because it
does not accurately reflect the alleged misconduct by Smith Class Counsel and Smith Defense
Counsel (Dkt. No. 52, at 18). She argues that this Court should enjoin class notice from being
sent in Smith because “such communications would improperly bypass Devazier and duly
appointed class counsel completely, and have the effect of nullifying her appointed position, and
violating the duties entrusted to her, and so would also injure her personally, as well as in her
representative capacity” (Dkt. No. 52, at 18).
Smith Defense Counsel argues that Ms. Devazier’s complaint should be dismissed
“because she lacks standing, fails to state a claim upon which relief can be granted, and fails to
adequately plead any of her last-minute ‘misrepresentation,’ ‘fraud,’ and ‘conspiracy’ theories,
let alone with the particularity required by the Rules” (Dkt. No. 56, at 2). Smith Class Counsel
argues that Ms. Devazier lacks standing and has no right to seek relief on behalf of absent class
The Court must first address whether Ms. Devazier has standing to bring this suit, as
“standing is a jurisdictional prerequisite that must be resolved before reaching the merits of a
suit.” City of Clarkson Valley v. Mineta, 495 F.3d 567, 569 (8th Cir. 2007). Defendants argue
that Ms. Davzier lacks standing for two reasons. 3 First, Smith Class Counsel argues that Ms.
Devazier lacks standing because Ms. Devazier’s complaint is based on alleged violations of the
Arkansas Rules of Professional Conduct, which “do not confer standing to private citizens like
Devazier to commence a case” (Dkt. No. 34, at 2). In response, Ms. Devazier argues that she has
special status, as Stewmon class representative, to bring claims based on the Arkansas Rules of
Professional Conduct (Dkt. No. 49, at 2-4). The Court will address this issue in relation to Smith
Defense Counsel’s argument that Ms. Devazier fails to state a claim.
Defendants also argue that Ms. Devazier lacks standing because she fails to allege how
she would be injured if defendants are allowed to communicate with Smith/Stewmon class
members (Dkt. No. 56, at 8). Going further, they argue that Ms. Devazier “cannot, as a matter of
law, allege an injury on behalf of the class she purports to represent,” particularly because the
absent Stewmon class members have not yet been afforded an opportunity to opt-out of
representation by Ms. Devazier and her attorneys (Dkt. No. 56, at 8; No. 34, at 2-5). In response,
Ms. Devazier asserts that, as Stewmon class representative, she “is under an affirmative duty,
imposed by law, to act to protect the class” and that “[f]ailure to do so would subject her to
liability for breach of that fiduciary duty” (Dkt. No. 59, at 7). She asserts that she has standing to
bring this suit because, if she failed to act to prevent Smith/Stewmon Class members from
receiving “fraudulent and misleading communications” about Smith v. SEECO, she would be
subject to liability for breach of her fiduciary duty (Dkt. No. 59, at 2).
The parties disagree over whether Ms. Devazier or the defendants have the burden of
establishing standing in this action (Dkt. No. 56, at 7; No. 49, at 4). This disagreement does not
impact the Court’s decision. If Ms. Devazier has the burden of establishing standing, the Court
finds that she has failed to meet it. Conversely, if the defendants have the burden of establishing
that Ms. Devazier does not have standing, they have met their burden.
Standing consists of three elements: (1) injury; (2) causation; and (3) redressability.
Lujan v. Defenders of Wildlife, 504 U.S. 555, 560–61 (1992). To have standing based on a
future injury, Ms. Devazier must be “imminently threatened with a concrete and particularized
‘injury in fact’ that is fairly traceable to the challenged action of the defendant and likely to be
redressed by a favorable judicial decision.” Glickert v. Loop Trolley Transp. Dev. Dist., 792
F.3d 876, 881 (8th Cir. 2015) (quoting Lujan, 504 U.S. at 560).
While imminence is “a
somewhat elastic concept, it cannot be stretched beyond its purpose, which is to ensure that the
alleged injury is not too speculative for Article III purposes—that the injury is certainly
impending.” Clapper v. Amnesty Int'l USA, 133 S. Ct. 1138, 1147 (2013) (emphasis in original)
(quoting Lujan, 504 U.S. at 565 n.2). Thus, the Supreme Court has “repeatedly reiterated that
‘threatened injury must be certainly impending to constitute injury in fact,’ and that ‘[a]llegations
of possible future injury’ are not sufficient.” Id. (alteration in original) (emphasis in original)
(quoting Whitmore v. Arkansas, 495 U.S. 149, 158 (1990)). Future injury is not “certainly
impending” if it is speculative. Whitmore, 495 U.S. at 157-58; see also O'Shea v. Littleton, 414
U.S. 488, 496-98 (1974).
The Court finds that Ms. Devazier’s theory that she would be subject to liability for
breach of fiduciary duty if she failed to attempt to prevent defendants from communicating with
Smith/Stewmon class members is too speculative to establish Article III injury in fact. Ms.
Devazier essentially argues that if Smith Class Counsel and Smith Defense Counsel are illegally
colluding to settle this case to the detriment of absent class members, and if Judge Miller allows
them to communicate with Smith/Stewmon Class Members, and if Ms. Devaizer does nothing to
attempt to prevent such communications, and if she continues to serve as Stewmon class
representative after the Arkansas Supreme Court rules on the pending interlocutory appeal, then
that would constitute a breach of her fiduciary duty as Stewmon class representative and she
would be liable to absent class members. Her theory is based on speculation and conjecture.
The Court finds that Ms. Devazier lacks standing to pursue an injunction in this case.
Failure To State A Claim Upon Which Relief Can Be Granted
Even if Ms. Devazier had standing to pursue this claim, the Court would dismiss her
complaint. Ms. Devazier’s complaint is largely predicated on alleged violations of the Arkansas
Rules of Professional Conduct, which cannot be used as a basis for civil liability. Allen v.
Allison, 356 Ark. 403, 414 (Ark. 2004); Wills v. City of Mountain Home, Ark., No. 3:12-CV03090, 2013 WL 2634307, at *8 (W.D. Ark. June 12, 2013) (citing Allen, 356 Ark. at 414). Ms.
Devazier’s only other claims against the defendants arise out of her allegations of improper
conduct. To the extent that she attempts to raise fraud or misrepresentation claims, this Court
declines to pass on the merits of her claims and observes only that she fails to meet the special
pleading requirements of Federal Rule of Civil Procedure 9(b), which provides that “[i]n alleging
fraud or mistake, a party must state with particularity the circumstances constituting fraud or
In this case, Ms. Devazier essentially alleges that Smith Defense Counsel and Smith Class
Counsel met to discuss a global settlement of the claims of all royalty owners, that they agreed to
“hide” these negotiations from Ms. Devazier and her counsel, and that this “collusion” has
harmed her and absent members of the class (Dkt. No. 52, at 8-9). She claims that their
communications with class members, including through Court-approved Rule 23 class notice:
[W]ould act to give the absent class members biased and incorrect information
about their rights[;] . . . would fail to fully and completely apprise them of the
problems with the Caruth Defendants who are appointed as Smith’s class
counsel[;] . . . [and would] fail to inform them of the direct conflict of interest the
Caruth Defendants have as it relates to the absent Stewmon class members whose
appointed class counsel and class representatives were specifically excluded from
the secret global settlement negotiations.
(Dkt. No. 52, at 18). These are not sufficient allegations of fraud or material misrepresentation.
“[T]he language of Rule 9(b) requires a complaint in an action based on fraud . . . to allege all
the traditional substantive elements of fraud.” 5A Charles Alan Wright & Arthur R. Miller,
Federal Practice and Procedure § 1297 (3d ed.). Under Arkansas law, “[t]he tort of fraud,
misrepresentation, or deceit consists of five elements which must be proven by a preponderance
of the evidence: (1) a false representation of material fact; (2) knowledge that the representation
is false or that there is insufficient evidence upon which to make the representation; (3) intent to
induce action or inaction in reliance upon the representation; (4) justifiable reliance on the
representation; and (5) damage suffered as a result of the reliance.” Roach v. Concord Boat
Corp., 317 Ark. 474, 476, 880 S.W.2d 305, 306 (1994). Ms. Devazier does not allege how she
or Smith/Stewmon class members have been or would be damaged by receiving an as yet
unapproved by Judge Miller and unsent class notice in Smith or other communications from the
defendants. Therefore, her complaint fails to meet the particularity requirement of Rule 9(b).
More importantly, the Court notes that the particularity requirement of Rule 9(b) serves at
least three important purposes:
First, it deters the use of complaints as a pretext for fishing expeditions of
unknown wrongs designed to compel in terrorem settlements. Second, it protects
against damage to professional reputations resulting from allegations of moral
turpitude. Third, it ensures that a defendant is given sufficient notice of the
allegations against him to permit the preparation of an effective defense.
Streambend Properties II, LLC v. Ivy Tower Minneapolis, LLC, 781 F.3d 1003, 1010 (8th Cir.
2015). Allowing Ms. Devazier to proceed with this lawsuit simply because she attempts to
allege a fraud claim would undermine the purposes underlying Rule 9(b). To this Court, these
allegations appear to be an attempt to attack collaterally Judge Miller’s Order appointing Smith
class counsel and the proposed notice plan. The Court will not permit such a collateral attack to
proceed under the guise of the claims Ms. Devazier unsuccessfully attempts to allege here.
For these reasons, the Court concludes that is has jurisdiction over this dispute. The
Court also finds that Ms. Devazier lacks standing to pursue this case. Even if she had standing,
Ms. Devazier’s complaint would be dismissed for failure to state a claim. Smith Defense
Counsel’s renewed motion to dismiss for lack of standing and failure to state a claim and Smith
Class Counsel’s renewed motion to dismiss for lack of standing and failure to state a claim are
granted (Dkt. Nos. 55; 58). This action is dismissed.
So ordered this 13th day of July, 2016.
Kristine G. Baker
United States District Judge
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