Baker v. PDC Energy, Inc., et al

Filing 60

ORDER 48 Motion for Protective Order is DENIED, and further ORDERED that Defendants shall provide Plaintiff with the requested discovery, by Magistrate Judge Michael J. Watanabe on 12/09/2014.(slibi, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No. 14-cv-02537-RM-MJW
BUDDY BAKER,
on behalf of himself and a class of similarly situated royalty owners,
Plaintiff,
v.
PDC ENERGY, INC., and
DCP MIDSTREAM, LP,
Defendants.
ORDER ON DEFENDANT PDC ENERGY, INC.’S
MOTION FOR PROTECTIVE ORDER (Docket No. 48)
MICHAEL J. WATANABE
United States Magistrate Judge
Defendants moved for a protective order barring discovery of the identities and
addresses of putative class members at this stage of proceedings. Plaintiffs oppose the
motion, and it is now fully briefed. (Docket Nos. 48, 51, & 56.) District Judge Raymond
P. Moore referred the motion to the undersigned. (Docket No. 49.) The Court has
reviewed the parties’ filings, taken judicial notice of the court’s file, and considered the
applicable Federal Rules of Civil Procedure, statutes, and case law. Further, the Court
has reviewed the parties’ filings from Plaintiff’s related motion to remand. (Docket Nos.
16, 31, & 39.)
Now being fully informed, the Court makes the following findings of fact,
conclusions of law, and order.

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Background
This case was filed in state court as a class action. Defendants removed,
invoking jurisdiction under the Class Action Fairness Act of 2005, (CAFA), Pub.L. 109–
2, 119 Stat. 4 (2005). Plaintiff has moved to remand; one of Plaintiff’s arguments is that
the “home state” exception under CAFA applies. More specifically, he argues that the
primary defendants and over two-thirds of the putative class members are Colorado
citizens—and therefore this Court must decline to exercise jurisdiction under 28 U.S.C.
§ 1332(d)(4)(B).
During the limited jurisdictional discovery that has been allowed to date, Plaintiff
has requested the names and addresses of the putative class members. Plaintiff
argues that he needs the information to establish the CAFA exception. Defendants
argue that Plaintiff is not entitled to such information until the class-certification stage.
Discussion
This Court is vested with broad discretion in deciding whether to allow
jurisdictional discovery. Budde v. Ling–Temco–Vought, Inc., 511 F.2d 1033, 1035 (10th
Cir. 1975). “‘A refusal to grant discovery constitutes an abuse of discretion if the denial
results in prejudice to a litigant. Prejudice is present where pertinent facts bearing on
the question of jurisdiction are controverted or where a more satisfactory showing of the
facts is necessary.’” Grynberg v. Ivanhoe Energy, Inc., 490 Fed. App’x 86, 103 (10th
Cir. 2012) (unpublished) (quoting Sizova v. Nat'l Inst. of Standards & Tech., 282 F.3d
1320, 1326 (10th Cir. 2002)). Technically speaking, the home-state exception to CAFA
is not matter of jurisdiction but rather one of mandatory abstention—but the standards

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for granting limited discovery into the issue do not turn on this distinction. See Dutcher
v. Matheson, 16 F. Supp. 3d 1327, 1339 (D. Utah 2014).
In determining whether to allow discovery for this purpose, courts look to two
factors: (1) whether the plaintiff has made a sufficient showing that the home-state
exception likely applies, and (2) whether the requested class information is “readily
available” to the defendant. See, e.g., Abdale v. N. Shore-Long Island Jewish Health
Sys., Inc., 2014 WL 2945741, at *10 (E.D. N.Y. June 30, 2014) (“[G]iven the New York
connections in this action, it seems likely that two-thirds of the putative class will consist
of New York citizens. . . . Because Plaintiffs have made a substantial showing that
more than two-thirds of the putative class are New York citizens and much of the
information regarding the putative class is possessed by Defendants, the Court finds
that the appropriate way to proceed here is with limited, expedited discovery on the
issue of the CAFA exceptions.”); Catron v. Colt Energy, Inc., 2013 WL 6016231, at *3
(D. Kan. Nov. 13, 2013) (“The court appreciates that plaintiff has attempted to limit its
request to a narrow focus. But it does not appear that the information may be as readily
available as plaintiff assumes. And the court does not find plaintiff's initial evidence of
the applicability of the local controversy exception to be as strong as plaintiff
contends.”); Bey v. Solarworld Indus. Am., Inc., 904 F. Supp. 2d 1096, 1102–03 (D.
Ore. 2012) (“[C]ommon sense tells the Court that it is highly likely that greater than twothirds of the putative class (which consists only of persons who worked for ‘SolarWorld’
in Hillsboro, Oregon during the relevant time period) were . . . citizens of Oregon.

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Nevertheless, Defendants are directed to review their records and allow Plaintiff
appropriate discovery, if requested . . . .”).
These factors weigh in Plaintiff’s favor here. First, Plaintiff has made a sufficient
showing that the home-state exception applies. In his motion to remand, and his reply
in support thereof, Plaintiff alleges:
•

Defendants’ predecessor in interest, in related litigation, alleged that over
70% of the purported class were Colorado citizens when removing that
related case to federal court;

•

This case concerns royalties from gas wells located in Colorado; and

•

Defendants provided an affidavit in support of their notice of removal alleging
that they currently mail checks to over 400 persons outside the state of
Colorado, while the putative class is around 1600 persons;

Collectively, these allegations strongly suggest that the home-state exception might
apply. Second, the requested information appears to be readily ascertainable.
Defendants are currently making payments to all members of the putative class,
pursuant to a previous class-action settlement; presumably, they already have some
sort of list kept for this purpose, or some type of database from which a list can be
quickly developed. Discovery into this question would impose a de minimis burden on
Defendants. Limited discovery into the home-state exception is appropriate.
WHEREFORE, for the foregoing reasons, it is hereby ORDERED that Defendant
PDC Energy, Inc.’s Motion for Protective Order (Docket No. 48) is DENIED, and further
ORDERED that Defendants shall provide Plaintiff with the requested discovery.

Dated: December 9, 2014
Denver, Colorado

/s/ Michael J. Watanabe
Michael J. Watanabe
United States Magistrate Judge