Thiele et al v. Energen Resources Corporation

Filing 64

ORDER Defendants 18 Motion to Dismiss or Stay Litigation is GRANTED IN PART to the extent it stays the case until the New Mexico district court rules on the Anderson plaintiffs class certification and DENIED IN PART to the extent it seeks to dismiss this case under the first-filed rule., by Judge David M. Ebel on 12/7/2015.(evana, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO

Civil Action No. 15-cv-01475-DME-KLM

CAROL THIELE AND LYNN SWANEMYER, individually and on behalf of
themselves and the Colorado sub-classes of similarly situated royalty owners,
Plaintiffs,
v.
ENERGEN RESOURCES CORPORATION,
Defendant.

MEMORANDUM AND ORDER TEMPORARILY STAYING CASE

In its Motion to Dismiss or Stay Litigation (Doc. 18), Energen asks this Court to dismiss
Plaintiffs’ actions under the “first-filed rule,” arguing that a previously-filed lawsuit in New
Mexico is so substantially similar to this action as to be the same case. In the alternative,
Energen asks this Court to stay the case until the New Mexico Anderson action comes to an end.
For reasons that follow, this Court will DENY IN PART Energen’s motion to the extent it seeks
dismissal of the case and GRANT IN PART Energen’s motion to stay until after the New
Mexico district court has ruled on the class certification issue in the Anderson case.
I.

Legal Standard
The first-filed rule states that the “first federal district court which obtains jurisdiction of

parties and issues should have priority and the second court should decline consideration of the
action until the proceedings before the first court are terminated.” Cessna Aircraft Co. v. Brown,
348 F.2d 689, 692 (10th Cir. 1965). The first-filed rule promotes judicial economy because the

“simultaneous prosecution in two different courts of cases relating to the same parties and issues
leads to the wastefulness of time, energy and money.” Id. (quotations omitted).
District courts have wide discretion to stay a proceeding. See State Farm Mut. Auto. Ins.
Co. v. Scholes, 601 F.2d 1151, 1155 (10th Cir. 1979). In deciding whether to stay a case, district
courts should consider:
comity, the extent of disputed factual (as opposed to legal) issues involved, adequacy of
relief available in [the other] court, avoidance of maneuvers designed to throw sand into
judicial machinery, the order in which the courts obtained jurisdiction, the need for
comprehensive disposition of litigation, and the desirability of avoiding piecemeal
litigation.
Id.
II.

Factual Background
On April 24, 2015, Carol Thiele and Lynn Swanemyer, two Energen royalty owners with

Colorado well interests, filed this suit in Colorado state court. Energen removed the case to
federal court. Plaintiffs, in their First Amended Complaint, added another plaintiff—Gerald
Ulibarri—a royalty owner with New Mexico well interests who has since dismissed his claims
against Energen without prejudice. Plaintiffs seek recovery for breach of contract, breach of the
implied duty to market, and violation of the New Mexico Oil and Gas Proceeds Payment Act. A
major contention is whether Energen could deduct the New Mexico natural gas processors tax
(NGPT) amounts from its royalty payments to Plaintiffs. Plaintiffs have filed in this Court for a
class certification on that issue.
Previous to this lawsuit, on September 20, 2013, several royalty owners with interests in
Energen wells filed a class-action lawsuit against Energen in New Mexico federal district court.
Anderson Living Trust, et al. v. Energen Resources Corporation, No. 1:13-cv-00909-WJ-CG
(D.N.M. filed September 20, 2013). The Anderson plaintiffs make several arguments similar to

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Plaintiffs’ claims. The most significant claim for purposes of this motion is that the Anderson
plaintiffs’ class-action definition would include royalty owners in Colorado who claim that
Energen breached its contracts by deducting NGPT from royalty payments—a definition which
fits Plaintiffs. The Anderson class-certification discovery closed on July 27, 2015 and there is
currently a pending motion for class certification in that case.
III.

Analysis
As a preliminary matter, this Court will not, at this stage of the proceedings, use the

“first-filed rule” to dismiss Plaintiffs’ claims nor stay it until the Anderson litigation is
completed. Plaintiffs are not the same parties as the Anderson plaintiffs, the contracts are
different, the locations of the breach are different, and from the vantage point of this Court, it is a
bit unclear precisely what claims are pending in the Anderson proceeding.
However, because the Anderson plaintiffs have engaged in extensive class-certification
discovery and proposed a class that will cover Plaintiffs—or at least some of Plaintiffs’ claims—
this Court will stay the current action until the New Mexico district court has had a chance to
rule on the class certification. New Mexico obtained jurisdiction over the class issue earlier than
the filing date in this Court. If the New Mexico district court grants certification over Colorado
royalty-holders’ NGPT claims, then Plaintiffs could have adequate relief in that court or they
could decide to opt out of the class in the Anderson litigation (the proposed Anderson class is a
Rule 23(b)(3) class from which Plaintiffs could elect to opt out). However, it at least appears to
this Court at this time that the Anderson class could comprehensively dispose of the litigation
and avoid piecemeal litigation. See State Farm, 601 F.2d at 1155. If the New Mexico district
court does not grant class certification, the class certification is limited, the district court
excludes Colorado royalty-holders’ NGPT claims from the class certification, or if Plaintiffs opt

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out of the Anderson class, then Plaintiffs will have their day in Colorado district court. Because
there are still uncertainties about whether the Anderson class would cover all of Plaintiffs’
claims, the parties are ordered to brief this Court on developments in Anderson after the class
certification is obtained in that court.
IT IS THEREFORE ORDERED THAT Defendant’s Motion to Dismiss or Stay Litigation is
GRANTED IN PART to the extent it stays the case until the New Mexico district court rules on
the Anderson plaintiffs’ class certification and DENIED IN PART to the extent it seeks to
dismiss this case under the “first-filed rule.”
IT IS FURTHER ORDERED THAT the parties shall file status reports in six months from the
date of this order or within thirty (30) days after the United States District Court for the District
of New Mexico’s decision regarding the class certification motion in the New Mexico Anderson
action, whichever occurs first. If the class is certified in Anderson, the parties’ status reports
should discuss to what extent the Anderson class would cover Plaintiffs’ claims in this case. If
the Anderson class does not cover the entirety of Plaintiffs’ claims, the parties should discuss
whether res judicata affects the claims in this Court not covered in Anderson and whether
Plaintiffs could bring the non-covered claims in Colorado if they decide to join the Anderson
class (see, e.g., Restatement (Second) of Judgments § 24).
IT IS SO ORDERED.

Dated this

7th

day of

December

, 2015.

BY THE COURT:
s/ David M. Ebel
DAVID M. EBEL
U. S. CIRCUIT COURT JUDGE

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