White et al v. West Publishing Corporation et al

Filing 58

DECLARATION of James Hough in Support re: 45 MOTION for Summary Judgment.. Document filed by Reed Elsevier Inc.. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C, # 4 Exhibit D, # 5 Exhibit E, # 6 Exhibit F, # 7 Exhibit G, # 8 Exhibit H, # 9 Exhibit I, # 10 Exhibit J, # 11 Exhibit K, # 12 Exhibit L, # 13 Exhibit M, # 14 Exhibit N, # 15 Exhibit O, # 16 Exhibit P, # 17 Exhibit Q, # 18 Exhibit R, # 19 Exhibit S, # 20 Exhibit T, # 21 Exhibit U, # 22 Exhibit V, # 23 Exhibit W)(Hough, James)

Case 5:07-cv-00798-L Document 189 Filed 04/13/10 Page 1 of 11

IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF OKLAHOMA
LADENE RAMSEY BEER, and
KATHERINE K. BOECK, (collectively
“Plaintiffs”) on behalf of themselves and
others similarly situated,
Plaintiffs,
vs.
XTO ENERGY, INC. f/k/a CROSS
TIMBERS OIL COMPANY, a Delaware
Corporation (“XTO”),
Defendant.

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Case No. CIV-07-798-L

ORDER
Plaintiffs Ladene Ramsey Beer and Katherine K. Boeck are royalty owners in
two wells operated by defendant, XTO Energy, In (“XTO”). Beer, as trustee, owns
c.
a royalty interest in the Fern Parkes #1 well, located in Texas County, Oklahoma.
Boeck owns a royalty interest in the Leona Woods #1-17 well, also located in Texas
County, Oklahoma. Both wells produce gas from the Chase formation in the
Guymon-Hugoton field. On October 4, 2004, plaintiffs filed this class-action lawsuit
in the District Court of Texas County, Oklahoma, seeking an accounting on behalf
of themselves and members of the class. After the Petition was twice amended in
state court, defendant removed the action to this court on July 19, 2007 pursuant to
the Class Action Fairness Act. On March 20, 2009, the court certified this case as
a class action. Beer v. XTO Energy, Inc.Case No. CIV-07-798-L, order at 17 (W.D.
,
Okla. Mar. 20, 2009) (Doc. No. 75). T wo subclasses comprised the class. Both

Case 5:07-cv-00798-L Document 189 Filed 04/13/10 Page 2 of 11

subclasses consisted of non-governmental royalty owners who “received payments
based on production from an X

TO-operated well for which the production is

processed in Timberland’s Tyrone natural gas processing plant.” Id.

The only

difference between the subclasses was the physical location of the producing wells.
The Oklahoma subclass consisted of m

embers whose wells were located in

Oklahoma; the Kansas subclass included members whos e wells were located in
Kansas.
Shortly after the court issued its order certifying this matter as a class action,
plaintiffs filed a motion for summary judgment solely on behalf of the named plaintiffs
in their individual capacities and not as class representatives. Plaintiffs’ Combined
1
Motion for Summary Judgment for Plaintiffs, Beer and Ramsey [sic] (Doc. No. 81).

On February 5, 2010, the court issued an order granting plaintiffs’ motion with
respect to the claims of Beer and Boeck in their individual capacities . Beer, order
at 10 (W.D. Okla. Feb. 5, 2010) (Doc. No. 148). The court specifically noted that it
was expressing no opinion on t he class claims as they were not before the court.
Id.
On the day before motions for summary judgment were due under the
scheduling order, pl aintiffs filed a motion for leave to file a second motion for
summary judgment. As the motion indicated that defendant objected, the court
1

The title of the motion is incorrect. T
he motion should have been titled “Plaintiffs’
Combined Motion for Summary Judgment for Plaintiffs, Bee r and Boeck”. There is no individual
plaintiff named “Ramsey”.

2

Case 5:07-cv-00798-L Document 189 Filed 04/13/10 Page 3 of 11

called for an expedited response from defendant. Beer order at 1 (W.D. Okla. Feb.
,
3, 2010) (Doc. No. 147). Before the court could issue thi

s order and before

defendant filed its response to the motion for leave, plaintiffs filed their second
motion for summary judgment without leave. The second motion sought summary
judgment solely on the issue of damages for the class. After receiving defendant’s
response, the court issued an order permitting the filing of plaintiffs’ second motion
for summary judgment. Beer, order at 2 (W.D. Okla. Feb. 8, 2010) (Doc. No. 154).
The court noted:
The filing of more than one motion for summary judgment
in this case is not an effi cient use of counsels’ and the
court’s time; one motion for summary judgment on behalf
of the class would have been a more ex peditious use of
judicial resources. Nonetheless, while the court does not
countenance plaintiffs’ litigation tactics, it finds a motion for
summary judgment on behalf of the class might assist the
court and the parties in narrowing the issues for trial.
Id. at 1-2. On March 16, 2010, the court issued an order denying plaintiffs’ second
motion for summary judgment. The court found the motion was premature as
plaintiffs had not sought, nor had there been a ruling on the issue of liability with
respect to the class. Beer, order at 4 (W.D. Okla. Mar. 16, 2010) (Doc. No. 182).
In addition, the court issued an order for plaintiffs to show cause why

they

should not be removed as representatives for the class and why class counsel
should not be removed as attorney s for the class. Id. at 5. The court noted its
“obligation ‘to monitor the appropriateness

3

of class certification throughout the

Case 5:07-cv-00798-L Document 189 Filed 04/13/10 Page 4 of 11

proceedings and to modify or decertify a class at any time before final judgment’
should the circumstances warrant.” Id.

at 4-5 ( quoting In re Integra Realty

Resources, Inc., 354 F.3d 1246, 1261 (10th Cir. 2004)). The court held the show
cause hearing on April 2, 2010. Based on the parties’ arguments and
representations at the hearing and the entire record in this case, the court makes the
following findings.
Rule 23(c) provides that “[a]n order that gr ants or denies class certification
may be altered or amended before final judgment.” Fed. R. Civ. P. 23(

c)(1)(C).

Indeed, the court has a continuing obligationto monitor a class action to ensure that
the absent class members are being properly represented by the named plaintiffs
and class counsel. See In re Integra Realty Resources, Inc., 262 F.3d 1089, 1112
(10th Cir. 2001).
This requirement is particularly important because the due
process rights of absentee class members may be
implicated if they are bound by a final judgment in a suit
where they were inadequately represented by the named
plaintiff. An essential ingredient of this requirement is that
the class representative’s attorneys be qualified to
vigorously and adequately prosecute the int erests of the
class.
Key v. Gillette Co., 782 F.2d 5, 7 (1st Cir. 1986) (
cited with approval in In re Integra
Realty Resources, Inc., 262 F.3d at 1112).
The court notes that it had serious concerns about the adequacy of
representation in this case as early as the class certification hearing when the

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Case 5:07-cv-00798-L Document 189 Filed 04/13/10 Page 5 of 11

named plaintiffs failed to attend the hearing and failed to present any evidence with
respect to the adequacy issue. The court nonetheless permitted plaintiffs to
supplement the record with “what they consider[ed] to be appropriate and sufficient
evidence to establish both components of the adequacy-of-representation prong.”
Beer, order at 4 (W.D. Okla. Dec. 3, 2008) (D No. 57). While the court ultimately
oc.
certified a class in this case, its misgivings about the adequacy of representation
continued to grow as the litigation pr ogressed, culminating in the court’s reluctant
decision that decertification is required as neither counsel nor the named plaintiffs
are adequately protecting the interests of the absent class members.
This conclusion is based on a number of factors. First, by their actions, the
named plaintiffs have demonstrated an ambivalent attitude toward the class. Their
failure to attend the class certification hearing evidenced indifference, which “as well
as antagonism can undermine the adequacy of representation.” Lyons v. GeorgiaPacific Corp. Salaried Employees Ret. Plan, 221 F.3d 1235, 1253 (11th Cir. 2000),
cert. denied, 532 U.S. 967 (2001). While they attended the judicial settlement
conference and the show cause hearing, hose appearances were pursuant to court
t
order. In addition, plaintiffs appeared to pl their own interests ahead of the class
ace
when they sought summary judgment solely on their own behalf and not on behalf
of the class. The fact that the court has granted that motion for summary judgment
calls into question whether plaintiffs maintain a sufficient interest in the class to
ensure their vigorous representation. Fur thermore, plaintiffs have shown little
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inclination to protect the interests of he Kansas subclass. They declined the court’s
t
invitation to amend the complaint to include a representative plaintiff from Kansas2
and failed to seek a liability determination on behalf of the Kansas subclass. Even
when plaintiffs sought summary judgment for damages, the briefing with respect to
the Kansas subclass was woefully inadequate.Plaintiffs withheld any major analysis
of Kansas law until they filed their reply brief in support of the second motion for
summary judgment,3 and even then they misrepresented Kansas law by citing
language in a dissenting opinion as the holding in the case.4
Moreover, to the extent plaintiffs seek to resurrect a claim for payment for
natural gas liquids (“NGLs”),5 they also resurrect the commonality and typicality
issues subsumed in that claim. At the class certification stage, defendant argued
plaintiffs were not adequate representatives because their claims were not common
to or typical of the class. This argument was based in part on the fact that the gas

2

See Beer, order at 4 (W.D. Okla. Dec. 3, 2008) (Doc. No. 57).

3

At the show cause hearing, plaintiffs’ counsel claimed the
Kansas subclass was addressed
at pages 4, 5, 6, 13, and 14 of plaintiffs’ second motion for summary judgment. The references to
Kansas law on these five pages, however, constitu only three paragraphs, two of which concern
te
marketability and the duty to market, not whether Kansas
would prohibit computing royalty
payments based on sales between controlled and affiliated companies. Plaintiffs’ Motion for
Summary Judgment on Damages at 4, 5, 6, 13, 14 (Doc. No. 144). The one paragraph that does
discuss non-arms-length sales makes a leap of logic with no analysis. Id. at 5-6.
4

See Beer, order at 6 n.8 (Doc. No. 182).

5

In the second motion for summary judgment, plaintiffs
sought damages for the class based
on calculations that in cluded NGL proceeds. See Plaintiffs’ Motion for Summary Judgment on
Damages at 13-14 (Doc. No. 144); Exhibit 16 to Plaintiffs’ Motion for Summary Judgment on
Damages at 5-7.

6

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produced from plaintiffs wells is “dry” gas, that is, gas with a lower British Thermal
Unit content than gas produced from other class members’ wells. “Wet” gas has
more NGLs entrained in the gas stream; thus, members whose wells produce wet
gas would arguably be entitled to greater compensation than plaintiffs. The court did
not need to resolve this potential conflict,

6

however, because plaintiffs’ c ounsel

represented to the court and opposing counsel during the class certification hearing
that the class was “not asking for a portion of the liquids”. Transcript of Hearing on
Class Certification at 101. Counsel made this statement in the course of objecting
to defense questioning about individual accounti issues that would arise if plaintiffs
ng
sought proceeds from the sale of NGLs, an issue that went directly to defendant’s
commonality and typicality argument. Counsel for plaintiffs objected “to this line of
questioning” on the ground that defendant was “asking hypotheticals on claims not
asserted by plaintiffs.” Id. In response to these statements, defendant’s attorney
abandoned this line of questioning. At the conclusion of the colloquy between the
court and counsel for plaintiffs, both the court and counsel for defendant understood
that plaintiffs had withdrawn their claim for compensation based on the NGLs
7
extracted at defendant’s gas processing plant. Plaintiffs’ attempt to revive this issue

6

It is clear from defendant’s opening statement during the class certification hearing that it
considered this conflict a major impediment to certification. See Transcript of Hearing on Class
Certification at 28-9 (Doc. No. 87).
7

Defendant’s counsel made this clear in hi s closing statement. Transcript of Hearing on
Class Certification at 307-8 (Doc. No. 88). That the court had reached the identical conclusion was
reflected in its ruling on the motion for cl ass certification. Beer , order at 2 n.1 (Doc. No. 75).
Although the court clearly stated that plaintiffs had withdrawn this claim, neither plaintiffs nor their

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Case 5:07-cv-00798-L Document 189 Filed 04/13/10 Page 8 of 11

at this late date demonstrates either a fundamental misunderstanding of their
counsel’s prior representations and the court’s findings based on those
representations or an attempt to sandbag the court and opposing counsel.
This imbroglio, however, cannot be laid to rest solely at the feet of plaintiffs.8
Counsel is also responsible for the confusion because they, at best, failed to correct
the court’s understanding and, at worst, m isrepresented plaintiffs’ position on this
issue. Either way, counsel’s performance with respect to the liquids issue is
deficient. If, as the court found, counsel withdrew the liquids issue during the class
certification hearing, they failed to protect the interests of class members who might
have been enti tled to a greater recovery than plaintiffs.

9

resurrect the issue might be beneficial to those class mem

While their attempt to
bers, it is unfair to

attorney informed the court that – in their minds – the court was mistaken.
8

Indeed, it is clear to the court that the major blame for the posture of this case lies with
class counsel, and not with plaintiffs, as it was counsel who made the relevant litigation decisions
and who prepared and filed papers with the court.
9

Indeed, defendant argued this very point during closing argument at the class certification
hearing:
Couple that with the shifting nature of this claim, they apparently
attempted to sacrifice, though someof the parties were potentially in
the claim, filed under their class action in which they were see king
to recover percentages of the liquids or values for the liquids
obtained at the -- recovered at the Tyrone plant by just saying, well,
we're abandoning that claim. This is a cla ss action. They have
responsibilities to the class. There has been no demonstration that
anybody is representing the class, that nobody is speaking for the
interest of the class. The representatives are not here and that
counsel can't become a member, a de facto member, to represent
the class.
Transcript of Class Certification Hearing at 307-8.

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Case 5:07-cv-00798-L Document 189 Filed 04/13/10 Page 9 of 11

defendant who thought the issue was settled. At this stage of the proceedi

ngs,

however, the court could not allow a liquids claim to go forward without reopening
discovery and possibly reexamining the commonality and typicality factors.
In addition, the court has taken plai ntiffs’ counsel to task on a number of
occasions for failing to follow the court rules and for plaintiffs’ litigation strategy.

10

Likewise, the court has felt compelled on more than one occas ion to note “certain
fallacies advanced by plaintiffs in their briefs. Beer, order at 2 (W.D. Okla. Feb. 5,
2010) (Doc. No. 150).11 The court and the absent class members must be able to
10

See, e.g., Beer, order at 1 (W.D. Okla. May 7, 2008) (Doc. No. 26) (failure to comply with
LCvR 37.1); order at 1 (W.D. Okla. Jan.9, 2009) (Doc. No. 63) (same); order at 2, 3 (Feb. 5, 2010)
(Doc. No. 149) (filing serial Rule 30(b)(6) notices rather than a motion to compel); order at 3 (Feb.
5, 2010) (Doc. No. 150) (waiting nearly two years to contest a claim of privilege); order at 1 (W.D.
Okla. Feb. 8, 2010) (Doc. No. 154) (filing two motions for summary judgment).
11

In its ord er denying plaintiffs’ third motion to compel, the court noted the following
misstatements:
First, plaintiffs’ contention that defendant has a duty to supplement
testimony given pursuant to a Rule 30(b)(6) notice is incorrect. . . .
Second, plaintiffs’ insistence that Howe ll v. Texaco Inc., 112 P.3d
1154 (Okla. 2004), imposes an independent duty on defendant to
calculate royalty payments under various scenarios is unsupported
by the case. Third, plaintiffs’ assertion that X had a duty to move
TO
for a protective order with respect to damages
calculations
performed by Bennie Kniffen at the request of counsel is off base.
. . . Finally, the court is mystified by plaintiffs’ assertion that they
“have NOT dismissed claims related to liquids.” . . . While plaintiffs
are technically correct that they have not filed a motion dismissing
claims in their Second Am ended Petition relating to natural gas
liquids, it is disingenuous to imply that issues relating to liquids
remain part of their claim for an accounting and any subsequent
damages.
Beer, order at 2-3 (Do c. No. 150) (footnotes omitted). Similarly, in its order denying plaintiffs’
second motion for summary judgment, the court noted:
Plaintiffs’ misrepresentation of the record borders on the vexatious.

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rely on counsel. Based on counsel’s performance, however, the court has lost its
confidence in their ability to represent the class.
In sum, based on the record as a whole, the court regretfully concludes that
decertification is warranted. 12 Given the posture of this case and the court’s
obligation to absent members, the court failsto see how it could continue this matter
as a class action. To do so would be unfair not only to absent class members who
could be bound by possible adverse res judicata effects of this case, but

also to

defendant because absent class members could attack the legitimacy of the class
certification based on adequacy grounds. In addition, to the extent absent class
members have a legitimate claim for recovery of liquids proceeds, they would be
denied that recovery based on counsel’s withdrawal of that claim during the class

For example, plaintiffs’ assertion that their first summary judgment
motion sought a liabilitydetermination on behalf of the class is belied
by their own statements. In addition, plaintiffs misreprese nt the
position taken by their attorney at the class certification hearing.
Citing a portion of t he class certification hearing transcript out of
context, plaintiffs categorically state, “XTO asserts that Plaintiffs
abandoned any claim for liquids, and that is simply un true.” An
examination of the transcript, however, demonstrates that plaintiffs’
counsel categorically disclaimed any interest in proceeds from the
downstream sale of natural gas liquids (“NGLs”).
Beer, order at 4 n.5 (Doc. No. 182) (citations omitted).
12

The court is mindful of case law that holds a district court contemplating decertification of
a class based on inadequacy of the representative plaintiff mustnormally allow a reasonable time
to allow substitution or intervention by other classmembers. See, e.g., Birmingham Steel Corp. v.
Tennessee Valley Auth., 353 F.3d 1331, 1342 (11th Cir. 2003). In cases where class counsel is
also deemed inadequate and issues have ari sen as to commonality and typicality, however,
immediate decertification is not an abuse of discretion. See Culver v. City of Milwaukee, 277 F.3d
908, 913 (7th Cir. 2002); Key, 782 F.2d at 7; Kaplan v. Pomerantz, 132 F.R.D. 504, 510-11 (N.D.
Ill. 1990); Key v. Gillette Co., 104 F.R.D. 139, 140-41 (D. Mass. 1985), aff’d Key, 782 F.2d at 7.

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certification hearing. Counsel’s actions and failures to act cannot be undone. The
court bemoans the waste of plaintiffs’, defendant’s, and judicial resources, but finds
it has no choice but to decertify the class in this action. The claims of the class are
therefore dismissed without prejudice to refiling either by individual members of the
class or as a class action. See Elliott Indus. Ltd. P’ship v. BP Am erica Prod. Co.,
407 F.3d 1091, 1106 (10th Cir. 2005). Plaintiffs are directed to post a copy of this
order on the class website, www.xtoclass.com., and to send the attached notice to
all members of the c lass within 20 days of the date of this order. To the extent
plaintiffs have e-mail addresses for class members, the notice may be sent to those
members via electronic mail rather than through the United States Postal Service.
Plaintiffs shall file a not ice certifying their compliance with the notice requirement
within 30 days of the date of this order.
As the court has granted summary judgment to the named plaintiffs, it will
enter judgment in their favor. The parties ar e directed to confer and to submit an
agreed judgment to the court in favor of the named plaintiffs with damages
calculated through March 31, 2010. The agreed judgment shall be submitted to the
court no later than May 5, 2010.
It is so ordered this 13th day of April, 2010.

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