Slamon v. Carrizo (Marcellus) LLC et al

Filing 158

ORDER granting in part and denying in part 96 Motion to Certify Class. See Order for full details. Signed by Honorable Robert D. Mariani on 5/18/20 (jam)

Case 3:16-cv-02187-RDM Document 158 Filed 05/18/20 Page 1 of 4

THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
JANIE SLAMON, as Executrix of the
Estate of James Slamon, and
ERIC LEWIS, on behalf of themselves
and all others similarly situated
v.

Plaintiffs,

CARRIZO (MARCELLUS) LLC,
RELIANCE MARCELLUS II, LLC,
RELIANCE HOLDINGS USA, INC.,
BKV OPERATING LLC, and
BKV CHELSEA LLC
Defendants.

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3:16-CV-2187
(JUDGE MARIANI)

ORDER
AND NOW, THIS 18TH DAY OF MAY, 2020, upon consideration of Plaintiffs’ Motion
for Class Certification (Doc. 96) and the parties’ briefs and exhibits, and all other relevant
documents of record, for the reasons set forth in this Court’s accompanying memorandum
opinion, IT IS HEREBY ORDERED THAT Plaintiffs’ Motion is GRANTED IN PART AND
DENIED IN PART as follows:
1. Plaintiffs’ Motion for Class Certification is GRANTED with respect to the “No
Deductions” Class, which is hereby certified pursuant to Federal Rule of Civil
Procedure 23(a) and 23(b)(3) as follows:
All persons or entities within the Commonwealth who are, or have been,
a royalty owner under a Paid Up Oil and Gas Lease with or assigned to
one or more of Defendants where that lease expressly prohibits the

Case 3:16-cv-02187-RDM Document 158 Filed 05/18/20 Page 2 of 4

deduction of post-production expenses when calculating royalty
amounts due, and where (a) natural gas has been produced under the
lease, (b) the person or entity has received one or more royalty
payments under the lease, and (c) the person or entity has not released
their claims in this matter.
2. Plaintiffs’ Motion for Class Certification is GRANTED as to the “Highest Price” Class,
which is hereby certified pursuant to Federal Rule of Civil Procedure 23(a) and 23(b)(3)
as follows:
All persons or entities within the Commonwealth who are, or have been,
a royalty owner under a Paid Up Oil and Gas Lease with or assigned to
one or more of Defendants where that lease expressly provides that the
value of natural gas on which lessee owes a royalty percentage is,
absent application of a contractual proviso, the greater of the NYMEX
spot price and/or the prevailing local market price, or the price at which
the gas is sold, and where (a) natural gas has been produced under the
lease, (b) the person or entity has received one or more royalty
payments under the lease, and (c) the person or entity has not released
their claims in this matter.
3. Plaintiffs’ Motion for Class Certification is DENIED as to an “Implied Duty” Class
consisting of:
All persons or entities within the Commonwealth who are, or have been,
a royalty owner under a Paid Up Oil and Gas Lease with or assigned to
one or more of Defendants where (a) natural gas has been produced
under the lease, (b) the person or entity has received one or more
royalty payments under the lease, and (c) the person or entity has not
released their claims in this matter.
4. Plaintiffs’ Motion for Class Certification is DENIED as to all Classes seeking class
certification pursuant to Federal Rule of Civil Procedure 23(b)(2).

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5. The following causes of action set forth in Counts II and IV of Plaintiffs’ Second
Amended Complaint (Doc. 107) constitute the claims certified for class action:
a. Count II for breach of contract against all Defendants brought on behalf of the
“No Deductions Class” and “Highest Price Class”.
b. Count IV requesting an accounting against all Defendants brought on behalf of
the “No Deductions Class” and “Highest Price Class”.
6. Defendants’ affirmative defenses raised in their Answers which are responsive to the
above-stated class claims are further certified for class action.
7. The following common issues and defenses thereto with respect to Counts II and IV
of the Second Amended Complaint are subject to class treatment:
a. With respect to the “No Deductions Class” the common issues are: (1) whether
Defendants’ royalty calculation method deducted post production costs from
the royalties paid to lessors, and (2) if so, whether the deduction of post
production costs violated a prohibition against such deductions in the lease.
b. With respect to the “Highest Price” Class, the common issue is whether the
Defendants compared the NYMEX spot price or local market price to the price
received in order to pay lessors the highest of these prices.
c. Both classes must also determine the common issue of whether the
transactions between Defendants and DTE or Twin Eagle were, in fact, armslength sale transactions with unaffiliated third parties subject to the contractual
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proviso pursuant to which the royalty the lessor receives for the gas production
is a percentage of the price paid to the lessee.
8. Plaintiffs Janie Slamon, as Executrix of the Estate of James Slamon, and Eric Lewis
are hereby appointed as the representatives of the “No Deductions” and “Highest
Price” Classes.
9. The law firms of LeVan Law Group LLC and Berger Montague P.C. are hereby
appointed as Class Counsel for the “No Deductions” and “Highest Price” Classes
pursuant to Federal Rule of Civil Procedure 23(g).
10. Notice to the Classes shall be disseminated in accordance with a notice program to
be submitted for the Court’s review and approval within 45 days of the date of this
Order. The notice to be disseminated shall conform to the requirements of Federal
Rule of Civil Procedure 23(c)(2). Class counsel shall submit a proposed Order to the
Court setting forth the provisions of the notice to be sent to class members which shall
comply with all of the requirements of Rule 23(c)(2).

_s/ Robert D. Mariani____________
Robert D. Mariani
United States District Judge

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