Dvorin et al v. Chesapeake Exploration LLC et al

Filing 44

Memorandum Opinion and Order: The plaintiffs' motion to certify a class pursuantto Rule 23(a)(1)-(4) and (b)(3) is DENIED. (Ordered by Senior Judge A. Joe Fish on 11/13/2013) (tla)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION

SANFORD DVORIN, ET AL.,
Plaintiffs,
VS.
CHESAPEAKE EXPLORATION, LLC,
ET AL.,
Defendants.

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CIVIL ACTION NO.
3:12-CV-3728-G

MEMORANDUM OPINION AND ORDER
Before the court is the plaintiffs’ motion for class certification (docket entry
37). For the reasons stated below, the motion is denied.
I. BACKGROUND
A. Factual Background
This suit concerns royalty payments under oil and gas leases. The plaintiffs,
Sanford Dvorin and Melissa Thornton, are citizens and residents of Texas.
Complaint ¶¶ 2-3, 7 (docket entry 1). The defendants, Chesapeake Exploration, LLC
and Chesapeake Operating, Inc. (“Chesapeake” or the “defendants”), are both

incorporated and located in Oklahoma. Id. ¶¶ 4-5. The plaintiffs own royalty
leasehold interests with Chesapeake through assigned interests from PFM, LLC, the
company that initially negotiated the leases with the plaintiffs. Id. ¶¶ 10-11.
Chesapeake began production through these leases in 2008. Id. ¶ 11.
Chesapeake has signed leases with thousands of other landowners throughout
North Texas. See Appendix in Support of Defendants’ Response and Objection to
Motion for Class Certification (“Chesapeake Appendix”) at App 9-10 (docket entry
39). After examining many of these leases through discovery, the plaintiffs have
identified three groups of leases that contain similar language in their royalty
provisions concerning post-production costs. See Appendix in Support of Motion for
Class Certification (“Plaintiffs’ Appendix”) at App 6 (docket entry 37-1). The
plaintiffs label these Groups A, B, and C. Motion for Class Certification at 3 (docket
entry 37). The royalty provisions of the leases in Group A contain the following
language:
Lessee shall pay to Lessor the following royalties, which
shall be free of all costs of any kind, including, but not
limited to, costs of gathering, production, transportation,
treating, compression, dehydration, processing, marketing,
trucking or other expense, directly or indirectly incurred by
Lessee, whether as a direct charge or reduced price or
otherwise. In this regard, Lessee agrees to bear one
hundred percent (100%) of all costs and expenses incurred
in rendering hydrocarbons produced on or from the lease
premises marketable and delivering the same into the
purchaser’s pipeline for immediate transportation to an
end user or storage facility.
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Plaintiffs’ Appendix at App 19 ¶ 4. There are 44 leases within Group A. Motion for
Class Certification at 3.
The Group B leases, which include the plaintiffs’ leases, contain a provision
that states:
Lessee shall pay to Lessor all royalties, free of all costs of
any kind, including, but not limited to, costs of gathering,
production, transportation, treating, compression,
dehydration, separating, processing, marketing, trucking or
other pre and post production expense, directly or
indirectly incurred by Lessee, whether as a direct charge or
a reduced price or otherwise (such prohibited costs are
herein referred to as “PP Costs”). In this regard, Lessee
agrees to bear one hundred percent (100%) of all costs and
expenses incurred in rendering the oil, gas, hydrocarbon
and non-hydrocarbon substances produced from the leased
premises or lands pooled therewith marketable and
delivering the same into the purchaser’s pipeline for
immediate transportation to an end user or storage facility.
Plaintiffs’ Appendix at App 46 ¶ 19. Group B consists of seven leases. Motion for
Class Certification at 4.
Lastly, the Group C leases state:
Lessee shall pay to Lessor the following royalties, which
shall, except for Lessor’s share of production severance
taxes, be free of all costs of any kind, including but not
limited to, costs of gathering, production, transportation,
treating, compression, dehydration, processing, marketing,
trucking or other expense, directly or indirectly incurred by
Lessee, whether as a direct charge or reduced price or
otherwise. In this regard, Lessee agrees to bear one
hundred percent (100%) of all costs and expenses incurred
in rendering oil or gas produced on or from the leased

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premises marketable and delivering same into the
purchaser’s or transporter’s trucks or pipeline.
Plaintiffs’ Appendix at App 56 ¶ 5; Motion for Class Certification at 4-5. Group C is
comprised of nineteen leases. Motion for Class Certification at 4.
On August 1, 2011,* Chesapeake sent a letter to some North Texas
leaseholders, including the plaintiffs and the other leaseholders within Groups A, B,
and C. Motion for Class Certification at 1. The plaintiffs refer to this as the “Dear
Owner Letter.” Id. The letter stated that a “lengthy audit process” had “established
that while we have not been deducting certain post-production costs, such as
gathering, compression and transportation from royalty payments, these costs are
properly allowable according to the terms of certain leases.” Plaintiffs’ Appendix at
App 3. It then informed the recipients of the letter that “[y]our lease is among those
that allow for such deductions.” Id. Chesapeake advised the leaseholders that it
would begin subtracting those deductions beginning with the leaseholders’ July 2011
royalty checks. Id.
The plaintiffs allege that following this letter, the defendants breached their
leasehold agreements by deducting post-production costs from royalty payments in
violation of the provisions of the lease agreements stating that the defendants would

*

In their motion, the plaintiffs twice refer to a letter that was sent on
“August 1, 2001.” See Motion for Class Certification at 1. However, since the letter
that they cite in their appendix is dated August 1, 2011, the court will assume that
“2001” was a typographical error. See Plaintiffs’ Appendix at App 3.
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bear 100% of post-production costs. Complaint ¶ 13. In addition to seeking
recovery for themselves, the plaintiffs wish to certify a class to obtain relief on behalf
of Groups A, B, and C and any other similarly situated Chesapeake leaseholders who
signed leases with identical or substantially similar post-production cost provisions.
See id. ¶ 22. Specifically, they seek to certify a class consisting of:
All persons or entities entitled to payment of a lessor’s or
owner’s royalty under oil and gas leases held by
Chesapeake Exploration LLC or Chesapeake Operating,
Inc., as lessees, (“Chesapeake”) and Chesapeake’s
predecessors and successors, for lands or mineral estates
located in Denton, Wise, Cooke, Erath, Hill, Hood, Dallas,
Palo Pinto, Parker, Johnston [sic] and/or Tarrant counties,
Texas, which have produced natural gas on or after July 1,
2011 (but prior to the date of a class notice in this action)
(1) to whom Chesapeake sent the August 1, 2011 Dear
Owner Letter from Chesapeake Vice-President, Land
Administration, David T. Mobley regarding Adjustment in
future royalty calculations, or a letter from Chesapeake
containing the same material information, and (2) whose
leases contain royalty payment clauses stating that royalties
shall be calculated and paid free of post-production costs or
expenses.
Excluded from the class are: (1) the Mineral Management Service (Indian
tribes and the United States), and (2) defendants, their affiliates, predecessors,
employees, officers and directors. Motion to Certify Class at 8.
B. Procedural Background
The plaintiffs filed their complaint against Chesapeake on September 14,
2012. See generally Complaint. After being served on October 4, 2012, see Summons

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Returned as Executed (docket entries 7-8), the defendants filed their answer on
November 5, 2012. See generally Answer (docket entry 12). The parties were given
until March 31, 2013, to conduct discovery related to whether the case is certifiable
as a class action, and the plaintiffs were ordered to file a motion for class certification
by April 15, 2013. See Order of November 28, 2012 (docket entry 19). After two
extensions, see Orders of April 5 and May 30, 2013 (docket entries 28, 32), the
plaintiffs filed their motion for class certification on July 19, 2013. See generally
Motion to Certify Class. Chesapeake filed its response on August 12, 2013, see
Response and Objection to Motion for Class Certification (“Chesapeake Response”)
(docket entry 38), and the plaintiffs filed a reply on August 27, 2013. See Reply in
Support of Motion for Class Certification (“Plaintiffs’ Reply”) (docket entry 43).
The matter is now ripe for decision.
II. ANALYSIS
A. Rule 23 Class Certification Standard
The plaintiffs seek to certify a class under Federal Rule of Civil Procedure
23(a)(1)-(4) and (b)(3). Motion for Class Certification at 7. Rule 23(a) requires the
party seeking certification to establish that:
(1) the class is so numerous that joinder of all members is
impracticable;
(2) there are questions of law or fact common to the class;

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(3) the claims . . . of the representative parties are typical
of the claims . . . of the class; and
(4) the representative parties will fairly and adequately
protect the interests of the class.
FED. R. CIV. P. 23(a)(1)-(4). If an action satisfies the prerequisites of Rule 23(a), the
court then must determine whether “the questions of law or fact common to class
members predominate over any questions affecting only individual members, and that
a class action is superior to other available methods for fairly and efficiently
adjudicating the controversy.” FED. R. CIV. P. 23(b)(3).
The Supreme Court has held that “[t]he class action is ‘an exception to the
usual rule that litigation is conducted by and on behalf of the individual named
parties only.’” Wal-Mart Stores, Inc. v. Dukes,

U.S.

, 131 S.Ct. 2541, 2550

(2011) (quoting Califano v. Yamasaki, 442 U.S. 682, 700-01 (1979)). “In order to
justify a departure from that rule, ‘a class representative must be part of the class and
possess the same interest and suffer the same injury as the class members.’” Id.
(quoting East Texas Motor Freight System, Inc. v. Rodriguez, 431 U.S. 395, 403 (1977))
(internal quotation omitted). Moreover, to satisfy the requirements of Rule 23, the
“party seeking class certification must affirmatively demonstrate his compliance with
the Rule -- that is, he must be prepared to prove that there are in fact sufficiently
numerous parties, common questions of law or fact, etc.” Id. at 2551 (emphasis in
original).

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B. The Plaintiffs’ Rule 23 Motion for Class Certification
1. Rule 23(a) Prerequisites for Class Certification
The court has “broad discretion” when deciding whether to certify a class. See
Castano v. American Tobacco Company, 84 F.3d 734, 740 (5th Cir. 1996). That
discretion, however, “must be exercised within the framework of [R]ule 23.” Id.
Therefore, a class “may only be certified if the trial court is satisfied, after a rigorous
analysis, that the prerequisites of Rule 23(a) have been satisfied.” See General
Telephone Company of the Southwest v. Falcon, 457 U.S. 147, 161 (1982).
a. Numerosity
Rule 23(a)(1) states that a class action is proper when “the class is so
numerous that joinder of all members is impracticable.” FED. R. CIV. P. 23(a)(1).
While the number of class members is relevant, numbers alone are not determinative
of the outcome. See Zeidman v. J. Ray McDermott & Co., Inc., 651 F.2d 1030, 1038
(5th Cir. 1981). In addition to considering the number of potential class members,
the court evaluates whether “the geographical dispersion of the class, the ease with
which class members may be identified, the nature of the action, and the size of each
plaintiff’s claim” weigh in favor of certifying a class action. Id. For that reason, the
number of class members that satisfy the numerosity prerequisite has varied in Fifth
Circuit cases. Compare Mullen v. Treasure Chest Casino, LLC, 186 F.3d 620, 624 (5th
Cir. 1999) (affirming certification of a class of 100 to 150 members), cert. denied, 528

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U.S. 1159 (2000), and Jones v. Diamond, 519 F.2d 1090, 1100 n.18 (5th Cir. 1975)
(finding that a class of 48 members satisfied numerosity), with In re TWL Corporation,
712 F.3d 886, 894-95 (5th Cir. 2013) (denying certification to a class of 130
members), Leal v. Paramount Restaurants Group, Inc., No. 2:12-CV-0038-J, 2013 WL
1363616, at *2 (N.D. Tex. April 4, 2013) (Robinson, J.) (refusing to certify a
potential class of at most 33 members), and Simms v. Jones, Nos. 3:11-CV-0248-M,
3:11-CV-0345-M,

F.R.D.

, 2013 WL 3449538, at *9-10 (N.D. Tex. July 9,

2013) (Lynn, J.) (finding that numerosity was not satisfied by a class of up to 40
members).
The plaintiffs in this case propose certifying a class of approximately 43
members. See Motion for Class Certification at 9. They also assert that there could
be other, as-yet unidentified, leaseholders who received the “Dear Owner Letter” and
whose leases contain similar post-production provisions. See Plaintiffs’ Reply at 2.
The court finds this assertion unconvincing, as it is unclear where the plaintiffs think
these other leaseholders might be. Through discovery, the plaintiffs asked
Chesapeake to produce any leases that contained language similar to that in the
plaintiffs’ royalty clauses and that were held by leaseholders who had also received
the “Dear Owner Letter.” See Appendix to Plaintiffs’ Reply in Support of Motion for
Class Certification at App 12 (docket entry 43-1). In response to this request,
Chesapeake produced 3,925 leases. Id. at App 8. After reviewing these leases, the

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plaintiffs were only able to identify 70 leases, held by the 43 proposed class members,
that contained similar post-production-cost clauses. See id. at App 8. If there are no
more than these 70 relevant leases among the many leases produced by Chesapeake
that meet the plaintiffs’ search criteria, it is unclear whence the plaintiffs think more
class members will appear. The court’s numerosity analysis will therefore focus on
the 43 potential class members that the plaintiffs have found. Under Fifth Circuit
precedent, 43 class members is not determinative of the outcome of the numerosity
prerequisite, so the court must turn to other factors to determine the impracticability
of joinder.
The court concludes that the plaintiffs have not shown that their proposed
class is so geographically dispersed and difficult to identify as to render joinder
impracticable. The plaintiffs define the class as those owning “leasehold royalty
interests within Denton, Wise, Cooke, Erath, Hill, Hood, Dallas, Palo Pinto, Parker,
Johnson and/or Tarrant Counties, Texas.” Complaint ¶ 1. The court sees no reason
why the 43 leaseholders owning land in these adjacent counties are so geographically
dispersed as to negatively affect joinder. Furthermore, the plaintiffs have already
identified their 43 potential class members by determining which leaseholders
received the “Dear Owner Letter” and possess leases with substantially similar postproduction-cost provisions, and, as explained above, it does not appear possible for

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them to find any more class members. This factor, too, weighs against finding joinder
impracticable.
Because of the relatively small size of the class, and the lack of either
geographical dispersion of the proposed class members or difficultly in identifying
class members, the court concludes that the plaintiffs have failed to demonstrate that
their proposed class is so numerous as to render joinder impracticable.
b. Commonality
Rule 23(a)(2) requires the plaintiffs to show that “there are questions of law or
fact common to the class.” FED. R. CIV. P. 23(a)(2). The Supreme Court has held
that “[c]ommonality requires the plaintiff to demonstrate that the class members
‘have suffered the same injury.’” Wal-Mart, 131 S.Ct. at 2551 (quoting Falcon, 457
U.S. at 148). That means that the plaintiffs must show more than “merely that they
have all suffered a violation of the same provision of law.” Id. The Court elaborated
with a quote from a recent journal article:
“What matters to class certification . . . is not the raising of
common ‘questions’ -- even in droves -- but, rather the
capacity of a class-wide proceeding to generate common
answers apt to drive the resolution of the litigation.
Dissimilarities within the proposed class are what have the
potential to impede the generation of common answers.”
Id. at 2551 (alteration in original) (emphasis added) (quoting Richard A. Nagareda,
Class Certification in the Age of Aggregate Proof, 84 N.Y.U. L. REV. 97, 132 (2009)).

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Prior to the Supreme Court’s decision in Wal-Mart v. Dukes, “[t]he test for
commonality [was] not demanding.” See Mullen, 186 F.3d at 625. However, the
Fifth Circuit has since noted that Wal-Mart “heightened the standards for
establishing commonality.” See M.D. ex rel. Stukenberg v. Perry, 675 F.3d 832, 839
(5th Cir. 2012). The commonality prerequisite now requires “more than the
presentation of questions that are common to the class.” Id. at 840. It is not
sufficient merely to show that the resolution of one issue “‘will affect all or a
significant number of the putative class members.’” Id. (emphasis omitted) (quoting
Forbush v. J.C. Penney Company, Inc., 994 F.2d 1101, 1106 (5th Cir. 1993) (internal
quotation marks omitted). Instead, under the post-Wal-mart test, “the claims of
every class member must ‘depend upon a common contention . . . of such a nature
that it is capable of classwide resolution -- which means the determination of its truth
or falsity will resolve an issue that is central to the validity of each one of the claims
in one stroke.’” Id. (alteration in original) (quoting Wal-mart, 131 S.Ct. at 2551).
Moreover, “the members of a proposed class do not establish that ‘their claims can
productively be litigated at once’ . . . merely by alleging a violation of the same legal
provision by the same defendant.” Id. (quoting Wal-mart, 131 S.Ct. at 2551).
In this case, the representative plaintiffs are alleging that the defendants
breached their contracts -- and the contracts of the putative class members -- by
deducting post-production costs from royalty payments in violation of the royalty

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clauses of those contracts. Although this appears to present a common question -- did
Chesapeake breach the royalty provisions of the plaintiffs’ contracts by subtracting
post-production costs? -- the real issue in determining commonality is whether
proceeding as a class action will produce a “common answer” to the plaintiffs’
question that helps “drive the resolution of the litigation.” See Wal-Mart, 131 S.Ct.
at 2551.
To determine how to answer the plaintiffs’ proposed common question, the
court must look to Texas law. The Texas Supreme Court has held that “in construing
a written contract, the primary concern of the court is to ascertain the true intentions
of the parties as expressed in the instrument.” Coker v. Coker, 650 S.W.2d 391, 393
(Tex. 1983). The Court further states that “courts should examine and consider the
entire writing in an effort to harmonize and give effect to all the provisions of the
contract so that none will be rendered meaningless.” Id. (emphasis in original).
Furthermore, “[n]o single provision taken alone will be given controlling effect;
rather, all the provisions must be considered with reference to the whole instrument.”
Id.
The court concludes that there are significant differences between the leases of
the proposed class members that make answering the question of whether
Chesapeake violated the royalty provisions under Texas law a highly individualized
inquiry. While it may be true that the specific portions of the royalty provisions

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highlighted by the plaintiffs are substantially the same, the court is required to view
the contracts as a whole, and should not give a single provision “controlling effect.”
See Coker, 650 S.W.2d at 393. Accordingly, the contracts in the plaintiffs’ A, B, and
C groups can be further broken down based on clauses that speak to elements such as
“the point of sale” and “cost at the well” that differ, and in some instances are not
included, in many of the contracts. See Chesapeake Response at 15-17. Other leases
contain clauses limiting the amount that Chesapeake pays to lessors for their share of
gas to not “more than the price paid [Chesapeake] for [Chesapeake]’s share of gas.”
Id. at 15. Furthermore, April Smith, an assistant controller in Chesapeake’s
accounting department, testified that Chesapeake does not subtract any postproduction costs at all from royalties under some of the leases. See Chesapeake
Appendix at App 11-13.
The plaintiffs insist that the differences between certain clauses in each lease’s
royalty provision are irrelevant, as their claims focus solely on the portions of the
royalty provisions related to post-production costs. See Plaintiffs’ Reply at 4-6.
However, under the sort of “entire writing” review required by Texas law, determining
whether Chesapeake violated the royalties provisions in each potential class member’s
contract requires an examination of the interplay between the post-production clause
and the other portions of the royalties provisions in each individual contract. For
that reason, it is impossible to answer the plaintiffs’ complaints with a “common

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answer,” as an individual determination is necessary for each plaintiff. Therefore, the
court concludes that the Rule 23(a)(2) commonality prerequisite is not satisfied in
this case.
c. Typicality
Rule 23(a)(3) requires that “the claims . . . of the representative parties [be]
typical of the claims . . . of the class.” FED. R. CIV. P. 23(a)(3). The test for
typicality involves a determination of “‘whether the class representative’s claims have
the same essential characteristics of those of the putative class.’” James v. City of
Dallas, Texas, 254 F.3d 551, 571 (5th Cir. 2001) (quoting 5 JAMES W. MOORE ET AL.,
MOORE’S FEDERAL PRACTICE § 23.24 (3d ed. 2000), cert. denied, 534 U.S. 1113
(2002), abrogation on other grounds by Wal-Mart, 131 S.Ct. at 2551, recognized by
Stukenberg, 675 F.3d at 839-41. Furthermore, “[t]ypicality focuses on the similarity
between the named plaintiffs’ legal and remedial theories and the theories of those
whom they purport to represent.” Lightbourn v. County of El Paso, Texas, 118 F.3d
421, 426 (5th Cir. 1997), cert. denied, 522 U.S. 1052 (1998). In practice, “[t]he
commonality and typicality requirements of Rule 23(a) tend to merge.” Falcon, 457
U.S. at 157 n.13.
In this case, typicality fails for the same reasons that commonality does. While
the plaintiffs and the potential class members would all be alleging a violation of the
portions of the royalty provisions in their contracts dealing with post-production

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costs, because of the differences between other clauses within those royalty
provisions, the plaintiffs’ allegations would not be typical of those of many of the
proposed class members. For example, the claims of the named plaintiffs would not
address the interaction of the post-production-cost clauses with the clauses in other
class members’ royalty provisions dealing with valuation at the well or limiting
royalties to what Chesapeake receives for the gas. See Chesapeake Appendix at App
45. There are also provisions in the plaintiffs’ leases that could cause their claims to
fail that do not exist in the leases of the other class members. Id. Therefore, the
court concludes that the plaintiffs’ claims would not be typical of the claims of the
proposed class members.
d. Adequacy of Representation
Rule 23(a)(4) provides that the representative plaintiffs can only sue on behalf
of a class if they “will fairly and adequately protect the interests of the class.” FED. R.
CIV. P. 23(a)(4). The Fifth Circuit has held that “Rule 23(a)’s adequacy requirement
encompasses class representatives, their counsel, and the relationship between the
two.” Berger v. Compaq Computer Corporation, 257 F.3d 475, 479 (5th Cir. 2001).
“‘The adequate representation requirement overlaps with the typicality requirement
because in the absence of the typical claims, the class representative has no incentive
to pursue the claims of the other class members.’” Stirman v. Exxon Corporation, 280
F.3d 554, 563 n.7 (5th Cir. 2002) (quoting In re American Medical Systems, Inc., 75

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F.3d 1069, 1083 (6th Cir. 1996)). Because commonality, typicality, and adequacy
focus on “whether the named plaintiff’s claim and the class claims are so interrelated
that the interests of the class members will be fairly and adequately protected in their
absence,” commonality and typicality “tend to merge with the adequacy-ofrepresentation requirement, although the latter requirement also raises concerns
about the competency of class counsel and conflicts of interest.” Falcon, 457 U.S. at
157 n.13.
The court concludes that the plaintiffs’ counsel would be adequate. They have
extensive experience in oil and gas lawsuits and have represented class actions before.
See Motion for Class Certification at 14-15. However, due to the differences between
the plaintiffs’ leases and those of the proposed class members, the plaintiffs are not
adequate class representatives. They would have no incentive to pursue arguments
regarding the conflicting provisions in other class members’ leases that do not exist in
their own leases. See Stirman, 280 F.3d at 563 n.7 (finding that a plaintiff
attempting to certify a class of oil and gas leaseholders was likely not an adequate
representative because she “ha[d] no incentive to fully litigate those claims not
applicable to her”). Therefore, the court concludes that the plaintiffs have not shown
that they would adequately represent the interests of the proposed class members.

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2. Rule 23(b)(3) Requirements
Rule 23(b)(3) states that a class action can be maintained if the prerequisites
of Rule 23(a) have been met and the plaintiffs show that “the questions of law or fact
common to class members predominate over any questions affecting only individual
members, and that a class action is superior to other available methods for fairly and
efficiently adjudicating the controversy.” FED. R. CIV. P. 23(b)(3). “The
predominance and superiority requirements are ‘far more demanding’ than is [R]ule
23(a)(2)’s commonality requirement.” O’Sullivan v. Countrywide Home Loans, Inc., 319
F.3d 732, 738 (5th Cir. 2003) (quoting Amchem Products, Inc. v. Windsor, 521 U.S.
591, 624 (1997)). To determine whether predominance exists, the court must
“inquire how the case will be tried,” which “entails identifying the substantive issues
that will control the outcome, assessing which issues will predominate, and then
determining whether the issues are common to the class.” Id. A superiority analysis,
on the other hand, involves “assess[ing] the relative advantages of alternative
procedures for handling the total controversy.” FED. R. CIV. P. 23(b)(3) advisory
committee’s note to 1966 amendment. “‘[T]he superiority analysis is fact-specific
and will vary depending on the circumstances of any given case.’” In re TWL
Corporation, 712 F.3d at 896 (quoting Robertson v. Monsanto Company, 287 Fed. Appx.
354, 361 (5th Cir. 2008) (per curiam)).

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The court concludes that predominance is lacking in this case for the same
reasons that commonality and typicality are. A trial on all of the proposed class
members’ claims would entail separates analyses of the different clauses in each
individual royalty provision to determine whether Chesapeake had violated the postproduction-cost clauses in each lease. Therefore, the specific question on which the
plaintiffs focus -- namely, whether Chesapeake breached the similar language in the
proposed class members’ royalty provisions related to post-production costs -- would
not predominate over the more involved determinations of how those clauses relate to
other portions of the royalty provisions in each individual class member’s lease.
Superiority also does not exist in this case. The plaintiffs argue that the size of
their claims would make it difficult for them to bring their claims absent a class
action, but they acknowledge that their claims would each be for several thousand
dollars. See Plaintiffs’ Reply at 4. This amount is not so small as to render a class
action a superior method of adjudication, as the size of individual claims is generally
only sufficient to persuade courts that class actions are superior when those individual
claims are very small. See, e.g., Phillips Petroleum Company v. Shutts, 472 U.S. 797,
809 (1985) (observing that in a “lawsuit involv[ing] claims averaging about $100 per
plaintiff . . . most of the plaintiffs would have no realistic day in court if a class action
were not available”); Eisen v. Carlisle and Jacquelin, 417 U.S. 156, 161 (1974) (finding
that it was a “critical fact” in the Rule 23 determination that the plaintiff’s individual

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claim was only $70); Carroll v. United Compucred Collections, Inc., 399 F.3d 620, 62526 (6th Cir. 2005) (holding that a class action was a superior method for litigating
the claims of 164 class members with claims of approximately $60 each); Walton v.
Franklin Collection Agency, Inc., 190 F.R.D. 404, 412-13 (N.D. Miss. 2000) (finding
that the fact that “most class members hav[e] claims between fifty and two hundred
dollars . . . supports the conclusion that a class action is superior to other available
methods of adjudicating this controversy”). Due to the relatively small size of the
proposed class and the serious commonality problems within that class, the court
concludes that the plaintiffs’ claims could be more easily resolved if the plaintiffs
bring them individually or if the plaintiffs with identical royalty provisions join
together their claims. Therefore, neither prong of Rule 23(b)(3) is satisfied in this
case.
C. Notice Requirement
Chesapeake also argues that the plaintiffs cannot bring a class action regarding
these leases because the leases contain provisions that require leaseholders to give
Chesapeake 90 days’ notice before filing a lawsuit. See Chesapeake Response at 2425. Because the court concludes that the plaintiffs cannot satisfy the Rule 23
requirements, it is unnecessary to address this argument.

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III. CONCLUSION
For the reasons stated above, the plaintiffs’ motion to certify a class pursuant
to Rule 23(a)(1)-(4) and (b)(3) is DENIED.
SO ORDERED.

November 13, 2013.

___________________________________
A. JOE FISH
Senior United States District Judge

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