Kahle et al v. Chesapeake Energy Corporation et al
Filing
26
MEMORANDUM OPINION AND ORDER Granting Dfts Chesapeake Energy Corporation And Kevin Swiger's 6 Motion to Dismiss Complaint. Signed by Senior Judge Frederick P. Stamp, Jr on 6/30/11. (mji)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
MELVIN W. KAHLE, JR. and
CAROL KAHLE,
Plaintiffs,
v.
Civil Action No. 5:11CV24
(STAMP)
CHESAPEAKE ENERGY CORPORATION,
CHESAPEAKE APPALACHIA, LLC,
KEVIN SWIGER and
STATOIL USA ONSHORE PROPERTIES, INC.,
Defendants.
MEMORANDUM OPINION AND ORDER
GRANTING DEFENDANTS CHESAPEAKE ENERGY CORPORATION
AND KEVIN SWIGER’S MOTION TO DISMISS COMPLAINT
I.
Procedural History
The plaintiffs, Melvin W. Kahle, Jr. and Carol Kahle, filed
this declaratory judgment action in the Circuit Court of Ohio
County, West Virginia on January 14, 2011.
The plaintiffs seek a
declaratory judgment that the defendants do not have the right to
enter or drill upon their property and that both the May 15, 2006
oil and gas Lease signed by the Kahles and Range ResourcesAppalachia, LLC (“Lease”) and the alleged assignment of the Lease
to
Chesapeake
Appalachia,
LLC
(“Chesapeake”)
and
Statoil
USA
Onshore Properties, Inc. (“Statoil”) be declared null and void.
The defendants removed the case to this Court on February 14, 2011.
On February 22, 2011, defendants Chesapeake Energy Corporation
(“Chesapeake Energy”) and Kevin Swiger filed a motion to dismiss
the complaint.
In support of this motion, the defendants argue
that neither Mr. Swiger nor Chesapeake Energy are parties to the
Lease
and
complaint.
there
are
no
claims
asserted
against
them
in
the
Before the motion to dismiss was fully briefed, the
plaintiffs filed a motion for a stay of briefing pending a decision
on their motion for remand, which had not yet been filed.
On March
10, 2011, the plaintiffs filed their motion for remand.
This Court issued an order on March 30, 2011 granting the
plaintiffs’ motion for a stay pending a decision on the motion for
remand.
On June 3, 2011, this Court denied the plaintiffs’ motion
for remand and lifted the stay.
In a separate order, this Court
set forth a briefing schedule for the motion to dismiss.
The
plaintiffs filed a timely response to the motion to dismiss on June
17, 2011, stating that they have no objection to the motion to
dismiss the complaint.
The defendants did not file a reply.
The
motion to dismiss is currently pending before this Court and is
ripe for disposition.
Having reviewed the parties’ pleadings and
the relevant law, this Court finds that the defendants’ motion to
dismiss must be granted.
II.
Facts1
On May 15, 2006, the plaintiffs entered into the Lease with
Great Lakes Energy Partners, LLC (“Great Lakes”), a wholly-owned
subsidiary of Range Resources Corporation that later changed its
name to Range Resources-Appalachia, LLC (“Range”).
The Lease does
not grant Range the authority to sell or assign it. The plaintiffs
1
For the purposes of this opinion, this Court adopts, for the
most part, the facts as set forth by the plaintiffs in their
complaint.
2
allege that Range orally agreed to terminate/surrender the Lease,
and then on August 20, 2010, Range confirmed the termination of the
Lease in writing via a letter to the Kahles.
After the plaintiffs
received the letter from Range, Chesapeake and/or Chesapeake Energy
informed them that it had acquired the Lease. On October 18, 2010,
the defendants2 issued a notice of entry that they would be
entering the plaintiffs’ land.
Kevin Swiger, Chesapeake Energy’s
senior field representative, allegedly physically entered the
plaintiffs’ land despite being told that the Lease had been
terminated.3
The plaintiffs also learned that Chesapeake had
applied for a permit to drill on the plaintiffs’ property beginning
in
December
2010.
According
to
the
plaintiffs,
Chesapeake,
Chesapeake Energy, and Statoil could not have acquired an existing
Lease from Range because Range had terminated the Lease with the
Kahles as of August 20, 2010.
III.
Applicable Law
In assessing a motion to dismiss for failure to state a claim
under Rule 12(b)(6), a court must accept all well-pled facts
contained in the complaint as true.
Nemet Chevrolet, Ltd v.
Consumeraffairs.com, Inc, 591 F.3d 250, 255 (4th Cir. 2009).
However, “legal conclusions, elements of a cause of action, and
bare assertions devoid of further factual enhancement fail to
2
The complaint does not specify which defendants issued the
notice of entry.
3
This fact does not appear in the complaint, but was stated in
the plaintiffs’ motion for remand.
3
constitute well-pled facts for Rule 12(b)(6) purposes.”
Id.
(citing Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009)).
This
Court
also
declines
to
consider
“unwarranted
unreasonable conclusions, or arguments.”
inferences,
Wahi v. Charleston Area
Med. Ctr., Inc., 562 F.3d 599, 615 n.26 (4th Cir. 2009).
It has often been said that the purpose of a motion under Rule
12(b)(6) is to test the formal sufficiency of the statement of the
claim for relief; it is not a procedure for resolving a contest
about the facts or the merits of the case.
5B Charles Alan Wright
& Arthur R. Miller, Federal Practice and Procedure § 1356 (3d ed.
1998).
The Rule 12(b)(6) motion also must be distinguished from a
motion for summary judgment under Federal Rule of Civil Procedure
56, which goes to the merits of the claim and is designed to test
whether there is a genuine issue of material fact.
Id.
For
purposes of the motion to dismiss, the complaint is construed in
the
light
essentially
most
the
favorable
court’s
to
the
inquiry
party
is
making
directed
the
to
claim
and
whether
the
allegations constitute a statement of a claim under Federal Rule of
Civil Procedure 8(a).
Id. § 1357.
A complaint should be dismissed “if it does not allege ‘enough
facts to state a claim to relief that is plausible on is face.’”
Giarratano v. Johnson, 521 F.3d 298, 302 (4th Cir. 2008) (quoting
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
“Facial
plausibility is established once the factual content of a complaint
‘allows the court to draw the reasonable inference that the
4
defendant is liable for the misconduct alleged.’” Nemet Chevrolet,
591 F.3d at 256 (quoting Iqbal, 129 S. Ct. at 1949).
Detailed
factual allegations are not required, but the facts alleged must be
sufficient “to raise a right to relief about the speculative
level.”
Twombly, 550 U.S. at 555.
IV.
In
support
of
their
Discussion
motion
to
dismiss
the
complaint,
defendants Chesapeake Energy and Kevin Swiger first argue that they
are not proper parties to this action because they are not parties
to the Lease or the assignment.
Second, the defendants contend
that the plaintiffs have failed to plead any facts to support any
claim against Chesapeake Energy or Kevin Swiger.
In response, the plaintiffs state that they have no objection
to the motion to dismiss the complaint as to Kevin Swiger and
Chesapeake Energy; however, the plaintiffs argue that they reserve
the right to move to amend their complaint to better articulate
their claims against these parties and add them as defendants in
accordance with any litigation deadlines entered by this Court.
Because the plaintiffs do not oppose the motion to dismiss and
because this Court finds that the plaintiffs have failed to state
a claim as to Chesapeake Energy and Kevin Swiger, the motion to
dismiss must be granted as to these two defendants.
This Court,
however, makes no ruling as to any right of the plaintiffs to move
to amend their complaint.
The determination of the plaintiffs’
5
right to amend their complaint would depend upon the substance of
any motion to amend.
V.
Conclusion
For the reasons stated above, the defendants’ motion to
dismiss the complaint is GRANTED as to defendants Chesapeake Energy
Corporation and Kevin Swiger.
Defendants Chesapeake Appalachia,
LLC and Statoil USA Onshore Properties, Inc. remain parties to this
case.
IT IS SO ORDERED.
The Clerk is directed to transmit a copy of this order to
counsel of record herein.
DATED:
June 30, 2011
/s/ Frederick P. Stamp, Jr.
FREDERICK P. STAMP, JR.
UNITED STATES DISTRICT JUDGE
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