Chieftain Royalty Co. v. Enervest Energy Institutional Fund

1

CHIEFTAIN ROYALTY COMPANY, on its behalf and as representative of a class of similarly situated royalty owners, Plaintiff, v. ENERVEST ENERGY INSTITUTIONAL FUND XIII-A, L.P, et al., Defendants, and C. BENJAMIN NUTLEY, as personal representative of the Estate of Charles David Nutley, et al., Objectors.^[1]

No. CIV-11-177-D

United States District Court, W.D. Oklahoma

September 27, 2024

ORDER

TIMOTHY D. DEGIUSTI, CHIEF UNITED STATES DISTRICT JUDGE

This matter comes before the Court to adjudicate a mandate from the court of appeals in this resolved class action, where the only remaining issue is an attorney-fee award to class counsel. The case was recently remanded “for the district court to direct the issuance of class-wide notice of the 2018 motion for attorneys' fees and re-open the period for objections, consistent with the requirements of Federal Rule of Civil Procedure 23(h).” Chieftain Royalty Co. v. SM Energy Co., 100 F.4th 1147, 1168 (10th Cir. 2024) (“Chieftain II”). To provide an opportunity for absent class members to object, the court of appeals vacated the prior fee award without reaching the merits, based solely on a lack of Rule 23(h) notice. Id. at 1150-51.^[2]

A Class-Wide Notice

After remand, Plaintiff moved for approval of a new class notice and a schedule, which was opposed only as to the content of the notice by Objectors Danny George and C. Benjamin Nutley as personal representative of the Estate of Charles David Nutley. After considering timely objections, the Court approved a notice program that largely duplicated the original notice used in 2015 for settlement of the class action, which was affirmed in Chieftain Royalty Co. v. EnerVest Energy Institutional Fund XIII-A, L.P., 888 F.3d 455, 470 (10th Cir. 2017) (amended Apr. 11, 2018); cert. denied, 139 S.Ct. 482 (2018) (Chieftain I). The notice program utilized the class administrator to mail a postcard notice to all class members whose addresses could reasonably be determined, to publish a summary notice in five newspapers of general and local circulation in Oklahoma, and to post a long-form notice about the attorney-fee motion on the existing class-action settlement website, www.chieftain-enervest.com, which has been maintained and updated. See Order Granting Class Representative's Mot. to: (1) Approve Form and Manner of Notice to Certified Class of Mot. for Atty's Fees and (2) Approve Proposed Schedule [Doc. No. 389] (“Order Approving Notice”). The 2018 fee motion, together with supporting materials and class counsel's time records, were already available on the website when the Order Approving Notice was issued on July 22, 2024. See id. at 6 n.4.

To be clear, the 2018 fee motion addressed in Chieftain II and disseminated through the class-wide notice is Class Counsel's Renewed Motion for Approval of Attorneys' Fees from Common Fund [Doc. No. 302] (“Renewed Motion”), which is accompanied by a supporting brief [Doc. No. 303] and a voluminous record of evidentiary materials.^[3]The Renewed Motion was filed to comply with the mandate in Chieftain I, which vacated the original fee award and directed the Court to determine a reasonable award of attorney fees to class counsel under Oklahoma law. See Chieftain I, 888 F.3d at 470. The Tenth Circuit included guidance in Chieftain I regarding further development of the record based on its “informed prediction of what the State's highest court would do” on questions of unsettled Oklahoma law regarding class actions. See Chieftain I, 888 F.3d at 468. However, the Oklahoma Supreme Court subsequently settled these questions in Strack v. Continental Resources, Inc., 2021 OK 21, 507 P.3d 609 (Okla. 2021), and established a different standard for attorney-fee awards than predicted by the Tenth Circuit. Accordingly, this Court directed the parties to file supplemental briefs addressing the effect of Strack. See George's Suppl. Br. [Doc. No. 354]; Nutley's Suppl. Br. [Doc. No. 355]; Pl.'s Suppl. Br. [Doc. No. 356].^[4]

The Order Approving Notice also approved Plaintiff's proposed schedule for accomplishing the notice program and making objections. This part of Plaintiff's proposal drew no timely opposition from Objectors. However, the Court made an independent assessment of the reasonableness of the schedule under the circumstances. The schedule was expressed in terms of time periods running from the date of the Order Approving Notice. Computing those deadlines, the settlement administrator was directed to begin mailing postcards to the last-known address of each class member who could be identified with reasonable effort (and who did not previously opt out) by August 1, 2024; to display the long-form notice on the settlement website by August 11, 2024; and to publish the summary notice in the five identified newspapers by August 11, 2024. The affidavits of Jason Stinehart on behalf of the settlement administrator, Russ Consulting, Inc., explain the steps taken to ensure effective notice to class members and show full compliance with the Court's directions. See Stinehart Aff. [Doc. No. 380-1]; Stinehart Aff. [Doc. No. 404].

Objections to the Renewed Motion were due by September 10, 2024. Before that date, the Clerk of Court received two mailings sent on behalf of class members. One was received from an individual who identified himself as the spouse of a postcard addressee; he simply returned the postcard and informed the Court that the addressee is deceased [Doc. No. 395]. The other mailing was received from an individual, Dian Y. Denny, M.D., stating he received three postcards at the same address in New Orleans, Louisiana, and he is personal representative of his mother's estate [Doc. No. 396]. Dr. Denny stated the following position regarding a new request for attorney fees:

I agree, if it will not cost money. I disagree if it will cost claimants money for attorney's fees. (It has been nine years.)

See id., Letter at 2 (punctuation added). Giving this statement the liberal construction afforded pro se litigants, the Court understands that Dr. Denney does not object unless class members would be required to pay back some of the settlement money they received nine years ago to satisfy a fee award. Given that the Renewed Motion requests the same amount of attorney fees originally awarded from the common fund, the Court concludes that Dr. Denney is not objecting to the Renewed Motion.

Objectors also made filings in opposition to the Renewed Motion. Objector George simply referred the Court to his prior objection [Doc. No. 321] and reiterated his position that class counsel cannot claim credit for time “spent defending against Objectors' 2016 fee appeal” in Chieftain I and their fee award should be “no more than two times the resulting lodestar, consistent with Strack.” See George's Obj. Class Counsel's Renewed Motion [Doc. No. 398] at 2. Objector Nutley made an oversized filing that was stricken for noncompliance with the Local Civil Rules and as an unauthorized “do-over” of prior briefing. However, Nutley was granted additional time to file a new objection. See Order re. Obj. to Class Counsel's Renewed Mot. Atty's Fees [Doc. No. 400]. Nutley responded by filing an “Objection to Class Counsel's Request for Attorneys' Fees from Common Fund and Response to Court's Order Striking Objection” [Doc. No. 401] with a declaration of his attorney [Doc. No. 402]. As the title suggests, Nutley devotes a significant part of his brief to feigning misunderstanding of the Local Civil Rules and challenging the Court's application of them.^[5]These arguments are pointless given that Nutley was allowed to refile an objection. In the interest of expediency and finality, the Court elects to exercise its discretion to consider Nutley's Objection, even though it shares some of the same flaws as his stricken filing.^[6] Turning to the directions of the Tenth Circuit's mandate, the Court considers whether class members have received notice of the Renewed Motion “in a reasonable manner that provides a meaningful opportunity to object to the motion and its supporting documentation.” Chieftain II, 100 F.4th at 1160. The court of appeals stated that a sufficient notice under Rule 23(h) should allow absent class members “to make informed decisions about whether to object - and on what grounds - to the [Renewed Motion].” Id.

In his Objection, Nutley argues for the first time that the class-wide notice program was inadequate because the attorneys' time records that are accessible through the website are not formatted in the same way as the ones that were filed under seal in the case record. See Nutley's Obj. at 7. He also complains that the records in the case file were not unsealed and made public until one week before the objection deadline. Id. The Court finds these objections to be untimely and insubstantial. When considering the notice program, Nutley did not complain about the manner in which the attorneys' time records would be made available to class members, except through an untimely objection about publishing them on the settlement website. See Nutley's Resp. Class Representative's Revised Notice [Doc. No. 388] at 3-5.^[7]In any event, the substance of the time records that can be accessed through the website is the same as the time records that were filed in the case record. Nutley has not shown that the formatting of the records prevented any class member from making an informed decision of whether to object to the Renewed Motion. Finally, as to unsealing, one reason why the Court raised the issue sua sponte was that, after the records became publicly available on the website, they did not need to remain under seal.

For these reasons, Nutley's objections about the adequacy of the class-wide notice regarding the...