Cline v. Sunoco, Inc.

1

PERRY CLINE, on behalf of himself and all others similarly situated, Plaintiff - Appellee, v. SUNOCO, INC. (R&M); SUNOCO PARTNERS MARKETING & TERMINALS L.P., Defendants - Appellants.

No. 22-7018

United States Court of Appeals, Tenth Circuit

August 3, 2023

(D.C. No. 6:17-CV-00313-JAG) (E.D. Okla.)

Before MATHESON, BRISCOE, and MORITZ, Circuit Judges.

ORDER AND JUDGMENT ^[*]

Nancy L. Moritz Circuit Judge

For almost three years, Sunoco, Inc. (R&M) and Sunoco Partners Marketing & Terminals, L.P. (collectively "Sunoco") have unsuccessfully attempted to appeal several adverse rulings in a class-action lawsuit that resulted in a $155 million damages award against them. We dismissed Sunoco's first attempt as premature, explaining that Sunoco had appealed before the district court entered an order satisfying the two requirements under our precedents for a final, appealable judgment in the class-action context. Specifically, the district court had not entered an order that (1) allocated damages among class members and (2) disposed of any unclaimed class funds. Once the district court adopted an allocation plan purporting to satisfy those finality requirements, Sunoco appealed a second time reasserting its various merits arguments. But we dismissed Sunoco's second appeal, too, this time holding that Sunoco had failed to establish appellate jurisdiction because it argued that the district court's allocation plan did not, in fact, satisfy the two finality requirements and thus did not result in a final, appealable judgment.

After unsuccessfully seeking rehearing and mandamus relief, Sunoco returned to the district court and filed the Federal Rule of Civil Procedure 60(b)(6) motion at issue in this appeal. The motion asked the district court to modify the allocation plan so that it complies with the two finality requirements thereby producing a final judgment that Sunoco might at last appeal on the merits. Believing that the plan, as written, already complied with those requirements, the district court denied the motion. Once again, Sunoco appeals. And because the district court's allocation plan satisfies neither finality requirement, we hold that the district court abused its discretion in denying Sunoco's Rule 60(b)(6) motion. We therefore reverse and remand for further proceedings.

Background

The class-action lawsuit underlying this appeal stems from Sunoco's role as a first purchaser of crude oil. In that role, Sunoco buys oil from individual wells and pays proceeds to the mineral-interest owners for those wells. Under Oklahoma law, Sunoco must pay these proceeds within certain statutory deadlines and, if it fails to do so, must pay interest. See Okla. Stat. tit. 52, § 570.10(A)-(E). In 2017, Perry Cline and several other Oklahoma mineral-interest owners sued Sunoco for allegedly adopting an unlawful practice of paying interest on late proceeds payments only when owners requested such interest. The district court certified the case as a class action consisting of about 53,000 mineral-interest owners, and after a bench trial, it found Sunoco liable. The district court then issued an order in late August 2020 awarding the class about $155 million in total damages and purporting to enter final judgment against Sunoco.

That same day, Sunoco filed its first notice of appeal, challenging the district court's class-certification and bench-trial decisions, among other rulings. But about three weeks later, Sunoco moved to abate the appeal because the district court had yet to enter a final, appealable judgment. See Fed.R.Civ.P. 54(a) (defining "judgment" as "any order from which an appeal lies"); 28 U.S.C. § 1291 (permitting appeals from district court "final decisions"). Specifically, the district court had not entered an order that satisfied the two requirements for such a judgment in the classaction context under our precedents: it had not established (1) "the formula that will determine the division of damages among class members" or (2) "the principles that will guide the disposition of any unclaimed funds." Strey v. Hunt Int'l Res. Corp., 696 F.2d 87 (10th Cir. 1982); see also Cook v. Rockwell Int'l Corp., 618 F.3d 1127, 1137-38 (10th Cir. 2010) (holding that class-action judgment was final because district court adopted allocation plan that complied with Strey's two requirements). Since the absence of a final judgment affected our jurisdiction, we ordered the parties to brief whether Sunoco's first appeal should be dismissed. See 28 U.S.C. § 1291.

While the parties briefed that issue, the district court adopted an allocation plan addressing the two finality requirements mentioned above. As to the first, the plan adopted Cline's proposal to divide damages by assigning each class member a ten-digit Business Associate ("BA") number corresponding to their account number in Sunoco's records. A judgment administrator would then calculate each class member's damages by multiplying their predetermined percentage of the total judgment by the total judgment. And as to the second, the plan provided that the district court would decide where to send any unclaimed funds after the judgment administrator finished distributing damages to class members. Although the district court "anticipate[d]" sending unclaimed funds to "state accounts for unclaimed property," it "retain[ed] discretion to select a different method of distribution that best serves the interests of the class once all relevant information is available." App. 97. The same day the district court adopted the allocation plan, Sunoco filed a second notice of appeal challenging the plan and all prior adverse rulings.

Soon after, Sunoco filed a supplemental brief in its first appeal, noting that the district court had adopted an allocation plan but arguing that the plan did not constitute a final, appealable judgment under Strey and Cook. That is so, Sunoco argued, because the allocation plan (1) does not address how to distribute damages among a group of class members associated with two BA numbers that represent aggregate accounts that Sunoco used whenever it lacked a mineral-interest owner's name or address; and (2) makes no definitive preliminary finding about distributing unclaimed funds. The next day, we dismissed Sunoco's first appeal for lack of jurisdiction. Cline v. Sunoco Partners Mktg. &Terminals L.P. (Cline I), No. 207055, 2020 WL 8632631 (10th Cir. Nov. 3, 2020) (unpublished). Without mentioning the district court's recently issued allocation plan, we concluded that the appeal was premature when filed because "the district court had not yet entered a final decision" allocating damages. Id. at *1.

That same day, we ordered supplemental briefing in Sunoco's second appeal on whether the district court's allocation plan complied with Strey and Cook's finality requirements. In posttrial motions filed in the district court a few weeks later, Sunoco reasserted its position that the plan did not comply with those requirements. The district court denied the motions, summarily rejecting Sunoco's argument that the plan failed to allocate damages among class members and specifically rejecting Sunoco's objection that the plan did not provide for the distribution of unclaimed damages. As to the latter point, the district court asserted that the plan requires the judgment administrator to send unclaimed damages "to state unclaimed property funds." App. 114 n.10. Sunoco then filed a third notice of appeal challenging the district court's decision, which we consolidated with Sunoco's second appeal.

After full merits briefing and additional supplemental briefing on jurisdiction, we dismissed the consolidated appeals, holding that Sunoco "ha[d] not met its burden to establish [appellate] jurisdiction" because it had filed various briefs arguing that the district court's allocation plan "d[id] not result in a final, appealable judgment."^[1]Cline v. Sunoco Partners Mktg. &Terminals L.P. (Cline II), Nos. 20-7064 &207072, 2021 WL 5858399, at *2 (10th Cir. Nov. 1, 2021) (per curiam) (unpublished), cert. denied, 143 S.Ct. 90 (Oct. 3, 2022). Sunoco then petitioned for panel rehearing and rehearing en banc, and alternatively asked that we construe the consolidated appeals as a mandamus petition. When we denied the rehearing petition, Sunoco filed a mandamus petition asking that we order the district court to amend the allocation plan so that it complies with Strey and Cook. Sunoco's proposed amendment would have (1) instructed the judgment administrator on how to divide damages among the group of class members associated with the two BA numbers that represent aggregate accounts; and (2) incorporated the district court's clarification in the order denying posttrial motions about where unclaimed funds will be sent. We denied this petition, too, concluding that Sunoco had not shown it was entitled to mandamus relief.

Undeterred, Sunoco returned to the district court and filed the Federal Rule of Civil Procedure 60(b)(6) motion at issue in this appeal. See Fed.R.Civ.P. 60(b)(6) (permitting relief from "a final judgment, order, or proceeding for . . . any other reason that justifies relief"). In that motion, Sunoco asked the district court to modify the allocation plan in the two ways suggested in Sunoco's mandamus petition and to issue a new judgment. See Fed.R.Civ.P. 58(a) ("Every judgment and amended judgment must be set out in a separate document "). The district court denied Sunoco's motion, maintaining that the allocation plan "complies with the [finality] standard set forth in" Strey and Cook and asserting that it had already "satisfied" Rule 58(a). App. 249. Once again, Sunoco appeals.^[2]

Analysis

Sunoco challenges the district court's order denying Rule 60(b) relief....