Chieftain Royalty Co. v. Enervest Energy Inst. Fund XIII-A, L.P

• Decision Date: 24 February 2022
• Docket Number: CIV-11-177-D
• Parties: 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 CHARLES DAVID NUTLEY, et al., Objectors.
• Court: U.S. District Court — Western District of Oklahoma

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 CHARLES DAVID NUTLEY, et al., Objectors.

No. CIV-11-177-D

United States District Court, W.D. Oklahoma

February 24, 2022

ORDER

TIMOTHY D. DEGIUSTI CHIEF UNITED STATES DISTRICT JUDGE

Before the Court are two motions filed by Objector Charles David Nutley: 1) Motion to Exclude or Strike Billing Records Submitted by Class Counsel in Support of Class Counsel's Renewed Motion for Approval of Attorneys' Fees [Doc. No. 323]; and 2) Motion to Exclude or Strike Certain Declarations in Support of Class Counsel's Renewed Motion for Approval of Attorneys' Fees and Class Representative's Renewed Motion for Approval of Case Contribution Award [Doc. No. 324]. Motion #1 is directed at a filing of attorney time records [Doc. No. 320], and Motion #2 is directed at declarations of Plaintiff's attorneys [Doc. Nos. 302-1, 302-2 and 302-5] and legal experts [Doc.

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Nos. 291 through 300].^[1] Plaintiff has responded [Doc. Nos. 329 and 330], and Objector Nutley has replied [Doc. Nos. 331 and 332]. Thus, the Motions are fully briefed and ripe for decision.^[2]

Factual and Procedural Background

The procedural history of this case informs the issues raised by the Motions. The case was resolved by the settlement of claims for underpayment of oil and gas royalties by a certified class of royalty owners, represented by Plaintiff Chieftain Royalty Company. The settlement involved five defendants, EnerVest Energy Institutional Fund XIII-A, L.P., EnerVest Energy Institutional Fund XIII-WIB, L.P., EnerVest Energy Institutional Fund XIII-WIC, L.P., EnerVest Operating, L.L.C., and FourPoint Energy, LLC. Objectors Charles David Nutley and Danny George took unsuccessful appeals from the Order and Judgment Granting Final Approval of Class Action Settlement, which was affirmed. See Chieftain Royalty Co. v. EnerVest Energy Inst. Fund XIII-A, L.P., 888 F.3d 455, 470 (10th Cir. 2017) (amended Apr. 11, 2018); cert. denied, 139 S.Ct. 482 (2018). Objectors prevailed, however, in appeals from the Order Awarding Attorneys' Fees, Reimbursement of Litigation Expenses and Case Contribution Award [Doc. No. 156]. The Tenth Circuit

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reversed the awards of attorney fees to class counsel and compensation to Plaintiff as the class representative, commonly known as an incentive award, and remanded the case for a redetermination of these awards. Id.

Significantly, the court of appeals determined that the attorney fee and incentive awards are governed by Oklahoma law, both as to whether to make an award from the common fund and how to calculate an amount. See id. at 462 (attorney fees), 468-69 (incentive award). In so doing, the Tenth Circuit opined about unsettled Oklahoma law. See id. at 468 (“Our task then is to make an informed prediction of what the State's highest court would do.”). The court of appeals determined that a percentage-of-the-common-fund method cannot be used to determine either award, that the lodestar method must be used to determine a reasonable attorney fee, and that an incentive award should represent “payment at a reasonable rate for reasonable time expended on services rendered that were helpful to the litigation.” Id. After receipt of the mandate, Plaintiff and class counsel filed new motions asking the Court to award them the same amounts previously awarded under the rules announced by the Tenth Circuit. See Class Counsel's Renewed Mot. Approval of Attys' Fees [Doc. No. 302]; Class Representative's Renewed Mot. Approval Contrib. Award [Doc. No. 304].

However, the Oklahoma Supreme Court later decided in Strack v. Continental Resources, Inc., 2021 OK 21, 2021 WL 1540516 (Okla. Apr. 20, 2021) (to be published), the same issues decided by the Tenth Circuit in this case. Strack was also a class action involving a settlement of claims alleging underpayment of royalties that generated a common fund. The supreme court held that the attorney fee award was governed by

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Oklahoma's class action statute, Okla. Stat. tit. 12, § 2023(G), and “the plain language of [this] statute allows for the calculation of attorney's fees under both the percentage and lodestar methods.” Strack, 2021 OK 21, ¶ 16, 2021 WL 1540516 at *4. The Oklahoma Supreme Court also addressed incentive awards for the first time. See id., 2021 OK 21, ¶ 33, 2021 WL 1540516 at *8. The court determined that incentive awards “are justified as payment for reasonable services rendered by class representatives on behalf of the class that were helpful to the litigation” and provided instructions for calculating the award “similar to the lodestar method.” Id., 2021 OK 21, ¶¶ 33-34, 2021 WL 1540516 at *8-9. Under these circumstances, this Court's determination of reasonable attorney-fee and incentive awards must be guided by Strack, which is an intervening decision of Oklahoma's highest court that has resolved the state law issues presented and binds federal courts applying Oklahoma law. See Kokins v. Teleflex, Inc., 621 F.3d 1290, 1295 (10th Cir. 2010); Ute Indian Tribe v. Utah, 114 F.3d 1513, 1521 (10th Cir. 1997) (discussing intervening-change-in-law exception to mandate rule); see also Padilla-Caldera v. Holder, 637 F.3d 1140, 1145 (10th Cir. 2011). This Court is not bound by any part of the Tenth Circuit's opinion regarding Oklahoma law that is inconsistent with Strack.

Objector's Motions

Motion #1 challenges the time records that were compiled by class counsel and submitted after remand in support of their renewed motion to determine an appropriate award of attorney fees from the settlement fund. Motion #2 asks the Court to disregard numerous declarations presented in support of both the renewed motions for attorney-fee and incentive awards. Objector Nutley challenges on several grounds the declarations of

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1) two of Plaintiff's attorneys; 2) numerous retained legal experts, including practicing attorneys, retired or former judges, and legal scholars; and 3) a former state senator. Objector Danny George asserts a similar challenge to the declarations of Plaintiff's legal experts in his brief opposing the renewed motions; he urges the Court to disregard certain declarations “as improper testimony on what the law is.” See George's Resp. Br. [Doc. No. 321] at 8, 10, 14. Because there are overlapping arguments, the Court addresses both Motions, as well as George's arguments, in a single order. The Court must dispose of these procedural challenges before it can decide the substantive issues of the amounts of fees to be awarded.

Standard of Decision

No party addresses the procedural basis of Nutley's Motions or the appropriate standard of decision.^[3] The only provision of the Federal Rules of Civil Procedure that authorizes striking material from the record speaks to impertinent or scandalous matter in pleadings. See Fed. R. Civ. P. 12(f). Nutley's Motions instead ask the Court to disregard documents presented as evidentiary support for Plaintiff's post-judgment motions on the remaining requests for attorney-fee and incentive awards. The Motions raise evidentiary objections and seek to exclude Plaintiff's materials from consideration. They most closely resemble a motion in limine seeking a pretrial ruling on the admissibility of evidence. Accordingly, in the Court's view, the Motions raise a preliminary issue of what procedure will be used to resolve the remaining substantive issues.

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The Court conducted a hearing on the original motions for fee and incentive awards and issued detailed findings pursuant to Fed.R.Civ.P. 23(h). See Order Awarding Att'y Fees, Reimb. Litig. Expenses & Case Contrib. Award [Doc. No. 156]. After remand, Plaintiff and its counsel have compiled an extensive documentary record in support of the renewed motions, and Objectors have asserted objections to those materials and presented their own materials. Upon consideration, the Court finds its determination of reasonable awards should be made on the written record without another hearing for several reasons.

First, no party has requested an evidentiary hearing to decide the remanded post-judgment issues. Immediately after the mandate was received, Plaintiff filed a combined Notice and Motion for Hearing on Remand [Doc. No. 266] asking the Court to hold a hearing to determine that the previous awards were reasonable. Objectors opposed the request as premature and otherwise objectionable [Doc. Nos. 271, 274]. After briefing, the Court held an in-chambers conference and discussed with counsel “how to move forward procedurally.” See 6/7/18 Order [Doc. No. 282]. The Court issued a schedule for appropriate filings in light of that discussion (id.), which resulted in the documentary record now presented. None of these filings include a request for an evidentiary hearing.

Second, as a procedural matter, Rule 23(h) and Rule 54(d)(2) permit a motion for recovery of attorney fees to be decided without an evidentiary hearing.^[4] Rule 23(h)(1) mandates that “[a] claim for an award must be made by motion under Rule 54(d)(2), ” and

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Rule 23(h)(3) states “the court may hold a hearing.” Rule 54(d)(2)(C) expressly confers discretion on district courts by requiring “an opportunity for adversary submissions on the motion in accordance with Rule 43(c) or 78.” Rule 43(c) provides for a motion to be heard on affidavits, oral testimony, or depositions, and Rule 78 authorizes motion hearings or submissions of “motions on briefs, without oral hearings.” Clearly then, a district court is expressly authorized to exercise discretion and determine the most efficient manner for resolving fee disputes. Under the circumstances of this case, the Court finds that the documentation supplied by Plaintiff, together with the Court's familiarity with the case, provide an adequate basis to...