San Juan 1990-A, L.P. v. Meridian Oil Inc.

• Decision Date: 24 July 1997
• Docket Number: No. 14-97-00237-CV,14-97-00237-CV
• Citation: San Juan 1990-A, L.P. v. Meridian Oil Inc., 951 S.W.2d 159 (Tex. App. 1997)
• Parties: SAN JUAN 1990-A, L.P., K & W Gas Partners, L.P., MAP 1992-A Partners, L.P., and The Board of Trustees of Leland Stanford Junior University, Non-Profit Corporation, Appellants, v. MERIDIAN OIL INC., Meridian Oil Holding Inc., Meridian Oil Trading Inc., Meridian Oil Production Inc., Meridian Oil Gathering Inc., Meridian Oil Hydrocarbons Inc., El Paso Production Company, Edward Parker, Caroline Altheide and Langdon Harrison, Appellees. (14th Dist.)
• Court: Texas Court of Appeals

Page 159

951 S.W.2d 159

SAN JUAN 1990-A, L.P., K & W Gas Partners, L.P., MAP 1992-A Partners, L.P., and The Board of Trustees of Leland Stanford Junior University Non-Profit Corporation, Appellants, v. MERIDIAN OIL INC., Meridian Oil Holding Inc., Meridian Oil Trading Inc., Meridian Oil Production Inc., Meridian Oil Gathering Inc., Meridian Oil Hydrocarbons Inc., El Paso Production Company, Edward Parker, Caroline Altheide and Langdon Harrison, Appellees.

No. 14-97-00237-CV.

Court of Appeals of Texas Houston (14th Dist.).

July 24, 1997.

Rehearing Overruled Sept. 4, 1997.

W. Earl Touchstone, Houston, Gregory J. Stuckey, Wichita, KS, Solace H. Kirkland, Thomas D. Kitch, Houston, for appellants.

Karen Appel Oshman, H. Lee Godfrey, Kevin Debose, James T. McCartt, Richard Carrell, Daniel M. McClure, Anne Marie Rogers, Joy M. Soloway, William J. Boyce, Houston, for appellees.

Before MURPHY, C.J., and AMIDEI and ANDERSON, JJ.

OPINION

PER CURIAM.

This is an appeal from a judgment approving the settlement of a class action and effectively denying appellants' objection to the settlement agreement. Appellees filed motions to dismiss the appeal for want of jurisdiction. See TEX.R.APP. P. 72. Because we find the motions meritorious, we dismiss the appeal.

In the underlying class action, originally filed in 1992, Caroline Altheide and Langdon Harrison are the named class representatives (referred to jointly as "Altheide"). The defendants are Meridian Oil Inc. and several of its affiliates (collectively referred to as "Meridian"). The class claims are based upon Meridian's method of calculating payments to its royalty owners and its joint working interest owners in natural gas-producing properties. In summary, the petition alleged that these payments were based on wellhead prices set by a marketing affiliate, rather than upon the actual net proceeds that Meridian received from third parties using actual post-production costs incurred between the wellhead and the downstream point of sale.

After an extensive evidentiary hearing, the trial court certified the underlying suit as a class action in May 1995. ¹ The class certification order defined the class both in terms of its members and the class claims. In 1996 the parties reached a settlement agreement, and the trial court preliminarily approved that agreement. Individual notices of the proposed settlement were sent to over 25,000 class members. The class notice advised that class members had the choice to (a) participate in the settlement, or (b) opt out of the class so as to not be bound by the judgment. In addition, the notice set out the procedure for filing an objection to the settlement, informed the members of the time and place for the trial court's hearing to determine the fairness and adequacy of the settlement, and advised that members who filed an objection to the settlement could be heard at the fairness hearing. See TEX.R. CIV. P. 42(e).

After class certification, but before the settlement agreement was reached, appellants, San Juan 1990-A, L.P., K & W Gas Partners L.P., MAP 1992-A Partners, L.P., and the Board of Trustees of Leland Stanford Junior University, Non-Profit Corporation, acting as representative plaintiffs of a putative class, filed suit against Meridian in state court in New Mexico in September 1995. ² After receipt of the notice of the proposed settlement, appellants were concerned about the effect of the entry of the Texas judgment on their claims in the New Mexico suit. Consequently, appellants followed the procedure set forth in the notice for filing objections to the proposed settlement. ³ They assert, however, that their objections "did not challenge the sufficiency of the class settlement itself," and they "have always been ready to accept the settlement made by the Altheide Plaintiffs." Instead, they merely sought inclusion of provisions in the judgment that the settlement did not bar their claims in the New Mexico suit. Appellants did not opt out of the settlement or file an intervention to become named parties in the Texas action. Appellants were represented by counsel who presented their objections at the fairness hearing on November 8, 1996. Despite appellants' objections, the trial court signed the final judgment approving the settlement on November 12, 1996.

On November 22, 1996, appellants filed a motion for new trial or, in the alternative, to modify, alter or amend the judgment. The trial court conducted a hearing on appellants' motion on December 11, 1996, and ruled both that appellants had no standing to file the motion and that the motion was without merit. These rulings were incorporated in a written order dated December 16, 1996. Appellants attempted to perfect their appeal by filing a cost bond on February 7, 1997. Appellants filed the transcript, but the statement of facts from the fairness hearing and the hearing on the motion for new trial were not filed timely, and their request for extension was untimely. See TEX.R.APP. P. 54. Appellants have also filed their brief alleging in two points of error that the trial court abused its discretion in approving the settlement and by failing to include a provision in the judgment stating that appellants' New Mexico claims were not released. Appellants raised no point of error challenging the trial court's ruling that they lack standing to file their post-judgment motion. ⁴

Both Meridian and Altheide filed motions to dismiss this appeal for lack of jurisdiction because appellants do not have standing to prosecute the appeal. In addition, because appellants were not named plaintiffs and they failed to intervene, appellees argue that appellants are not "parties" entitled to file a post-judgment motion. ⁵ See TEX.R. CIV. P. 320 (requiring motions for new trial to be signed by the party or his attorney); TEX.R. CIV. P. 329b(e) (permitting a new trial if a timely motion for new trial is filed by any party ).

An unnamed class member is not technically a "party" under the rules. See Humphrey v. Knox, 244 S.W.2d 309, 312 (Tex.Civ.App.--Dallas 1951, writ ref'd n.r.e.) (in a class action, "those who are named are the 'parties' to the proceeding; the status of members who have not intervened or been named in the writ or the record is not in strict parlance that of parties"); City of Dallas v. Armour & Co., 216 S.W. 222, 224 (Tex.Civ.App.--Dallas 1919, writ ref'd) (appeals court justices, who were unnamed members of the plaintiff class, were not constitutionally disqualified because they "have not intervened or in some authorized manner been made parties on the record"). ⁶

A non-party's motion for new trial does not normally extend the time for perfecting their appeal. See State & County Mut. Fire Ins. Co. v. Kelly, 915 S.W.2d 224, 227 (Tex.App.--Austin 1996, orig. proceeding) (holding that only a motion for new trial filed by a party of record automatically extends the trial court's plenary power); Southern County Mut. Ins. Co. v. Powell, 736 S.W.2d 745, 748 (Tex.App.--Houston [14th Dist.] 1987, no writ) (holding that only parties have standing to file a motion for new trial); see also TEX.R.APP. P. 41(a)(1) (permitting perfection of appeal ninety days after judgment if any party has timely filed a motion for new trial). Appellants did not request an extension of time for perfecting their appeal under TEX.R.APP. P. 41(a)(2). Therefore, because the appeal bond was filed more than thirty days after judgment, without an effective post-judgment motion to extend the appellate timetable, appellees contend the appeal was not perfected timely. See TEX.R.APP. P. 40(a), 41(a), 46, 60(a)(1).

In addition to the issue of appellants' standing to file a post-judgment motion, our analysis of appellants' status is also relevant to their ability to pursue this appeal as an unnamed party. Generally, only parties to an action have standing to appeal. Marino v. Ortiz, 484 U.S. 301, 304, 108 S.Ct. 586, 587-88, 98 L.Ed.2d 629 (1988) (rejecting application of an exception for persons whose interests are affected by a judgment and stating that "the better practice is for such a non-party to seek intervention for purposes of appeal"). A non-party may properly become a party for purposes of appealing an adverse final judgment by intervening in the action. Id. Texas state courts have not directly addressed the issue of the standing of an unnamed class member, who elected not to opt out of a court-approved settlement, to appeal the judgment approving the settlement. ⁷ Because the federal class action rule is almost identical to the Texas rule, Texas state courts frequently use federal case law for guidance. See, e.g., General Motors Corp. v. Bloyed, 916 S.W.2d 949, 954 n. 1 (Tex.1996) ("In our analysis of Texas Rule of Civil Procedure 42, we are guided by analysis of Federal Rule of Civil Procedure 23, from which Rule 42 was derived."); Ball v. Farm & Home Sav. Ass'n, 747 S.W.2d 420, 422-23 (Tex.App.--Fort Worth 1988, writ denied) (noting that because rule 42 is patterned after the federal rule, federal decisions and authorities are instructive). The overwhelming majority of federal courts require an unnamed class member to intervene to have standing to appeal. ⁸ See, e.g., In re Brand Name Prescription Drugs Antitrust Litigation, 115 F.3d 456, 457-58 (7th Cir.1997); Shults v. Champion Internat'l Corp., 35 F.3d 1056, 1061 (6th Cir.1994); Gottlieb v. Wiles, 11 F.3d 1004, 1009 (10th Cir.1993); Loran v. Furr's/Bishop's Inc., 988 F.2d 554 (5th Cir.1993); Croyden Assocs. v. Alleco, Inc., 969 F.2d 675, 680 (8th Cir.1992), cert. denied, 507 U.S. 908, 113 S.Ct. 1251, 122 L.Ed.2d 650 (1993); Guthrie v. Evans, 815 F.2d 626, 627 (11th Cir.1987). In Walker v. City of Mesquite, the Fifth Circuit specifically held that unnamed class members do not have standing to appeal an order approving a settlement in a class action unless they have intervened in the court below. 858 F.2d 1071, 1074 (5th Cir.1988).

In Gu...