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Devazier v. Caruth

United States District Court, E.D. Arkansas, Eastern Division

July 13, 2016

STEPHANIE DEVAZIER, as class representative in Sara Stewmon vs. SEECO, Inc., Desoto Gathering Company, LLC and Southwestern Midstream, PLAINTIFF
v.
BEN H. CARUTH, DEFENDANTS

          OPINION AND ORDER

          KRISTINE G. BAKER UNITED STATES DISTRICT JUDGE.

         Plaintiff Stephanie Devazier is the appointed class representative of a state class action ("Stewmon") that is pending before the Arkansas Supreme Court (Dkt. No. 59, at 2). See SEECO, Inc. v. Stewmon, CV-15-198 (Ark. filed Mar. 11, 2015). Defendants are counsel for both the plaintiff ("Smith Class Counsel") and defendants ("Smith Defense Counsel") in Smith v. SEECO, Inc., et al., 4:14-cv-435, a federal class action that is currently pending before the Honorable Brian S. Miller of the United States District Court for the Eastern District of Arkansas. On April 11, 2016, Judge Miller entered an order granting Smith Class Counsel's second motion for class certification and directed Smith Class Counsel to submit a proposed class notice plan within 30 days. By this action, Ms. Devazier seeks to enjoin Smith Class Counsel and Smith Defense Counsel from communicating directly with any members of the class she purportedly represents, including through Court-approved class notice, which is required under Rule 23 of the Federal Rules of Civil Procedure. Ms. Devazier also requests that the Court order that "any communication involving any of the [Stewmon class] be sent only to their duly appointed class counsel, E. Dion Wilson, B. Michael Easley and Timothy R. Holton, or in the alternative, with the express consent of their appointed counsel" (Dkt. No. 52, at 20).

         Currently pending before the Court are Ms. Devazier's emergency motion for preliminary injunction, Smith Class Counsel's motion to dismiss, Smith Defense Counsel's motion to dismiss for lack of standing and failure to state a claim, Smith Defense Counsel's renewed motion to dismiss for lack of standing and failure to state a claim, and Smith Class Counsel's renewed motion to dismiss (Dkt. Nos. 6; 33; 41; 55; 58).[1] For the following reasons, the Court grants Smith Defense Counsel's renewed motion to dismiss for lack of standing and failure to state a claim and Smith Class Counsel's renewed motion to dismiss for lack of standing and failure to state a claim (Dkt. Nos. 55; 58). All other pending motions are denied as moot. Ms. Devazier's complaint is dismissed.

         I. Background

         Unless otherwise noted, the following information is taken from the memorandum of law in support of Smith Defense Counsel's renewed motion to dismiss for lack of standing and failure to state a claim (Dkt. No. 56). In recent years, oil and gas royalty owners have filed multiple class action lawsuits against Southwestern Energy Company and its affiliates for the alleged underpayment of royalties. In 2014, separate Arkansas state courts certified classes in two of these lawsuits: (1) Snow v. SEECO, Inc., et al., which consisted of "Arkansas citizens with particular oil and gas leases[;]" and (2) Stewmon v. SEECO, Inc., et al., which consisted of "Arkansas residents with the same leases to which no party to the lease is a non-Arkansas resident" (Dkt. No. 56, at 4). Ms. Devazier is the class representative, and her counsel in this matter is class counsel for the Stewmon class. The class certification orders in Snow and Stewmon were appealed, and the appeal remains pending before the Arkansas Supreme Court. Class notice in both Snow and Stewmon has yet to be approved or sent to potential class members.

         On July 25, 2014, Connie Jean Smith, who is not represented by the same counsel as Ms. Devazier, filed a federal class action suit in the Eastern District of Arkansas. Ms. Smith initially sought to certify "a ‘leftovers' class of all royalty owners but the members of the state court Snow and Stewmon classes" (Dkt. No. 56, at 4). Her initial request was denied after the Court found that the class was not ascertainable under Rule 23(a). Ms. Smith later moved for "certification of a class of SEECO cost-bearing royalty owners lacking an Arkansas address or, alternatively, a broader class of all costbearing royalty owners" (Dkt. No. 56, at 5). On April 11, 2016, Judge Miller certified the broader class, named Ms. Smith as class representative, and appointed her lawyers as class counsel. Judge Miller acknowledged that "adopting this broader definition overlaps this case's affiliate cases in Snow and Stewmon, which some scholars have cautioned against." Smith v. SEECO, Inc., et al., 4:14-cv-435 (E.D. Ark. Apr. 11, 2016) (order granting class certification). However, Judge Miller preferred certifying the broader class, finding that excluding royalty owners to avoid overlap with Snow and Stewmon would have "serious practical effects that cannot be understated" and would "promote[] the potential for inconsistent judgments and undercut[] the very purpose of the class action." Id.

         On April 26, 2016, Ms. Devazier filed this action in the Circuit Court of St. Francis County, Arkansas (Dkt. No. 1, at 1). Smith Defense Counsel removed the case to this Court on April 28, 2016 (Dkt. No. 1, at 1). After Smith Class Counsel and Smith Defense Counsel filed separate motions to dismiss, Ms. Devazier filed an amended complaint in which she alleges that the defendants have acted improperly in this and other unrelated actions (Dkt. No. 52).

         While this action was pending, counsel for Ms. Devazier, acting on behalf of an alleged Smith class member, attempted to intervene in Smith v. SEECO, Inc. to challenge the adequacy of Smith Class Counsel and the proposed notice plan. Judge Miller denied the motions, finding that intervention was either unnecessary or premature. Smith v. SEECO, Inc., et al., 4:14-cv-435 (E.D. Ark. June 3, 2016) (order denying motions to intervene without prejudice). Ms. Devazier's counsel filed an interlocutory appeal of Judge Miller's Order as well as a motion to stay Smith pending appeal.

         II. Jurisdiction

         As a preliminary matter, the Court must determine whether it has subject matter jurisdiction over this action. Defendants, who removed this case from state court, bear the burden of proving that the jurisdictional threshold is satisfied. Bell v. Hershey Co., 557 F.3d 953, 956 (8th Cir. 2009). In their notice of removal and in subsequent filings, defendants argue that the Court has jurisdiction pursuant to the Federal Officer Removal Statute, 28 U.S.C. § 1442 (Dkt. Nos. 1; 50; 51).[2] The Federal Officer Removal Statute provides that:

(a) A civil action or criminal prosecution that is commenced in a State court and that is against or directed to any of the following may be removed by them to the district court of the United States for the district and division embracing the place wherein it is pending:
(1) The United States or any agency thereof or any officer (or any person acting under that officer) of the United States or of any agency thereof, in an official or individual capacity, for or relating to any act under color of such office or on account of any right, title or authority claimed under any Act of Congress for the apprehension or punishment of criminals or the collection of the revenue. . . .
(3) Any officer of the courts of the United States, for or relating to any act under color of office or in the performance of his duties[.]

28 U.S.C. § 1442. Defendants, who are all private attorneys, do not contend that they are federal officials for the purposes of this action, but rather they contend that they "are persons acting under an officer of the United States, in an official or individual capacity, for or relating to any act under color of such office[, ]" making this case removable under § 1442(a)(1) (Dkt. No. 1; ¶ 5). The federal official they identify is Judge Miller, who has directed defendants to "prepare notices to be sent to members of the class certified in Smith v. SEECO" (Dkt. No. 1; ¶ 5). At the Court's hearing on this matter, Ms. Devazier confirmed that she did not take a position as to whether the Court has subject matter jurisdiction over this case.

         A. Federal District Judge As An Officer Of The United States For The ...


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