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Looney v. Chesapeake Energy Corp.

United States District Court, W.D. Arkansas, Fort Smith Division

January 13, 2017

BILLY C. LOONEY; GOODWIN & HERMAN ASSOCIATES, LLC, an Arkansas limited liability company; and SILOAM MINERALS, LLC, an Arkansas limited liability company PLAINTIFFS
v.
CHESAPEAKE ENERGY CORPORATION, an Oklahoma corporation; CHESAPEAKE OPERATING, LLC, formerly doing business as CHESAPEAKE OPERATING, INC., an Oklahoma corporation; CHESAPEAKE EXPLORATION, LLC, an Oklahoma limited liability company; and CHESAPEAKE ENERGY MARKETING, LLC, formerly doing business as CHESAPEAKE ENERGY MARKETING, INC., an Oklahoma Corporation DEFENDANTS

          ORDER OF FINAL APPROVAL AND JUDGMENT

          TIMOTHY L. BROOKS UNITED STATES DISTRICT JUDGE

         This matter comes before the Court upon the parties' Joint Motion for Final Approval of the Class Action Settlement (Doc. 53). The Motion is hereby GRANTED, and the Court makes the following findings:

         1. Plaintiffs filed their original Complaint on June 3, 2015. An Amended Complaint was filed on June 23, 2015. Plaintiffs' Amended Complaint alleges claims for breach of contract, breach of common law and statutory duties, violations of Ark. Code Ann. § 15-74-601, et seq. and § 15-74-701, et seq., violations of the Arkansas Deceptive Trade Practices Act, unjust enrichment, and accounting of royalties due and owing. Plaintiffs are seeking compensatory and statutory damages and injunctive relief.

         2. The parties have negotiated a Class Settlement Agreement (Doc. 36-1). Through this Class Settlement Agreement, Defendants will fully and completely satisfy any and all claims of Class Members by paying Class Members a total payment of $3, 250, 000. The cost of administration of the settlement, class representative fees and attorneys' fees, and costs of Class Counsel will be paid from the $3, 250, 000 Settlement Fund. By entering into the Class Settlement Agreement, neither Plaintiffs nor Defendants make any admissions relating to the claims and defenses raised in this lawsuit.

         3. On April 1, 2016, the parties filed an Agreed Motion for Preliminary Approval of Class Settlement Agreement and Approval of Notice to Settlement Class Members (Doc. 36), seeking preliminary approval of a Class Settlement Agreement that resolves the claims of the Settlement Class.

         4. The Settlement Class includes the following:

All non-excluded persons and entities who have, during the Class Period, received one or more gas royalty payments directly from Chesapeake under an Arkansas Lease, according to the business records maintained by Chesapeake. The Settlement Class excludes (i) Chesapeake and their respective predecessors, successors and affliates; (ii) those persons or entities whose Owner Numbers are delineated on Exhibit F attached to the Class Settlement Agreement, all of whom have reached a resolution with Chesapeake or are presently litigating their claims outside of the Looney case, according to Chesapeake's records; (iii) those persons or entities whose Owner Numbers are delineated on Exhibit G attached to the Class Settlement Agreement, all of whom were members of the settlement class in Vanoven et al. v. Chesapeake Energy Corporation, et al. Case No. 4:10-cv-158-BSM (U.S.D.C. E.D. Ark.), according to Chesapeake's records; (iv) those persons or entities whose Owner Numbers are delineated on Exhibit H attached to the Class Settlement Agreement, all of whom have royalties that have escheated, according to Chesapeake's records; (v) the federal government; (vi) legally-recognized Indian Tribes; and (vii) any person who serves as a judge in this civil action and his/her spouse.

(Doc. 36-1, p. 8, ¶ 1.32).

         5. The Class Settlement Agreement describes the claims that are being settled on behalf of the Class (defined as the "Settled Claims"), sets forth the terms of the parties' settlement, and incorporates the terms of this Order of Final Approval and Judgment.

         6. After a hearing on the parties' Preliminary Approval Motion, this Court entered an Order (Doc. 42), dated June 1, 2016 (the "Preliminary Approval Order"), preliminarily approving the Settlement described in the Class Settlement Agreement and directing that notice of the proposed Settlement be mailed to the Settlement Class. The Court also set a hearing for 1:30 p.m. on September 26, 2016, to determine whether the proposed Settlement should be given final approval, as fair, reasonable, and adequate.

         7. In accordance with the Court's Preliminary Approval Order, the Settlement Administrator caused to be mailed to potential members of the Settlement Class (for whom Defendants had addresses available from their accounting records) a notice (the "Settlement Notice") in the form approved by the Court in the Preliminary Approval Order. The Affidavit of Brian Manigault (Doc. 53-2) provides additional information concerning the mailing of the Settlement Notice, as well as other actions that were undertaken by the Settlement Administrator to provide notice to the Settlement Class. The Court now finds that the Settlement Notice constituted the best and most practicable notice under the circumstances and included individual notice to all members of the Settlement Class who could be identified by reasonable efforts, thereby complying fully with due process and Rule 23 of the Federal Rules of Civil Procedure.

         8. On September 26, 2016, the Court held a final approval hearing, at which time all interested persons were given an opportunity to be heard. The Preliminary Approval Order had afforded Class Members an opportunity to file objections to the Settlement, and the Court received written objections from one individual, E. Gary Torelli, and one group known as the "Cambiano Objectors."[1] During the hearing on September 26, 2016, counsel for the Cambiano Objectors submitted evidence and presented witnesses regarding their objections. Mr. Torelli chose not to appear at the hearing.

         The Court fully considered all objections-save one lodged by Mr. Torelli concerning the reasonableness of Class Counsel's request for attorneys' fees, which will be addressed by separate order-and on October 7, 2016, entered a Memorandum Opinion and Order on Objections to Final Approval of Class Action Settlement (Doc. 87), in which the Court overruled all merits-based objections except one. The one objection that was sustained by the Court involved the proper procedure for providing CAFA Notice of Settlement to "the appropriate State official of each State in which a class member resides, " pursuant to 28 U.S.C.§ 1715(b). By Proof of Service dated October 31, 2016 (Doc. 88), Defendants have now established that they have served notice of the proposed Class Settlement Agreement on all state attorneys general as of October 3, 2016. No objections were filed by the deadline, and thus, the statutory notice requirements are now satisfied. As a result, the Court finds that no outstanding merits-based objections exist with respect to the Class Settlement Agreement, and the CAFA-related objection that was previously sustained is now MOOT. The Court further finds that approval of the ...


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