United States District Court, E.D. Arkansas, Western Division
CONNIE JEAN SMITH, individually and on behalf of all others similarly situated PLAINTIFFS
SEECO, INC. n/k/a SWN Production Arkansas, LLC., DEFENDANTS
defendants' motion to disqualify class counsel, remove
the class representative, and decertify the class [Doc. No.
417], and defendant DeSoto Gathering Company's motion for
a one-week continuance [Doc. No. 418] are denied.
Motion to Disqualify Counsel, Remove Representative, and
motion [Doc. No. 417] is denied because class counsel is
adequate, Connie Jean Smith is an adequate class
representative, and there is no reason this case cannot
proceed as a class action.
initial matter, class counsel has not yet formally responded
to this motion, which defendants filed on the Sunday
afternoon of Memorial Day weekend. Nevertheless, defendants
quickly sought mandamus relief, asserting that I refused to
rule on their motion. The record is well-developed, and class
counsel recently filed a brief response to a related filing
the day prior to defendants' motion. See Doc.
No. 416. Thus, there is sufficient information in the record
to understand the parties' positions and issue a
gist of defendants' motion is that class counsel has
become inadequate. It is well- established that
“[c]lass counsel must fairly and adequately represent
the interests of the class.” Fed.R.Civ.P. 23(g)(4).
Although there is flexibility in how class counsel's
adequacy is assessed, the general theme is that counsel must
“be qualified, experienced and generally able to
conduct the proposed litigation.” Eisen v. Carlisle
and Jacquelin, 391 F.2d 555, 562 (2nd Cir. 1968). At the
time the class was certified, the record demonstrated that
class representative Connie Jean Smith selected adequate
counsel. Doc. No. 186 at 11-12. Nevertheless, courts have an
ongoing duty to monitor the adequacy of representation.
See Fed. R. Civ. P. 23(g)(1)(E); In re Integra
Realty Res., Inc., 262 F.3d 1089, 1112 (10th Cir. 2001).
23(g)(1)(A) provides four factors that courts
“must” consider in assessing adequacy. When
measured by these factors, class counsel has been more than
adequate. For example, counsel's collective experience,
which must be considered under Rule 23(g)(1)(A)(ii), in oil
and gas litigation and other complex matters, is impressive.
See In re Vicuron Pharmaceuticals, Inc. Securities
Litigation, 233 F.R.D. 421, 428 (E.D. Pa. 2006) (noting
proposed counsel's experience); e.g., Danielson
Law Firm Profile, Doc. No. 46-28 (Erik Danielson has
represented mineral owners and operators in multiple cases
throughout Arkansas for more than nine years); Decl. Geoffrey
C. Jarvis ¶ 7, Doc. No. 216 (new addition to class
counsel team was lead or co-lead counsel on multiple security
class actions); Decl. Melissa L. Troutner ¶¶ 6-7,
Doc. No. 309-1 (new addition to class counsel team with
experience representing large companies and working for the
federal judiciary, including work on class actions).
also clear that counsel's command of the applicable law
and resources available to prosecute this case are more than
adequate, thus satisfying Rule 23(g)(1)(A)(iii) and (iv). For
example, class counsel routinely submits thoroughly
researched and compelling briefs on both routine matters and
novel legal issues. See, e.g., Rambarran v. Dynamic
Airways, LLC, Case No. 14-CV-10138 KBF, 2015 WL 4523222,
*9 (S.D.N.Y. 2015) (finding proposed class counsel inadequate
when “counsel has demonstrated a lack of ability to
litigate on behalf of the class” by failing to make
timely motions, prepare an adequate factual record, and
prepare briefs with limited citations); Moss v. Lane
Co., 50 F.R.D. 122, 126 (W.D. Va. 1970) (noting adequacy
“as demonstrated by the pleadings and other
memoranda” in case). They were successful in obtaining
class certification, defending against defendants'
well-researched summary judgment motions, and complying when
directed to perform administrative tasks on behalf of the
class. See, e.g. Doc. No. 279 at 13 (directing class
representative to audit exclusion requests and provide
updated report); Doc. No. 283 (updated report provided eight
days later). Their ability to vigorously prosecute this case
on the class's behalf is best demonstrated by
successfully balancing these responsibilities with the unique
challenges presented in this case, including filing responses
to motions on short notice and defending against a lawsuit
filed against them in their personal capacity by lawyers in a
competing state court class action. But see, e.g., Kurczi
v. Eli Lilly & Co., 160 F.R.D. 667, 679 (N.D. Ohio
1995) (finding class counsel was inadequate when “the
proposed class failed to research legal issues adequately and
to construct thoughtful pleadings” and were
“incapable of handling the workload involved in
processing the extensive discovery material which necessarily
arises in an action such as this”). Frankly, class
counsel's performance thus far has been nothing short of
class counsel's skill in representing the class,
defendants now argue class counsel cannot continue because of
unethical behavior. Rule 23(g)(1)(B) provides that courts
“may consider any other matter pertinent to
counsel's ability to fairly and adequately represent the
interests of the class[.]” For example, “any
conduct that suggests that class counsel may have been
engaging in unethical behavior is relevant in determining the
adequacy of the representation.” E. Maine Baptist
Church v. Regions Bank, Case No. 405-CV-962 CAS, 2007 WL
3022220, at *5 (E.D. Mo. Oct. 12, 2007) (quotations omitted).
argument focuses on a fee-sharing agreement between class
counsel in this federal case (“Smith”)
and a related state court class action, Snow v.
SEECO (“Snow”). Smith and
Snow began as two putative class actions proceeding
on parallel paths with no chance of intersection. In
Snow, which was filed in state court in 2010, the
class representative's original complaint sought a class
consisting of “persons or entities who are citizens
of the State of Arkansas.” Compl., Snow v.
SEECO, Inc., , Case No. 15CV-10-126 (Conway County Cir.
Ct., Ark. May 7, 2010) (emphasis added); Matter of
Phillips, 593 F.2d 356, 358 (8th Cir. 1979) (proper to
take judicial notice of state court pleadings absent a
dispute). In Smith, the class representative sought
a class of persons and entities excluding “citizens of
the State of Arkansas.” Compl. ¶ 48, Doc. No. 1
(filed July 25, 2014). In other words, when Smith
and Snow began, they sought to litigate the same
issues, on the same leases, and against the same defendants,
but Smith would represent everyone that
Snow did not. On October 14, 2014,
Snow's class became certified. SEECO, Inc.
v. Snow (“SEECO”), 506 S.W.3d 206,
210 (Ark. 2016).
to the record, counsel for defendant SEECO contacted
Snow's counsel after Snow was certified
“to discuss the possibility of a global resolution of
the claims.” Doc. No. 417-2 at 7; Smolen Aff. ¶ 7,
Doc. No. 417-5 (attorney representing all statements in the
brief filed in state court, Doc. No. 417-2, are true and
accurate and that he has personal knowledge to substantiate
that conclusion). In December 2014, counsel for Snow
and counsel for Smith discussed a plan for the
future prosecution of both cases, and they entered into a
“fee sharing agreement, ” which until recently,
was apparently intended to remain confidential. Id.
at 8. Smith class counsel does not deny the
existence of the agreement. See Doc. No. 416 at 1.
In reviewing that agreement, it appears Snow and
Smith counsel agreed that their intention was to
continue on their respective tracks - i.e., Snow
would only focus on Arkansas citizens and Smith
would stick to everyone else. Doc. No. 417-3 at 2. The
agreement also provided that if either class negotiated a
settlement that affected the claims of the other class, the
lawyers would share the court-approved attorneys' fees.
February 2015, while Snow was hung up on appeals in
Arkansas state courts, see SEECO, 506 S.W. at 211
(“SEECO filed a notice of appeal on October 28,
2014.”), a mediation was held in California in an
attempt to reach a global settlement. Doc. No. 417-2 at 10.
That mediation was unsuccessful. Defendants and class counsel
dispute whether the agreement survived after mediation.
See Doc. No. 416 at 2 (“However, once that
mediation failed, the fee sharing agreement was no longer in
2015, while appeals in Snow were pending, Smith
attempted to certify a class that excluded “members of
the class certified in Eldridge Snow v. SEECO,
Inc.” and another related state court class
action. Doc. No. 45 at 2. The motion was denied on November
17, 2015, because it was impossible to determine who was in
those state court classes and who was not. Doc. No. 110 at 4.
In December 2015, Smith moved for certification again, this
time excluding royalty owners “with an Arkansas
address.” Doc. No. 113 at 2. If her request was denied,
Smith also proposed an alternative class without the
“Arkansas address” exclusion. Id. at 12.
In response, defendants collectively argued that Smith's
proposed class with the “Arkansas address”
exclusion “creates unnecessary confusion and opens the
door to compatible judgments, simply to preserve what appears
to be a division of proceeds among cooperating plaintiff
lawyers in the state and federal lawsuits.” Doc. No.
125 at 1.
April 11, 2016, Smith's alternative class was certified -
i.e., a class of royalty interest owners without the
“Arkansas address” exclusion. Doc. No. 186. On
September 12, 2016, notice was sent by first-class mail to
over 12, 000 royalty interest owners. See Hamer Dec.
¶¶ 3-4, Doc. No. 244. The notice period ended soon
thereafter, with relatively few exclusions received, and of
those received, many were from attorneys involved in state
court class actions seeking en masse exclusion.
See Doc. No. 279 at 7-12. The Snow
appellate saga finally ended on January 19, 2017, when the
Supreme Court of Arkansas denied rehearing on their decision
to affirm certification of the Snow “Arkansas
citizens” class. SEECO, Inc. v. Snow, Case No.
15-197, 2017 Ark. LEXIS 13, at *1 (Jan. 19, 2017). For much
of 2017, the relationship between Snow and
Smith persisted: Smith overlapped with
Snow, but only Smith was ready for trial.
is set for trial in four days. On May 16, 2017, Snow
counsel and defendants attended mediation without
Smith counsel's knowledge. Doc. No. 343 at 3;
Doc. No. 416 at 2. Although Snow only consisted of
“Arkansas citizens, ” Snow class counsel
negotiated a settlement for all royalty interest owners -
i.e., the same or similar arrangement SEECO
approached Snow counsel with back in late 2014. That
settlement paperwork reflecting the new class definition was
signed on May 18, 2017, which is the same date a state court
judge preliminarily approved ...