Well Royalties Dispute Heads to Supreme Court
WASHINGTON (CN) - The Supreme Court on Monday took up a class action alleging underpayment of royalties for certain wells in Kansas.
Brandon Owens filed the 2012 lawsuit in Wilson County, Kans., against Dart Cherokee Basin Operating Company LLC and Cherokee Basin Pipeline LLC, but the defendants removed the action to U.S. District Court.
The complaint alleges underpayment of royalties from wells in which the defendants have a working interest in Kansas wells, dating back to Jan. 1, 2002.
Claiming that it operates approximately 700 wells in Kansas, and that there are approximately 400 royalty owners with interests in the 700 wells at issue, Dart Cherokee said that the amount in controversy exceeded $8.2 million, thus satisfying the threshold for federal jurisdiction under the Class Action Fairness Act.
After mediation proved unsuccessful, U.S. District Judge Julie Robinson remanded the case to state court in May 2013.
The ruling notes that the Owens never specified monetary damages in his petiton and that the defendants offered no documentation or affidavits explaining how they arrived at the $8.7 million figure.
Since the plaintiffs did not include a claim based on statutory liability nor a claim for punitive damages, the evidence simply does not support that the amount in controversy exceeds $5 million, the judge found.
A month later, the 10th Circuit shot down a request by the defendants to appeal. The brief order noted that one of the three judges on the panel would have green-lit the appeal.
In granting the defendants a writ of certiorari Monday, the Supreme Court followed its custom of not issuing any comment.
It noted only that the Chamber of Commerce of the United States of America could file a brief as amicus curiae.