Anderson Living Trust v. Energen Resources Corporation, No. 13-cv-909, 2019 WL 6618168 (D.N.M. Dec. 5, 2019)

Court determines that differences in oil and gas lease agreements did not preclude certification of a class that brought claims for underpayment of royalties under the various lease agreements.

In Anderson, the plaintiffs, consisting of Colorado royalty owners with interests in numerous oil and gas lease agreements, sought to certify a class “based on a single underpayment theory, namely that [the defendant] failed to pay additional royalties on gas used as fuel.”

On the issue of commonality, the defendant claimed that “variations in the lease language preclude a finding of commonality.” The court disagreed and determined that the leases created a single and uniform obligation: to pay Colorado royalty owners royalties on gas used as fuel. Similarly, the defendant also argued that the differences in gas quality, and the attendant issue of marketability, defeated commonality. Yet the court again disagreed and determined that those differences related “more to the calculation of damages, which is not before the Court.” Therefore, the court determined there was sufficient commonality.

On the issue of predominance, the defendant advanced a similar argument that “differences in lease provisions regarding post-production use of fuel gas means that damages must be calculated individually, and that different damages defeat predominance.” The court again disagreed and determined that the predominant question was whether the defendant owed the class royalty payments and failed to pay, and that individual damage calculations, standing alone, cannot defeat class certification.

Finally, the court considered the issues of superiority and ascertainability, concluding that individual lawsuits would be too expensive and that all putative class members were present lease owners who could be readily identified. The court agreed with plaintiff that it does not make sense that the defendant would pay royalties without knowing who it was paying. After determining that the plaintiff class satisfied all requirements of Rule 23, the court certified the class.

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