United States District Court, D. New Mexico
STEVEN J. ABRAHAM, and H LIMITED PARTNERSHIP on behalf of themselves and others similarly situated, Plaintiffs,
WPX ENERGY PRODUCTION, LLC, f/k/a WILLIAMS PRODUCTION COMPANY, LLC; WILLIAMS FOUR CORNERS, LLC; and WILLIAMS ENERGY RESOURCES, LLC, Defendants.
Eugene Gallegos Michael J. Condon Gallegos Law Firm, P.C.
Santa Fe, New Mexico Attorneys for the Plaintiffs
Gillett Dustin L. Perry Hall Estill Hardwick, P.C. Tulsa,
Oklahoma and Christopher A. Chisman Holland & Hart LLP
Denver, Colorado and Mark F. Sheridan Bradford C. Berge
Robert J. Sutphin John C. Anderson Elisa C. Dimas Holland
& Hart LLP Santa Fe, New Mexico Attorneys for the
MEMORANDUM OPINION AND ORDER
MATTER comes before the Court on: (i) the
Plaintiffs' Motion to Alter or Amend and to Reconsider
Memorandum Opinion and Order [Doc. 252], filed September 15,
2016 (Doc. 255)("Motion to Amend"); and (ii) the
Plaintiffs' Second Motion for Class Certification, filed
September 15, 2016 (Doc. 256)("Second Motion for Class
Certification"). The Court held a hearing on January 24,
2017. The primary issues are: (i) whether the Plaintiffs may
raise a new class definition not in the Fourth Amended
Complaint, filed October 31, 2013 (Doc. 96-1); (ii) if the
Court required the Plaintiffs to amend their Complaint before
proposing a new class definition, whether rules 15(a) and
16(b)(4) bar such an amendment; (iii) whether the Plaintiffs
previously waived their new class definition by proposing and
withdrawing an older one; (iv) whether the new proposed class
is ascertainable; (v) whether the new proposed class
definition creates commonality; and (vi) whether the new
proposed class definition will allow common issues to
predominate over individual ones. The Court concludes that
(i) the Plaintiffs may raise a new class definition not in
the operative complaint; (ii) even if the Plaintiffs could
not do so, rules 16(b)(4) and 15(a) would not bar the
Plaintiffs from amending their complaint; (iii) the
Plaintiffs have not previously waived their new class
definition; (iv) the proposed class definition is
ascertainable; (v) the proposed class definition does not
create commonality; and (vi) common issues would not
predominate over individual ones. Accordingly, the Court
denies the Motion to Amend and the Second Motion for Class
Steven J. Abraham and H Limited Partnership filed this class
action in August 2012 to recover damages for gas royalty
underpayments that Defendant WPX Energy Production L.L.C.
("WPX Energy") allegedly makes. Motion to Amend at
1. WPX Energy pays the plaintiff royalty owners on a payment
method called the keep-whole payment methodology.
See Motion to Amend at 1. This payment method
"pays royalty on a well's volume of produced MMbtus
(British Thermal Units) based on methane volume and omits
royalty [payments] on the value of [Natural Gas
Liquids]" or NGLs. Motion to Amend at 2. The
Plaintiffs' major contention is that this payment method
does not pay them royalties on the value of refined NGLs.
See Motion to Amend at 1. Previously, the Plaintiffs
moved the Court to certify them as a class, which the Court
denied. See Abraham v. WPX Production Productions,
LLC, 317 F.R.D. 169, 175 (D.N.M. 2016)(Browning,
J.)("Abraham"). The Court denied the previous
motion for class certification for several reasons. First,
because the Plaintiffs' class definition includes only
those wells whose gas is or has been processed at three
specific processing plants, the Court cannot adequately
ascertain the class. Second, because the Plaintiffs'
class definition includes only that gas that was processed
for natural gas liquid extortion and marketing, the Court
must determine which gas was processed.
317 F.R.D. at 175. In other words, the Court held that the
proposed class was not ascertainable. See 317 F.R.D. at 254.
Court further concluded that "how the Defendants should
have paid the Plaintiffs . . . varies between leases"
because of "textual variations among the leases."
317 F.R.D. at 175. The Court ruled that these factors
destroyed two key requirements of class certification,
commonality and predominance. See Fed.R.Civ.P.
23(a)(2), (b)(3). The Court also held, however, that the
Plaintiffs met the other requirements for class
certification. See Abraham, 317 F.R.D. at 175.
Because the Court ultimately denied the Motion, the
Plaintiffs have now filed a Motion to Amend and Second Motion
for Class Certification.
Court will outline the basic allegations and legal arguments
underlying the Plaintiffs' motions. The Court will also
describe the Defendants' responses to those arguments.
Finally, the Court will summarize the hearing on these
The Motion to Amend.
Plaintiffs contend that the Court should alter or amend its
opinion in Abraham based on a new proposed class
definition. See Motion to Amend at 5. Specifically,
the Plaintiffs have proposed the following new class
The class consists of all present and former owners of
royalty and overriding royalty from August 2006 to the
present whose instruments provide for payment on
"proceeds" or on "market value at the
well" by WPX Energy Production LLC and its corporate
predecessors on production of natural gas from San Juan Basin
conventional formations and whose royalty and overriding
royalty has been calculated on a "keep-whole"
method omitting payment on the value of the processed natural
gas liquids portion of the production.
The New Mexico subclass consists of present and former owners
of royalty and overriding royalty that burden WPX Energy
Production LLC oil and gas leases and wells in the San Juan
Basin in New Mexico.
The Colorado subclass consists of present and former owners
of royalty and overriding royalty that burden WPX Energy
Production LLC oil and gas leases and wells in the San Juan
Basin in Colorado.
The Class membership excludes the United States of America in
its own right and as trustee for Indian tribes or Indian
lessors and any other lessors for which an agency of the
Secretary of Interior administers royalties. The class
excludes the State Land Board of Colorado and the
Commissioner of Public Lands of New Mexico and oil and gas
leases issues by either of those states. The class excludes
WPX Energy Production, LLC f/k/a Williams Production Company,
LLC, Williams Four Corners, LLC and Williams Energy
Resources, LLC and their predecessors, successors and
Motion to Amend at 5-6. The Plaintiffs make several arguments
why this class definition improves upon the original one.
First, the Plaintiffs contend that, unlike in the original
class definition, "the class members can be identified
without regard to where their gas was processed, or whether
it was processed on the WFC system." Motion to Amend at
6. The Plaintiffs assert, "[t]he class includes owners
who are paid on the keep-whole methodology regardless of the
circumstance of the gas processing." Motion to Amend at
6. They assert that "WPX records provide a database
which can identify the class members." Motion to Amend
the Plaintiffs argue that "the amended class definition
addresses many of the Court's concerns about commonality,
" because, "[d]uring the relevant period, WPX has
uniformly paid royalty and overriding royalty to the members
of the putative class on a keep-whole method for production
gathered and processed by WFC . . . ." Motion to Amend
at 7. According to the Plaintiffs, this royalty payment
system "calculates payment to class members despite
variables in gas flow delivery to processing plants and
whether in given instances some of the class wells' gas
stream may not be processed." Motion to Amend at 7.
the issue of predominance, the Plaintiffs contend that
"[c]ommon issues will predominate where the class is
limited to those owners paid on proceeds and market value of
gas at the well leases." Motion to Amend at 9.
Specifically, they argue that, under the new class
definition, "the Court must resolve the premier common
issue, whether plaintiffs are entitled to royalty on
processed NGLs, as to only two lease forms, "
"proceeds" leases and "market value of gas at
the well" leases. Motion to Amend at 9-10. The
Plaintiffs' key contention is that, despite the Court
previously categorizing all of the leases at issue into
eleven categories (plus another for illegible leases), only
two categories of leases exist under the Plaintiffs' new
class definition, namely, "proceeds" leases and
"market value" leases. Motion to Amend at 20;
Abraham, 317 F.R.D. at 274-75. The Plaintiffs
concede that the leases previously referenced as those in
Categories B and F are excluded from their new class
definition. See Motion to Amend at 20-21.
the Plaintiffs assert that, given the new class definition,
the Court should certify the Plaintiffs' claims for
breach of the implied covenant to market. See Motion
to Amend at 22. Their contention is that "WPX does not
market the NGLs for the benefit of the class under the
keep-whole methodology." Motion to Amend at 22. The
Plaintiffs argue that this conduct breaches the implied
covenant to market "as to all royalty owners who are
entitled to processed NGLs under their royalty
provisions." Motion to Amend at 22-23. According to the
Plaintiffs, the two categories of leases in their proposed
class - proceeds and market value leases - "entitle
royalty owners to payment on processed NGLs." Motion to
Amend at 23. The Plaintiffs conclude that, because those two
lease categories are allegedly entitled to payments on NGLs,
the implied covenant to market "applies to those two
lease types across the board." Motion to Amend at 23.
the Plaintiffs contend that their claim for breach of the
duty of good faith and fair dealing is also certifiable.
See Motion to Amend at 26. They argue that, because
WPX Energy has denied the class members payment on NGL
royalties, WPX Energy has breached the duty of good faith and
conclusion, the Plaintiffs ask the Court to amend its
decision in Abraham to conclude that the
Plaintiffs' new class definition satisfies all of the
rule 23 class certification requirements, and certify the
case as a class action based on claims for breach of
contract, breach of the duty of good faith and fair dealing,
and breach of the implied covenant to market. See
Motion to Amend at 27.
The Second Motion for Class Certification.
the Second Motion for Class certification repeats arguments
in the Motion to Amend. It states the Plaintiffs' new
class definition and again contends that the new definition
meets the rule 23(a)(2) commonality requirement. See
Second Motion for Class Certification at 2. It notes again
that, "[t]he proposed class definition eliminates the
processing issue and focuses on those owners who are paid on
the keep-whole methodology." Second Motion for Class
Certification at 4.
Second Motion for Class Certification also argues that the
new class definition satisfies the rule 23(b)(3) predominance
requirement. See Second Motion for Class
Certification at 7. Specifically, the Plaintiffs contend that
the question - "are the class members entitled to be
paid on the value of processed NGLs" - is answerable on
a class-wide basis under the new class definition. Second
Motion for Class Certification at 7. After resolving that
question, the Plaintiffs argue that "[t]he only lease
language inquiry required is: do proceeds (net and gross)
leases and market value at the well leases entitle the
lessors to share in the value of processed NGLs?" Second
Motion for Class Certification at 8. The Plaintiffs argue
that this question can be answered on a class-wide basis.
See Second Motion for Class Certification at 8-9.
Plaintiffs then reassert their argument that the Court should
certify their claims for beach of the implied covenant to
market and the duty of good faith and fair dealing.
See Second Motion for Class Certification at 10. The
Plaintiffs further reassert their argument that the Court
should certify their claim for civil conspiracy to breach
their royalty agreements. See Second Motion for
Class Certification at 11.
the Plaintiffs conclude by asking the Court to certify the
class based on the new class definition, and to certify their
claims for breach of contract, breach of the covenant of good
faith and fair dealing, breach of the implied covenant to
market, and civil conspiracy. See Second Motion for
Class Certification at 13. The Plaintiffs also request that
the Court appoint the named Plaintiffs, Steve Abraham and H
Limited, as class representatives, and appoint the Gallegos
Law Firm, P.C. as class counsel. See Second Motion
for Class Certification at 13.
The Response to the Plaintiffs' Motion to
respond to the Motion to Amend. See Defendants'
Response in Opposition to Plaintiffs' Motion to Alter or
Amend and to Reconsider Memorandum Opinion and Order, filed
November 2, 2016 (Doc. 260)("Response to Motion
1"). The Defendants briefly argue that the new class
definition "does not constitute a material change in
circumstances and thus does not support relief under Rule
23(c)(1)(C)." Response to Motion 1 at 6.
the Defendants assert that, "by pursuing and then
abandoning the 'keep-whole' aspect of their new
[class] definition, Plaintiffs waived it." Response to
Motion 1 at 6. The Defendants argue that the Plaintiffs had
previously offered a similar class definition, but later
"admitted that their proposed amendment was
'inappropriate' and voluntarily withdrew it.”
Response to Motion 1 at 6-7 (quoting Plaintiffs' Position
on Defendants' Motion to Determine Class Certification
Based on the Class Definition Contained in Plaintiffs'
Fourth Amended Complaint, filed September 23, 2015 (Doc.
242). On these facts, the Defendants conclude that the
Plaintiffs waived the "keep-whole" aspect of the
new class definition. Response to Motion 1 at 6-7.
Defendants then contend that "custom and usage evidence
supports the Court's Commonality and Predominance
rulings." Response to Motion 1 at 8. The Defendants note
that, in Abraham, "the Court correctly
concluded that 'the different industry custom and usage
evidence needed to identify each proposed class members'
royalty interest and determine how they should be paid'
is not common, and cuts against predominance." Response
to Motion 1 at 9-10 (quoting Abraham, 317 F.R.D. at
273). The Defendants add that, "at a trial on the
merits, evidence of trade usages could potentially bind H
Ltd, Mr. Abraham, [and others] to the meaning within the oil
and gas industry of disputed lease terms. Whether any of them
would be bound would be a question of fact as to each of
them." Response to Motion 1 at 11. The Defendants make
other arguments in support of the Court's previous
rulings regarding commonality and predominance. See
Response to Motion 1 at 12, 16, 17, 20, 22, 23. Most notably,
however, the Defendants assert that, "whether
considering 'proceeds' or 'market value'
leases, [nothing] require[s] that royalty be paid on
'processed gas.'" Response to Motion 1 at 27.
Specifically, the Defendants argue that the Court did not
hold in Abraham that "proceeds" leases
"require royalty payment on processed gas, and
hence, on the value of refined NGLs." Response to Motion
1 at 27 (emphasis in original). The Defendants refer to a
footnote in Abraham in which the court gave its
"inclinations about what some of the royalty terms mean
. . . 'Proceeds' . . . forbids paying NGL royalty on
a keep-whole basis." Abraham, 317 F.R.D. at 275
n.82. The Defendants note that this statement was merely the
Court's "inclination" and not a holding.
Response to Motion 1 at 27. "In contrast to its
'inclinations, ' the Court held . . . that
Plaintiffs' breach-of-contract claims "require an
individualized inquiry." Response to Motion 1 at 28
(citing Abraham, 317 F.R.D. at 263).
the Defendants argue that the "Plaintiffs' implied
duty to market and implied duty of good faith and fair
dealing claims do not satisfy commonality or
predominance." Response to Motion 1 at 31. Regarding the
implied duty to market, the Defendants note that the Court
held that, '"[e]ven if a reasonably prudent operator
would not have marketed the products using the keep-whole
scheme, the Plaintiffs suffer harm only if the keep-whole
scheme deprived them of their royalty interest.'"
Response to Motion 1 at 31 (quoting Abraham, 317
F.R.D. at 265). "The duty to market, " the Court
noted, '"does not define the lessor's royalty
interest; the lease's royalty provision does
that.'" Response to Motion 1 at 31 (quoting
Abraham, 317 F.R.D. at 265). "Thus, determining
whether WPX breached the duty to market turns on an
individualized inquiry into whether a particular class
member's royalty instrument provides for royalty on
refined NGLs." Response to Motion 1 at 31. On these
facts, the Defendants conclude that "the question
whether WPX breached the duty to market is, as the Court
held, not a common one." Response to Motion 1 at 32
(citing Abraham, 317 F.R.D. at 265-66).
the Defendants assert that the Court cannot certify the claim
for breach of the duty of good faith and fair dealing.
See Response to Motion 1 at 32. The Defendants argue
that the Plantiffs "bald[ly] conclude[e] that WPX
breached the duty by denying payment on the value of refined
NGLs . . . but they do not explain why this claim is a common
one." Response to Motion 1 at 32. The Defendants
conclude that the Court should deny the Motion. Response to
Motion 1 at 33.
The Response to the Plaintiffs' Second Motion for
Defendants respond to the Plaintiffs' Second Motion for
Class Certification. See Defendants' Response in
Opposition to Plaintiffs' Second Motion for Class
Certification, filed November 2, 2016 (Doc.
259)("Response to Motion 2"). They make several
procedural arguments. First, the Defendants assert that
"the Court must continue to determine class
certification based on the Definition contained in the
operative complaint." Response to Motion 2 at 3.
Specifically, the Defendants contend that the
"Plaintiffs are bound by the class definition in the
complaint and 'absent an amended complaint [the Court]
will not consider certification beyond it.'"
Response to Motion 2 at 3 (quoting Costelo v.
Chertoff, 258 F.R.D. 600, 604-05 & n.6 (CD. Cal.
2009)(Selna, J.)). The Defendants contend that "courts
will not permit plaintiffs to change or expand their class
definition through a motion to certify." Response to
Motion 2 at 3 (citing Phelps v. Parsons Tech. Support.
Inc., 2010 WL 4386918, at *3 (S.D. Ind.
2010)(Magnus-Stinson, J.)). The Defendants conclude that,
because the Plaintiffs have not moved to amend their
Complaint, the Court should not entertain the Plaintiffs'
Motions. See Response to Motion 2 at 3.
The Defendants argue that the Plaintiffs cannot obtain leave
to amend their Complaint, because "the deadline to Amend
has passed, and Plaintiffs cannot show good cause under Rule
16(b)(4)." Response to Motion 2 at 3. The Defendants
argue that a key requirement of the good-cause standard is
"diligence" and that the Plaintiffs have not been
diligent by tendering "this new [class] definition
nearly three years after they first learned of their
ascertainability problem and more than two years after the
parties completed extensive discovery and a multi-day hearing
premised on the [original class] definition." Response
to Motion 2 at 7.
the Defendants contend that, to amend a complaint, "a
party seeking to amend must satisfy Rule 15(a), under which a
court may deny an amendment for, among other things, the
moving party's undue delay or the non-movant's undue
prejudice." Response to Motion 2 at 7 (citing Foman
v. Davis, 371 U.S. 178, 182 (1962)(emphasis in
original)). The Defendants contend that both undue delay and
undue prejudice are grounds for denying a motion to amend a
complaint here. See Response to Motion 2 at 7. The
Defendants assert that the Plaintiffs "offer no adequate
explanation for their delay." Response to Motion 2 at 8.
Regarding undue prejudice, they assert that the
"Defendants have been litigating class certification
under the [original] class definition for over four
years" and have relied on that definition, thus
prejudicing the Defendants. Response to Motion 2 at 8.
Defendants next briefly reassert their waiver argument,
before contending that "the proposed new class
definition does not constitute a material change in
circumstances justifying Plaintiffs' request to alter or
amend the class certification ruling." Response to
Motion 2 at 9. Specifically, the Defendants contend that Rule
23(c)(1)(C) "is designed so that 'a determination
once made can be altered or amended before the decision on
the merits, if upon fuller development of the facts, the
original determination appears unsound.'" Response
to Motion 2 at 9 (quoting Fed.R.Civ.P. 23 advisory committee
notes to 1966 amendment). According to the Defendants, a new
class definition, offered to replace one the court found
wanting, does not meet this standard. See Response
to Motion 2 at 10.
the Defendants assert that the Plaintiffs' new class
definition "does not solve the ascertainability
problem." Response to Motion 2 at 11. The Defendants
argue that the new class definition is not ascertainable,
it is still tied to a demand for payment on processed NGLs.
Although they have eliminated the reference to the three
processing plants, Plaintiffs have provided no new evidence
concerning processing. Because most gas is not processed, and
because Plaintiffs failed to prove whether or not other gas
was processed, the problem of ascertaining whose gas was
processed, and thus, who belongs in the class, remains.
Response to Motion 2 at 12.
the Defendants argue that the new class definition "does
not supply commonality." Response to Motion 2 at 13.
They argue that "the breach of lease claims and the
implied duty claims do not present a common question, "
and that "the civil conspiracy claim is derivative of
the breach-of-contract claims, and it therefore does not
supply a common issue." Response to Motion 2 at 13, 19.
the Defendants assert that "the proposed new definition
does not eliminate the predominance of individual issues over
any common ones." Response to Motion 2 at 20.
Specifically, they posit that, despite the new class
definition, "lease language variations will continue to
overwhelm any alleged common issue, " and that
"industry custom and usage evidence and other parol
evidence will require individualized inquiries."
Response to Motion 2 at 20-21.
Defendants additionally argue that "damages evidence
remains highly individualized." Response to Motion 2 at
20. Specifically, "because Plaintiffs have not shown
they are entitled to extracted NGLs or actual amounts
received by WPX under all royalty and overriding royalty
instruments at issue, determining liability and damages
requires an individualized inquiry that will differ by lease,
well, and month." Response to Motion 2 at 22.
the Defendants assert that "former royalty owners add
individualized issues concerning ownership of claims, which
further defeats predominance." Response to Motion 2 at
23. The Defendants contend that the new class definition
contains former royalty owners, and that "current
royalty owners do not necessarily have the right to assert
claims and recover damages for royalties that were not paid
to their predecessors-in-interest." Response to Motion 2
at 23. "Accordingly, determining whether a right of
action was transferred, and thus, who owns a claim for past
underpayments - the current or former owner - will entail
examinations of the chain of title for each class member, and
possibly extrinsic evidence." Response to Motion 2 at
24. The Defendants thus conclude that the Court should deny
the Motion. See Response to Motion 2 at 24.
The Reply to the First Response.
Plaintiffs reply to the Defendants' arguments.
See Plaintiffs' Reply to Defendants'
Response to Plaintiffs' Motion to Alter or Amend and to
Reconsider Memorandum Opinion and Order, filed November 28,
2016 (Doc. 263)("Reply 1"). First, the Plaintiffs
re-assert that their new class definition meets the
commonality and predominance requirements. See Reply
1 at 1. They re-assert that the leases at issue can be
divided into two categories of "proceeds" leases
and "market value" leases, and that, at the very
least, proceeds leases forbid paying NGL royalty on a
keep-whole basis. Reply 1 at 2-3 (citing Abraham,
317 F.R.D. at 275 n.82).
the Plaintiffs argue that the class is ascertainable.
See Reply 1 at 4. Specifically, "defining the
class by those who are paid on the keep-whole method
identifies the persons entitled to relief and who are bound
by the judgment. It supplies a source of identification . . .
based on WPX's records of past and current monthly
remittances for royalty and overriding royalty." Reply 1
the Plaintiffs argue that, although the Court concluded
'"the evidence suggests 'gas' refers to the
gas produced at the wellhead rather than the processed
products, '" there is no dispute "that the
proceeds and market value leases entitle payment on
'gas.'" Reply 1 at 7 (quoting Abraham,
317 F.R.D. at 263). "There are no sales at the wells.
The proxy for sales of gas at the well are proceeds achieved
by sales of the gas components at the place and in the
subdivide forms of the production found at the outlet of
processing plants." Reply 1 at 7-8.
Plaintiffs also argue that "[construction of leases is
to favor lessors, " specifically that "between
lessor and lessee construction of the lease shall be against
the lessee and in favor of the lessor." Reply 1 at 10
(citing Greer v. Salmon, 1971-NMSC-002, 479 P.2d
294). This rule exists, because "the lessors ... are not
familiar with oil-and-gas industry usage and the leases are
form contracts not ordinarily the product of meaningful
negotiation." Reply 1 at 11.
Plaintiffs conclude by asking the Court to amend its decision
denying class certification. See Reply 1 at 12.
The Reply to the Second Response.
Plaintiffs reply to the Second Response. See Reply
in Support of Plaintiffs' Second Motion for Class
Certification, filed November 28, 2016 (Doc. 264)("Reply
2"). First, the Plaintiffs argue that their Second
Motion is timely. See Reply 2 at 1. They contend
that, "[u]ntil the Court filed [Abraham] on
August 16, 2016, the Plaintiffs reasonably believed that this
case would be certified. There was no reason for Plaintiffs
to file additional motions addressed to the certification
issue until the Court announced its decision." Reply 2
at 2. The Plaintiffs further argue that "the Court has
ample authority to consider the Second Motion." Reply 2
at 3. Specifically, they contend that "Rule 23 does not
limit the class definition to a definition set forth in the
complaint. To the contrary, Rule 23 puts the responsibility
for defining a class on the Court. The class definition is
ultimately determined by the Court, not the parties."
Reply 2 at 5 (citing Blair v. Transam Trucking.
Inc., 2015 WL 5006076, at *3 (D. Kan. 2015)(Melgren,
J.)). Further, the Plaintiffs contend that "[t]he Tenth
Circuit has never ruled that a district court is limited to
the class definition in the complaint." Reply 2 at 5.
The Plaintiffs argue: "The most that can be said in
support of WPX's position is that district courts are
split on the issue." Reply 2 at 6. The Plaintiffs add
that, "[e]ven if the Court were inclined to narrowly
view its authority to consider a class definition in a motion
for class certification different from that in the operative
complaint, the remedy should be to allow plaintiffs to amend
their complaint." Reply 2 at 7.
the Plaintiffs assert that their new class definition cures
the ascertainability problem. See Reply 2 at 7. They
reassert that royalty owners paid on the keep-whole
methodology are "readily ascertainable based on
WPX's own records." Reply 2 at 7. The Plaintiffs
further contend that the new class definition establishes
commonality and predominance. See Reply 2 at 8. The
Plaintiffs reassert their arguments that the new class
definition includes only owners paid under proceeds and
market value leases, and that these owners are similarly
situated "for purposes of the case, subject only to
minor variations in the damage formula that would apply to
each." Reply 2 at 9.
the Plaintiffs re-argue that their implied covenant claims
are also certifiable. See Reply 2 at 12. Plaintiffs
contend that WPX Energy has breached the implied covenant to
market and the breach of the duty of good faith and fair
dealing, because "WPX does not fully market the
production for the class members, so [it] cannot establish
that it has marketed to get the best possible price."
Reply 2 at 12.
Plaintiffs conclude by requesting that the Court grant their
Second Motion and certify the new class definition.
See Reply 2 at 12.
Court held a motion hearing on January 24, 2017. See
Transcript of Motion Proceeding at 1:1 (taken January 24,
2017)(Court)("Tr."). The Plaintiffs began by
stating "there is no doubt that the class is financially
injured by nonpayment of the royalty and overriding royalty
on natural gas liquids produced from the leases to which are
burdened by those royalty interests, and that injury can only
be remedied by a certified class action." Tr. at 3:18-24
(Gallegos). Regarding the Defendants' procedural
challenges, the Plaintiffs argued that "[t]his is not an
issue about amending a complaint. We're not changing or
amending any causes of action or claims or defense. A motion
is the proper means to seek an order of the Court. The motion
is the proper way to come forward for class
certification." Tr. at 7:3-8 (Gallegos).
to the ascertainability issue, the Plaintiffs argued that the
new class is ascertainable, because "[t]hose royalty
owners and overriding royalty owners who are paid on a
keep-whole basis are parties that can be easily determined
from the database of WPX." Tr. at 10:16-18 (Gallegos).
The Plaintiffs then pivoted to commonality, arguing that,
under the new class definition, "the issue in this case
simply becomes, with everybody paid on the same basis, on the
keep-whole basis, are the parties injured by that, or are
they not injured by that." Tr. at 12:9-13 (Gallegos).
The Plaintiffs continued arguing on commonality, asserting
that all but a few leases fit into one of two categories -
proceeds leases and market value leases. See Tr. at
23:7-12 (Gallegos). The Plaintiffs concluded by saying that
we believe that what has been brought before the Court
regarding application of the proceeds and market value
leases, along with the definition of the proposed description
of the class, the three elements, the three issues that
[argued] against certification, set forth on page 2 of your
opinion, have been satisfied; that there is no longer a
Tr. at 29:3-11 (Gallegos). The Defendants began their
argument on the ascertainability issue. See Tr. at
31:6-8 (Sheridan). Specifically, they asserted that in the
Plaintiffs' Reply, they "challenged for the first
time findings and conclusions that the Court made with
respect to the - which gas from which leases was or was not
processed. And he does so in a way that is in direct conflict
with the record in the case." Tr. at 32:5-10 (Sheridan).
"[T]he reason that this becomes significant is that if
the gas was not processed, if it was sold without processing,
then there would be no proceeds from the sale of refined
NGLs, no proceeds derived by either WFC or WPX." Tr. at
32:23-25, 33:1-2 (Sheridan). "So on the ascertainability
question, the Court has to ask itself: Have the plaintiffs
proven which gas from which wells on which leases was
processed or not? Because if it wasn't processed, then
there is no royalty obligation under their new
definition." Tr. at 36:9-14 (Sheridan). "[T]he
Court's findings and conclusions stand for the
proposition that a very substantial quantity of the WPX
operated conventional production is not processed. And their
definition doesn't cure that." Tr. at 39:8-12
Defendants then turned to their procedural arguments.
See Tr. at 40:12-13 (Sheridan). They argued that
"a new class certification motion can effectively be
nothing more than a motion for reconsideration of the denial
of the prior class certification motion, " meaning that
a court should apply the standards applicable to a motion for
reconsideration when considering a second motion for class
certification. Tr. at 41:19-24. The Defendants argued that
the Plaintiffs' Motions "do nothing more than raise
issues that have already been raised, and then advance
arguments that they could have raised, but tactically and
strategically elected not to." Tr. at 41:7-11
And if the Court's standards for reconsideration mean
anything, then they mean that this motion must be denied, and
they mean that this second motion for class certification is
nothing more than a rehash of the same issues that have been
in the case since they filed their motion for class
certification in 2014.
Tr. at 53:11-17 (Sheridan). Turning to the proceeds issue,
the Defendants argued that
[t]he Court did not, in footnote 82,  nor anywhere else in the opinion
that I can find, render a holding, whether for purposes of
class certification, or otherwise, that a royalty on a
keep-whole . . . contract, where the royalty owner does not
own an interest in the refined NGLs, nonetheless is required
to be paid royalty as he did.
Tr. at 55:23-25, 1-5 (Sheridan) (citing Abraham, 317
F.R.D. at 275 n.82). Regarding commonality, the Defendants
posited: "I think that, without first considering the
circumstances surrounding the execution of those leases, when
they were entered into, what was going on in the industry . .
. they may not necessarily mean the same thing. That becomes
an individualized inquiry." Tr. at 64:4-10 (Sheridan).
Our argument with respect to custom and usage evidence
supporting the Court's commonality and predominance
ruling is uncontested. They rely on a canon of construction
that an agreement is to be construed against the drafter. And
they ignore, however, that that canon of construction applies
only after the Court has fully considered the extrinsic
Tr. at 66:12-19 (Sheridan). The Defendants concluded by
saying: "I think this Court correctly found that the
Plaintiffs could not establish the requirements of
commonality and predominance. And nothing that they've
said in their motion for reconsideration or second motion for
class certification changes the Court's findings and
conclusions in that respect." Tr. at 70:5-10 (Sheridan).
Court then asked the Defendants about the new class
definition. See Tr. at 71:1-2 (Court). The
Defendants asserted that there were several problems with the
new class definition, including the inclusion of former
owners and overriding royalty owners. See Tr. at
Court then inquired as to the Defendants' procedural
arguments, asking how the Defendants would be prejudiced if
the court ruled on the new class definition. See Tr.
at 74:1-10 (Court). The Defendants responded by saying:
The Plaintiffs in this case filed an initial motion for class
certification . . . sometime in 2013. It was withdrawn. They
refiled a motion for class certification in January of 2014 .
. . [T]hey prepared and prosecuted their motion for class
certification at great time and expense to the defendants . .
. [T]he burden of discovery in these cases, as the Court
knows, falls largely on the defendants.
Tr. at 77:13-23 (Sheridan). The Court also asked the
Plaintiffs about prejudicing the Defendants by ruling on the
new class definition. See Tr. at 89:13-16 (Court).
The Plaintiffs responded that "we basically had a mini
trial [-] five, six days of evidence . . ., I think every
issue was thoroughly tried at that hearing." Tr.
REGARDING MOTIONS TO RECONSIDER
where the Federal Rules of Civil Procedure specify, motions
to reconsider fall into three categories:
(i) a motion to reconsider filed within [twenty-eight] days
of the entry of judgment is treated as a motion to alter or
amend the judgment under rule 59(e); (ii) a motion to
reconsider filed more than [twenty-eight] days after judgment
is considered a motion for relief from judgment under rule
60(b); and (iii) a motion to reconsider any order that is not
final is a general motion directed at the Court's
inherent power to reopen any interlocutory matter in its
discretion. See Price v. Phjipot, 420 F.3d 1158,
1167 & n.9 (10th Cir. 2005).
Pedroza v. Lomas Auto Mall, Inc., 258 F.R.D. 453,
462 (D.N.M. 2009)(Browning, J.). See Price v.
Philpot, 420 F.3d at 1167; Computerized Thermal
Imaging, Inc. v. Bloomberg. L.P., 312 F.3d 1292, 1296
(10th Cir. 2002).
Motions for Reconsideration Under Rules 59(e) and
may treat motions for reconsideration as a rule 59(e) motion
when the movant files within twenty-eight days of a
court's entry of judgment. See Price v. Philpot,
420 F.3d at 1167 n.9. If the movant files outside that time
period, courts should treat the motion as seeking relief from
judgment under rule 60(b). See Price v. Philpot, 420
F.3d at 1167 n.9. "[A] motion for reconsideration of the
district court's judgment, filed within [rule 59's
filing deadline], postpones the notice of appeal's effect
until the motion is resolved." Jones v. United
States, 355 Fed.Appx. 117, 121 (10th Cir.
2009)(unpublished). The time limit in rule 59(e) is now
twenty-eight days from the entry of a judgment. See
a motion for reconsideration should be considered a motion
under rule 59 or rule 60 is not only a question of timing,
but also "depends on the reasons expressed by the
movant." Commonwealth Prop. Advocates, LLC v. Mortg.
Elec. Registration Sys., Inc., 680 F.3d 1194, 1200 (10th
Cir. 2011). Where the motion "involves
'reconsideration of matters properly encompassed in a
decision on the merits, '" a court considers the
motion under rule 59(e). Phelps v. Hamilton, 122
F.3d 1309, 1323-24 (10th Cir. 1997)(quoting Martinez v.
Sullivan, 874 F.2d 751, 753 (10th Cir. 1989)). In other
words, if the reconsideration motion seeks to alter the
district court's substantive ruling, then it should be
considered a rule 59 motion and be subject to rule 59's
constraints. See Phelps v. Hamilton, 122 F.3d at
1324. In contrast, under rule 60,
[o]n motion and just terms, the court may relieve a party or
its legal representatives from a final judgment, order, or
proceeding for the following reasons:
(1) mistake, inadvertence, surprise, or excusable neglect;
(2) newly discovered evidence that, with reasonable
diligence, could not have been discovered in time to move for
a new trial under Rule 59(b);
(3) fraud (whether previously called intrinsic or extrinsic),
misrepresentation, or misconduct by an opposing party;
(4) the judgment is void;
(5) the judgment has been satisfied, released or discharged;
it is based on an earlier judgment that has been reversed or
vacated; or applying it prospectively is no longer equitable;
(6) any other reason that justifies relief.
Fed. R. Civ. P. 60(b). Neither a rule 59 nor a rule 60 motion
are appropriate vehicles to reargue an issue previously
addressed by the court when the motion merely advances new
arguments, or supporting facts which were available at the
time of the original motion. . . . Grounds warranting a
motion to reconsider include (1) an intervening change in the
controlling law, (2) new evidence previously unavailable, and
(3) the need to correct clear error or prevent manifest
Servants of the Paraclete v. Does, 204 F.3d 1005,
1012 (10th Cir. 2000). "[A] motion for reconsideration
is appropriate where the court has misapprehended the facts,
a party's position, or the controlling law."
Servants of the Paraclete v. Does, 204 F.3d at 1012.
A district court has considerable discretion in ruling on a
motion to reconsider. See Phelps v. Hamilton, 122
F.3d at 1324.
authorizes a district court to, "[o]n motion and just
terms[, ] . . . relieve a party or its legal representative
from a final judgment, order, or proceeding for the following
reasons, " including "any other reason that
justifies relief." Fed.R.Civ.P. 60(b). A court cannot
enlarge the time for filing a rule 59(e) motion. See
Brock v. Citizens Bank of Clovis, 841 F.2d 344, 347
(10th Cir. 1988)(holding that district courts lack
jurisdiction over untimely rule 59(e) motions); Plant Oil
Powered Diesel Fuel Sys., Inc. v. ExxonMobil Corp., No.
11-0103, 2012 WL 869000, at *2 (D.N.M. Mar. 8,
2012)(Browning, J.)("The Court may not extend the time
period for timely filing motions under Rule 59(e) . . .
."). "A motion under rule 59 that is filed more
than 28 days after entry of judgment may be treated as a Rule
60(b) motion for relief from judgment." 12 James Wm.
Moore et al., Moore's Federal Practice § 59.11
[b], at 59-32 (3d ed. 2012)(citations omitted).
Nevertheless, a court will not generally treat an untimely
rule 59(e) motion as a rule 60(b) motion when the party is
seeking '"reconsideration of matters properly
encompassed in a decision on the merits' contemplated by
Rule 59(e)." Jennings v. Rivers, 394 F.3d 850,
854 (10th Cir. 2005).
some circumstances, parties can rely on rule 60(b)(1) for a
mistake by their attorney or when their attorney acted
without their authority. See Yapp v. Excel Corp.,
186 F.3d 1222, 1231 (10th Cir. 1999)("Rule 60(b)(1)
motions premised upon mistake are intended to provide relief
to a party . . . when the party has made an excusable
litigation mistake or an attorney has acted without authority
. . . ."). Mistake in this context entails either acting
without the client's consent or making a litigation
mistake, such as failing to file or to comply with deadlines.
See Yapp v. Excel Corp., 186 F.3d at 1231. If the
alleged incident entails a mistake, then it must be
excusable, meaning that the party was not at fault. See
Pioneer Inv. Servs. v. Brunswick Assocs. LP, 507 U.S.
380, 394 (1993); Cashner v. Freedom Stores, Inc., 98
F.3d 572, 577 (10th Cir. 1996)("If the mistake alleged
is a party's litigation mistake, we have declined to
grant relief under Rule 60(b)(1) when the mistake was the
result of a deliberate and counseled decision by the
party."); Pelican Prod. Corp. v. Marino, 893
F.2d 1143, 1146 (10th Cir. 1990)(holding that attorney
carelessness is not a basis for relief under rule 60(b)(1)).
will not grant relief when the mistake of which the movant
complains is the result of an attorney's deliberate
litigation tactics. See Cashner v. Freedom Stores,
Inc., 98 F.3d at 577.
rule exists because a party
voluntarily chose [the] attorney as his representative in the
action, and he cannot now avoid the consequences of the acts
or omissions of this freely selected agent. Any other notion
would be wholly inconsistent with our system of
representative litigation, in which each party is deemed
bound by the acts of his lawyer agent and is considered to
have notice of all facts, notice of which can be charged upon
Pioneer Inv. Servs. v. Brunswick Assocs. LP, 507
U.S. at 397 (quoting Link v. Wabash R.R. Co., 370
U.S. 626, 633-34 (1962))(internal quotation marks omitted).
The Tenth Circuit has held that there is nothing
"novel" about "the harshness of penalizing [a
client] for his attorney's conduct, " and has noted
that those "who act through agents are customarily
bound, " even though, when "an attorney is poorly
prepared to cross-examine an expert witness, the client
suffers the consequences." Gripe v. City of Enid.
Okla., 312 F.3d 1184, 1189 (10th Cir. 2002).
60(b)(6) is a "grand reservoir of equitable power to do
justice in a particular case." Van Skiver v. United
States, 952 F.2d 1241, 1244 (10th Cir. 1991)(internal
quotation marks omitted). "If the reasons offered for
relief from judgment could be considered under one of the
more specific clauses of Rule 60(b)(1)-(5), those reasons
will not justify relief under Rule 60(b)(6)." Moore,
supra § 60.48, at 60-182. Accord
Liljeberg v. Health Servs. Acquisition Corp., 486 U.S.
847, 863 n.ll (1988)("This logic, of course, extends
beyond clause (1) and suggests that clause (6) and clauses
(1) through (5) are mutually exclusive."). "The
Rule does not particularize the factors that justify relief,
but we have previously noted that it provides courts with
authority 'adequate to enable them to vacate judgments
whenever such action is appropriate to accomplish justice,
' while also cautioning that it should only be applied in
'extraordinary circumstances.'" Liljeberg v.
Health Servs. Acquisition Corp., 486 U.S. at 863.
the situation must be one beyond the control of the party
requesting relief under rule 60(b)(6) to warrant relief.
See Ackermann v. United States, 340 U.S. 193, 202
(1950)("The comparison [of prior precedent] strikingly
points up the difference between no choice and choice;
imprisonment and freedom of action; no trial and trial; no
counsel and counsel; no chance for negligence and inexcusable
negligence. Subsection 6 of Rule 60(b) has no application to
the situation of petitioner."). Legal error that
provides a basis for relief under rule 60(b)(6) must be
extraordinary, as the Tenth Circuit discussed in Van
Skiver v. United States:
The kind of legal error that provides the extraordinary
circumstances justifying relief under Rule 60(b)(6) is
illustrated by Pierce [v. Cook & Co., 518 F.2d
720, 722 (10th Cir. 1975)(en banc)]. In that case, this court
granted relief under 60(b)(6) when there had been a
post-judgment change in the law "arising out of the same
accident as that in which the plaintiffs . . . were
injured." Pierce v. Cook & Co., 518 F.2d at
723. However, when the post-judgment change in the law did
not arise in a related case, we have held that "[a]
change in the law or in the judicial view of an established
rule of law" does not justify relief under Rule
60(b)(6). Collins v. City of Wichita, 254 F.2d 837,
839 (10th Cir. 1958).
Van Skiver v. United States, 952 F.2d at 1244-45.
Motions to Reconsider Interlocutory Orders.
confusion exists among the bar regarding the proper standard
for a district court to apply when ruling on a motion to
reconsider one of its prior "interlocutory" or
"interim" orders, Le., an order that a district
court issues while the case is ongoing, as distinguished from
a final judgment. This confusion originates from the fact
that the Federal Rules of Civil Procedure do not mention
motions to reconsider, let alone set forth a specific
procedure for filing them or a standard for analyzing them. A
loose conflation in terminology in Servants of the
Paraclete v. Does, which refers to rule 59(e) motions -
"motion[s] to alter or amend a judgment" -
as "motions to reconsider, " compounded that baseline
confusion. Fed.R.Civ.P. 59(e) (emphasis added); Servants
of the Paraclete v. Does, 204 F.3d at 1005.
judgments are different from interlocutory orders.
See Fed.R.Civ.P. 54(a) ("'Judgment' as
used in these rules includes a decree and any order from
which an appeal Kes.")(emphasis added). In addition
to ripening the case for appeal, see 28 U.S.C. § 1291
("The courts of appeals . . . shall have jurisdiction of
appeals from all final decisions of the district courts . . .
."), the entry of final judgment narrows the district
court's formerly plenary jurisdiction over the case in
three ways. First, for the first twenty-eight days after the
entry of judgment, when the court can entertain motions under
rules 50(b), 52(b), 59, and 60, the district court's
jurisdiction trumps that of the Court of Appeals.
See Fed. R. App. P. 4(a)(4)(B). Even if a party
files a notice of appeal, the Court of Appeals will wait
until after the district court has ruled on the post-judgment
motion to touch the case. See Fed. R. App. P.
4(a)(4)(B). Second, after twenty-eight days, when the court
may consider motions under rule 60, if a party has filed a
notice of appeal, the Court of Appeals' jurisdiction
trumps the district court's, and the district court needs
the Court of Appeals' permission even to grant a rule 60
motion. Third, after twenty-eight days, if no party has filed
a notice of appeal, district courts may consider motions
under rule 60.
judgments implicate two important concerns militating against
giving district courts free reign to reconsider their
judgments. First, when a case is not appealed, there is an
interest in finality. The parties and the lawyers expect to
go home, quit obsessing about the dispute, and put the case
behind them, and the final judgment - especially once the
twenty-eight day window of robust district court review and
the thirty-day window of appeal have both closed - is the
disposition upon which they are entitled to rely. Second,
when a case is appealed, there is the need for a clean
jurisdictional handoff from the district court to the Court
of Appeals. "[A] federal district court and a federal
court of appeals should not attempt to assert jurisdiction
over a case simultaneously, " as doing so produces a
"danger [that] a district court and a court of appeals
w[ill] be simultaneously analyzing the same judgment."
Griggs v. Provident Consumer Discount Ca, 459 U.S.
Court of Appeals needs a fixed record on which to base its
decisions - especially given the collaborative nature of
appellate decision making - and working with a fixed record
requires getting some elbow room from the district
court's continued interference with the case. The
"touchstone document" for this jurisdictional
handoff is the notice of appeal, and not the final judgment,
see Griggs v. Provident Consumer Discount Co., 459
U.S. at 58 ("The filing of a notice of appeal is an
event of jurisdictional significance - it confers
jurisdiction on the court of appeals and divests the district
court of its control over those aspects of the case involved
in the appeal." (citations omitted)); Garcia v.
Burlington N. R.R. Co.. 818 F.2d 713, 721 (10th Cir.
1987)("Filing a timely notice of appeal pursuant to Fed.
R. App. P. 3 transfers the matter from the district court to
the court of appeals. The district court is thus divested of
jurisdiction. Any subsequent action by it is null and
void." (citations omitted)); Kirtland v. J. Ray
McDermott & Co.. 568 F.2d 1166, 1170 (5th Cir.
1978)("[I]t is the filing of the appeal, not the
entering of a final judgment, that divests the district court
of jurisdiction." (citations omitted)), but, because the
final judgment starts the parties' thirty-day clock for
filing a timely notice of appeal, the Federal Rules and the
Tenth Circuit have chosen to curtail the district court's
jurisdiction over the case in the roughly month-long period
of potentially overlapping trial- and appellate-court
jurisdiction that immediately follows the entry of final
judgment, see Servants of the Paraclete v. Does, 204
F.3d at 1009 (noting that post-final judgment motions at the
district court level are "not intended to be a
substitute for direct appeal").
rather than suddenly divesting the district court of all
jurisdiction over the case - potentially resulting in the
district court being unable to rectify easily fixable
problems with the final judgment before the case goes to the
Tenth Circuit, or even requiring appeal of a case that might
otherwise not need to be appealed - the Federal Rules set
forth a jurisdiction phased de-escalation process, wherein
the district court goes from pre-final judgment plenary
jurisdiction, to limited review for the first twenty-eight
days post-final judgment, and, finally, to solely rule 60
review after twenty-eight days. In defining the "limited
review" that rule 59(e) allows a district court to
conduct in the 28-day flux period, the Tenth Circuit, in
Servants of the Paraclete v. Does, incorporated
traditional law-of-the-case grounds - the same grounds that
inform whether a court should depart from an appellate
court's prior decision in the same case - into rule
59(e). See United States v. Alvarez. 142 F.3d 1243,
1247 (10th Cir. 1998)(departing from the law-of-the-case
doctrine in three exceptionally narrow circumstances:
"(1)when the evidence in a subsequent trial is
substantially different; (2) when controlling authority has
subsequently made a contrary decision of the law applicable
to such issues; or (3) when the decision was clearly
erroneous and would work a manifest injustice")
(citation omitted); Servants of the Paraclete v.
Does, 204 F.3d at 1012 (incorporating those grounds into
of these concerns - finality nor jurisdictional overlap - is
implicated when a district court reconsiders one of its own
interlocutory orders. The Federal Rules do not specifically
mention motions to reconsider interlocutory orders, but rule
54(b) makes the following open-ended proclamation about their
When an action presents more than one claim for relief -
whether as a claim, counterclaim, crossclaim, or third-party
claim - or when multiple parties are involved, the court may
direct entry of a final judgment as to one or more, but fewer
than all, claims or parties only if the court expressly
determines that there is no just reason for delay. Otherwise,
any order or other decision, however designated,
that adjudicates fewer than all the claims or the
rights and liabilities of fewer than all the parties does not
end the action as to any of the claims or parties and may
be revised at any time before the entry of a judgment
adjudicating all the claims and all the parties' rights
Fed. R. Civ. P. 54(b) (emphases added). Rule 54(b) thus (i)
provides that a district court can freely reconsider its
prior rulings; and (ii) puts no limit or governing standard
on the district court's ability to do so, other than that
it must do so "before the entry of judgment."
Tenth Circuit has not cabined district courts' discretion
beyond what rule 54(b) provides: "[D]istrict courts
generally remain free to reconsider their earlier
interlocutory orders." Been v. O.K. Indus., 495
F.3d at 1225. In the Tenth Circuit, "law of the case
doctrine has no bearing on the revisiting of interlocutory
orders, even when a case has been reassigned from one judge
to another." Rimbert v. Eli Lilly & Co.,
647 F.3d 1247, 1252 (10th Cir. 2011)(emphasis added) (citing
Been v. O.K. Indus., Inc., 495 F.3d at 1225). In
this context, "the doctrine is merely a
'presumption, one whose strength varies with the
circumstances.'" Been v. O.K. Indus., Inc.,
495 F.3d at 1225 (quoting Avitia v. Metro. Club of Chi.,
Inc., 49 F.3d 1219, 1227 (7th Cir. 1995)). In short, a
district court can use whatever standard it wants to review a
motion to reconsider an interlocutory order. It can review
the earlier ruling de novo and essentially reanalyze the
earlier motion from scratch, it can review the ruling de novo
but limit its review, it can require parties to establish one
of the law-of-the-case grounds, or it can refuse to entertain
motions to reconsider altogether.
best approach, in the Court's eyes, is to analyze motions
to reconsider differently depending on three factors. Of.
Been v. O.K. Indus., Inc., 495 F.3d at 1225
("[T]he doctrine is merely a 'presumption, one whose
strength varies with the circumstances.'")(citation
omitted). First, the Court should restrict its review of a
motion to reconsider a prior ruling in proportion to how
thoroughly the earlier ruling addressed the specific findings
or conclusions that the motion to reconsider challenges. How
"thoroughly" a point was addressed depends both on
the amount of time and energy the Court spent on it, and on
the amount of time and energy the parties spent on it - in
briefing and orally arguing the issue, but especially if they
developed evidence on the issue. A movant for reconsideration
thus faces a steeper uphill challenge when the prior ruling
was on a criminal suppression motion, class certification
motion, or preliminary injunction,  than when the prior ruling is,
e.g., a short discovery ruling. The Court should
also look, not to the prior ruling's overall
thoroughness, but to the thoroughness with which the Court
addressed the exact point or points that the motion to
reconsider challenges. A movant for reconsideration thus
faces an easier task when he or she files a targeted,
narrow-in-scope motion asking the Court to reconsider a
small, discrete portion of its prior ruling than when he or
she files a broad motion to reconsider that rehashes the same
arguments from the first motion, and essentially asks the
Court to grant the movant a mulligan on its earlier failure
to present persuasive argument and evidence.
the Court should consider the case's overall progress and
posture, the motion for reconsideration's timeliness
relative to the ruling it challenges, and any direct evidence
the parties may produce, and use those factors to assess the
degree of reasonable reliance the opposing party has placed
in the Court's prior ruling. See 18B CHARLES
ALAN WRIGHT, Arthur R. Miller, Edward H. Cooper, Vikram David
Amar, Richard D. Freer, Helen Hershkoff, Joan E. Steinman
& Catherine T. Struve, Federal Practice & Procedure
§ 4478.1, at 695-96 (2d ed. 2002)("Stability
becomes increasingly important as the proceeding nears final
disposition .... Reopening should be permitted, however, only
on terms that protect against reliance on the earlier
ruling."). For example, if a defendant (i) spends tens
of thousands of dollars removing legacy computer hardware
from long-term storage; then (ii) obtains a protective order
in which the Court decides that the defendant need not
produce the hardware in discovery; then (iii) returns the
hardware to long-term storage, sustaining thousands more in
expenses; and (iv) several months pass, then the plaintiffs
should face a higher burden in moving the Court to reconsider
its prior ruling that they faced in fighting the motion for
protective order the first time.
the Court should consider the Servants of the Paraclete
v. Does grounds. The Court should be more inclined to
grant motions for reconsideration if the movant presents (i)
new controlling authority - especially if the new authority
overrules prior law or sets forth an entirely new analytical
framework; (ii) new evidence - especially if the movant has a
good reason why the evidence was not presented the first time
around; or (iii) a clear indication - one that manifests
itself without the need for in-depth analysis or review of
the facts - that the Court erred.
three factors should influence the degree to which the Court
restricts its review of a prior ruling, but they do not
necessarily mean that the Court should always apply a
deferential standard of review. The Court should pause before
applying a standard of review to its own interlocutory orders
that is more deferential than the standard that the Court of
Appeals will apply to it, unless the Court concludes that the
alleged error in the prior ruling was harmless, or the party
moving for reconsideration waived their right to appeal the
alleged error by not raising the appropriate argument. Even
in circumstances where the Court concludes that it is
insulated from reversal on appeal, there are principled
reasons for applying a de novo standard. After all, if the
Court was wrong in its earlier decision, then, generally
speaking, it is unjust to maintain that result - although the
Court should weigh this injustice against any injustice that
would result from upending the parties' reliance on the
earlier ruling, which is the balancing test that the three
factors above represent.
the Court means by "restricting its review" is less
about applying a deferential standard of review - although
that may be appropriate in some circumstances - and more
about reducing (i) the depth of the Court's analysis the
second time around - thus conserving judicial resources; and
(ii) the impositions that relitigation of the prior ruling
will impose on the party opposing the motion for
reconsideration. The Court should consider the time and
expense that the party opposing reconsideration spent in
winning the earlier ruling, and should try to prevent that
party from having to bear the same impositions again.
Basically, even if the Court ultimately analyzes a motion to
reconsider under the same standard that it analyzed the
motion that produces the earlier ruling, it should analyze
the motion in a different way - one focused on reducing the
litigation burdens of the party opposing reconsideration. For
example, when a party moves the Court for a preliminary
injunction, standard practice is that the Court holds an
evidentiary hearing as a matter of course, regardless whether
it looks as if the party has a good chance of prevailing. If
the party loses and the Court denies the injunction, however,
and the party moves for reconsideration, the party should not
be entitled to the presumption of an evidentiary hearing
merely because he or she received that presumption the first
time that the Court considered the motion.
light of these statements, it is perhaps better to
characterize the increased burden that a movant for
reconsideration faces as one of production and not of
persuasion. The Court analyzes motions to reconsider by
picking up where it left off in the prior ruling - not by
starting anew. Parties opposing reconsideration can do the
same, and they may stand on whatever evidence and argument
they used to win the earlier ruling. Movants for
reconsideration, on the other hand, carry the full burden of
production: they must persuade the Court, using only the
evidence and argument they put before it, that it should
change its prior ruling; they must do all of the legwork, and
not rely on the Court to do any supplemental fact-finding or
legal research; and they must convincingly refute both the
counterarguments and evidence that the opposing party used to
win the prior ruling and any new arguments and evidence that
the opposing party produces while opposing the motion to
reconsider. Unlike the motion that produced the prior ruling,
a motion to reconsider is not - and is not supposed to be - a
fair fight procedurally. The deck is stacked against a movant
for reconsideration, and if such a movant hopes to prevail,
he or she must have not only a winning legal position, but
the work ethic and tenacity to single-handedly lead the Court
to his or her way of thinking.
REGARDING A CLASS DEFINITION NOT IN THE OPERATIVE
[d]istrict courts are split over whether to hold a plaintiff
to the definition of a class as set forth in the complaint.
Compare Costelo v. Chertoff, 258 F.R.D. 600, 604
(CD. Cal. 2009)("The Court is bound to class definitions
provided in the complaint and, absent an amended complaint,
will not consider certification beyond."); Berlowitz
v. Nob Hill Masonic Mgmt., No. C-96-01241 MHP, 1996 WL
724776, at *2 (N.D. Cal. Dec.6, 1996)("The court is
bound by the class definition provided in the
complaint."), with Savanna Group, Inc. v. Trynex,
Inc., No. 10 C 7995, 2013 WL 66181, at *2-3 (N.D. Ill.
Jan. 4, 2013)(allowing amendment during certification
proceedings and noting "[t]hat this approach is also
consistent with Rule 23, which contemplated the amendment of
a class certification order prior to judgment");
Bridgeview Health Care Ctr. Ltd. v. Clark, 09 C
5601, 2011 WL 4628744, at *2 (N.D. Ill. Sept. 30,
2011)(allowing amendment during certification proceedings).
Grodzitsky v. Am. Honda Motor Co. Inc., No.
2:12-CV-01142-SVW, 2014 WL 718431, at *4 (CD. Cal. Feb. 19,
2014)(Wilson, J.). The Tenth Circuit does not have a
controlling opinion on this point, although Tenth Circuit
language exists that might suggest that a court need not hold
a plaintiff to the class definition in the operative
complaint. See Carpenter v. Boeing Co., 456 F.3d
1183, 1187 (10th Cir. 2006)("The district court can
modify or amend its class-certification determination at any
time before final judgment in response to changing
circumstances in the case.")(citing Fed.R.Civ.P.
23(c)(1)(C)); In re Integra Realty Res., Inc., 354
F.3d 1246, 1261 (10th Cir. 2004)("Moreover, a trial
court overseeing a class action retains the ability to
monitor the appropriateness of class certification throughout
the proceedings and to modify or decertify a class at any
time before final judgment.")(citing Fed.R.Civ.P.
litigation related to this case, this Court has noted:
Moreover, rule 23(c)(1)(C) authorizes courts to alter or
amend orders granting or denying class certification before
final judgment. See Fed.R.Civ.P. 23(c)(1)(C). The
Court has "ample discretion to consider (or decline to
consider) a revised class certification motion after initial
denial." In re Initial Public Offering Sec.
Litig., 483 F.3d 70, 73 (2d Cir. 2007). Even after
courts have denied a plaintiffs first attempt at class
certification, courts allow plaintiffs to propose a refined
class definition or different claims in an attempt to certify
a different class than the one originally proposed. See
Pettco Enterprises, Inc. v. White, 162 F.R.D. 151, 156
(M.D. Ala. 1995)(Albritton, J.) (allowing the plaintiffs to
attempt to certify a class, even after the court had already
denied certification once, and noting that the
plaintiffs' new class definition changed the class and
the claims). Courts of Appeals have made clear that nothing
"precludes the [plaintiffs] from returning to the
District Court to seek certification of a more modest class,
as one to which the Rule 23 criteria might be met."
In re Initial Public Offering Sec. Litig., 483 F.3d
70, 73 (2d Cir. 2006). The United States Court of Appeals for
the Fifth Circuit has "specifically invited" a
district court to reconsider a denial of class certification.
Calderon v. Presidio Valley Farmers Ass'n, 863
F.2d 384, 389 (5th Cir. 1989). The United States Court of
Appeals for the Second Circuit has similarly noted that a
plaintiff could seek to certify a narrower class after the
Second Circuit upheld the district court's denial of
class certification. See In re Initial Public Offering
Sec. Litig., 483 F.3d at 73. The Second Circuit stated
that the district court "can be expected to give such a
request full and fair consideration." In re Initial
Public Offering Sec. Litig., 483 F.3d at 73. On remand,
the Honorable Shira A. Scheindlin, United States District
Judge for the Southern District of New York, "held that
the revised class definition satisfied the Rule 23
certification requirements" for purposes of a class
settlement. In re Initial Public Offering Sec.
Litig., 2011 WL 2732563, at *3 (S.D.N.Y. July 8,
2011)(Scheindlin, J.). On the other hand, the plaintiffs need
to be careful not to turn a new class certification motion
into a motion to reconsider, thereby asking the Court to
apply the standards applicable to motions to reconsider.
Anderson Living Tr. v. WPX Energy Prod.,
LLC, No. CIV 12-0040, 2016 WL 5376325, at *9 (D.N.M.
Aug. 27, 2016)(Browning, J.)("Anderson"). In
summary, the Tenth Circuit has not explicitly ruled on this
issue, but other Courts of Appeals have at least implied that
a court need not hold a plaintiff to the class definition in
the operative complaint. For these reasons, the Court
concludes that a plaintiff is not bound to the class
definition in the operative complaint for purposes of a
second motion to certify a class. Class actions are hard work
for the Court and the parties; the Court and the parties need
to conform the pleadings to the reality of discovery, a
lengthy class certification hearing, and the judicial
resources expended in analyzing all of the extensive evidence
on record. Some flexibility - not more formality - is needed
in crafting a class action where one is warranted.
REGARDING WAIVER OF CLAIMS
Tenth Circuit has noted, in the context of waiver on appeal,
that, "if the theory was intentionally relinquished or
abandoned in the district court, we usually deem it waived
and refuse to consider it." Richision v. Ernest
Group, Inc., 634 F.3d 1123, 1127 (10th Cir.
2011)(Gorsuch, J.). "Waiver occurs when a party
deliberately considers an issue and makes an intentional
decision to forgo it." United States v.
Cruz-Rodriguez, 570 F.3d 1179, 1183 (10th Cir. 2009).
"We typically find waiver in cases where a party has
invited the error that it now seeks to challenge, or where a
party attempts to reassert an argument that it previously
raised and abandoned below." United States v.
Zubia-Torres, 550 F.3d 1202, 1205 (10th Cir. 2008).
United States v. Zubia-Torres, 550 F.3d at 1207, the
Tenth Circuit illustrated the waiver doctrine:
Similarly, in United States v. Gambino-Zavala, 539
F.3d 1221, 1227 (10th Cir.2008), the court found waiver, not
forfeiture, when defense counsel first raised an issue and
then affirmatively abandoned it. The defendant moved to
suppress certain evidence, which the government claimed had
been found in plain view. In a written pleading, the
defendant argued that no facts were in dispute, but during
the suppression hearing challenged the evidentiary basis for
the government's plain view argument. The prosecutor
responded that he thought the facts were undisputed but that
the government could prove its position by testimony. Defense
counsel neither contested the prosecutor's argument nor
insisted that the testimony be heard. Accordingly, this Court
found waived, the argument that the government had not proved
that the contraband was in plain view. Defense counsel
obviously knew of the issue. By his action, the defendant
"affirmatively abandoned his challenge to the
officers' testimony about the contraband and waived any
claim on appeal.
United States v. Zubia-Torres, 550 F.3d at 1207
(internal citation omitted).
REGARDING MODIFICATION ...