Catron v. Colt Energy, Inc., 2013 WL 6016231 (D. Kan. Nov. 13, 2013).
In an action alleging violation of Kansas law prohibiting restraint of trade, the District Court denied the plaintiff’s motion to remand (without prejudice) finding that he failed to establish that he and his class would qualify for a local controversy exception and denied his request for expedited discovery finding that the information he sought was not readily available.
The plaintiff filed this action in the District Court of Wilson County Kansas claiming that the defendants Colt Energy, Inc.; Layne Energy Resources, Inc.; Layne Energy Operating, LLC; and PostRock Midcontinent Production, LLC, successor by merger to Quest Cherokee, LLC, violated law prohibiting restraint of trade in leasing minerals in Southeast Kansas. Specifically, the plaintiff claimed that the defendants allocated markets instead of competing. The defendants removed the action under CAFA.
The plaintiff filed a motion to remand based on the local controversy exception arguing that it was more likely than not that more than two-thirds of the putative class members were Kansas citizens. However, in order to properly support his motion to remand, plaintiff asked the District Court for expedited jurisdictional discovery.
The plaintiff specifically requested the defendants to produce two categories of documents: (1) the names and addresses of all royalty owners with leases for gas wells; and (2) all written agreements between the defendants touching upon leases in Southeast Kansas, including the Area of Mutual Interest agreement. The defendants responded that the plaintiff’s request was unnecessary because according to them, those requests would not result in information that would help the Court to decide Plaintiff’s motion to remand. The defendants also claimed that the information would take some time for them to compile and object to providing personal information of putative class members before certification of any class.
In analyzing the plaintiff’s request, the District Court noted that it was undisputed that it had jurisdiction over the case under CAFA, but the only question here was whether the court is required to decline to exercise that jurisdiction pursuant to the local controversy exception. Under the circumstances, the District Court remarked that it did not appear that the information that the plaintiff sought might be readily available. Additionally, the District Court did not find that the plaintiff’s initial evidence of the applicability of the local controversy exception to be as strong as the plaintiff contended.
Accordingly, the District Court denied the plaintiff’s motion to remand, without prejudice, for refiling if information is obtained in discovery indicating that the local controversy applied.
It appears that the plaintiff attempted to use the remand related expedited discovery request to push their response to the defendants’ motion to dismiss. The Court determined that it had jurisdiction pursuant to CAFA and did not allow discovery in advance of the plaintiff’s response to the motion to dismiss. – JR