Weber v. Mobil Oil Corp., No. 5:05-cv-01175, 2006 WL 2045875 (W.D. Okla. July 20, 2006).
In this class action, filed in Oklahoma state court in 2001, the plaintiffs claim Mobil breached the parties’ contract by deducting unspecified production expenses from class members’ royalty payments, and that this practice breached each members’ lease resulting in conversion and fraud. Shortly after filing, Mobil attempted to remove the action alleging diversity jurisdiction under 28 U.S.C. section 1332, but the court granted the plaintiffs’ corresponding motion to remand in January of 2002. After an unexplained hiatus, the plaintiffs filed a motion for leave to amend their complaint in September of 2004, hoping to add six new representative plaintiffs, three new defendants, a few new claims, and a partridge and a pear tree to the mix. Against Mobil’s strenuous objection, the Oklahoma state court allowed the plaintiffs to add three new representative plaintiffs, and two new defendants, but denied the plaintiffs’ attempts to include the partridge, and the new claims of conspiracy and breach of implied duty to market. However, the amended petition included both new claims, prompting Mobil to file a motion to dismiss which was denied by the state court judge.
While all this interesting procedural jockeying was going on, another batch of plaintiffs filed a class action lawsuit in federal court against ExxonMobil, Mobil’s new moniker by 2004, alleging the corporation wrongfully withheld monies from them as holders of royalty mineral interests. Apparently counsel for plaintiffs in the state court action had a beer with plaintiffs’ counsel (of course, we have no idea if this is true but we like the sound of it) from the federal court action and decided their interest might be advanced if the state court plaintiffs asked the federal court to abstain from hearing the case until the state court action was adjudicated, and then the federal plaintiffs dismissed the defendants in federal court and intervened in the Oklahoma state court action. The plan worked, and the state court judge granted the motion to intervene in September of 2005, with the caveat that neither the pleadings nor the class certification would be changed. The two defendants added in the amended complaint, subsidiaries of Mobil, removed the action October 6, 2005, alleging jurisdiction under the Class Action Fairness Act and the complete diversity standard of section 1332.
Addressing the defendants’ argument that CAFA applies because the petition for intervention commenced an entirely new action post-CAFA with the original federal court plaintiffs asserting claims not originally asserted against the original state court defendants, District Judge Tim Leonard set out to determine the date the case commenced for CAFA purposes. After first considering the Seventh Circuit’s ruling in Prime Care of Northeast Kansas, LLC v. Humana Ins. Co., Judge Leonard made Mobil’s heart drop (even counsel for an oil company has a heart – probably) with his statement that its argument “elevates form over substance and ignores the reality of the case.” (Editors’ Note: See the CAFA Law Blog’s analysis of Prime Care posted on August 16, 2006).
The judge pointed out that the two subsidiaries were added by the amended petition in December of 2004, over two months before CAFA became law. Further, the court pointed to the fact that the state court judge allowed intervention on the condition that the addition did not alter the claims or the class definition. Thus, the intervention did not add any new defendants and did not commence an action after the effective date of CAFA. The court went on to consider whether removal under 1332 was proper, but concluded the defendants had not removed the action in a timely manner under 28 U.S.C section 1446(b)’s one year limit on removal of diversity actions. Therefore, Judge Leonard granted the plaintiffs’ motion to remand, sending the case to the District Court of Custer County, Oklahoma.