SUPREME COURT HEARS ORAL ARGUMENT ON PLEADING REQUIREMENTS FOR REMOVALS IN CLASS ACTION LAWSUITS

By TONI ELLINGTON

Oral argument in the Supreme Court is set for October 7, 2014, in the case of Dart Cherokee Basin Operating Co. v. Brandon W. Owens, No. 13-719, a case which addresses how notice pleading applies when a class action case is removed to federal court.  The issue in the case which will be decided by the Supreme Court specifically is whether a defendant who seeks to remove a class action case to federal court is required to include evidence supporting federal jurisdiction for class actions in the notice of removal, or whether it is enough to include merely a short and plain statement of the grounds for removal.

The case is an appeal from the Tenth Circuit Court of Appeals.  Plaintiffs in the case are a putative class of royalty owners with interests in some 700 wells in Kansas.  Lead Plaintiff Brandon W. Owens claims on behalf of the class members that the operator of the wells, DCBO, owes additional royalties to class members because DCBO paid royalties at a rate below market price, and DCBO improperly deducted charges from the sales price for gathering costs, compression, dehydration, computing costs, and conservation fees.  The district court found the notice of removal inadequate because it did not include an economical analysis of the amount in controversy.  Owens v. Dart Cherokee Basin Operating Co., 2013 WL 2237740, at *4 (D. Kan. May 21, 2013).  The Tenth Circuit held that the district court should not have remanded the case, because requiring the lead plaintiff to provide evidence to establish the amount in controversy was not required at the pleading stage.  

The arguments in the Supreme Court are likely to cover whether special pleading requirements for a notice of removal apply when a case is a class action lawsuit.  Interpretation of the class certification elements under the Class Action Fairness Act of 2005 will also be key to the arguments of the parties and may figure in the Court’s decision.

This case and the Supreme Court’s ultimate ruling will be of significance to all complex class action and mass tort litigants for their future pleadings.  For more information and updates, stay tuned to this blog, or contact Toni Ellington at (504) 599-8500.