UNITED STATES DISTRICT COURT WESTERN DISTRICT OF … · settlement with defendants Chesapeake...

5802076v1/015182

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF OKLAHOMA

IN RE ANADARKO BASIN OIL AND GAS LEASE ANTITRUST LITIGATION

Case No. CIV-16-209-HE

PLAINTIFFS’ MEMORANDUM IN SUPPORT OF MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT AND CLASS CERTIFICATION FOR

SETTLEMENT PURPOSES

Case 5:16-cv-00209-HE Document 220 Filed 09/05/18 of 35

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TABLE OF CONTENTS I. INTRODUCTION ........................................................................................................... 1

II. BACKGROUND ............................................................................................................. 2

III. THE SETTLEMENT AGREEMENT .............................................................................. 4

A. The Settlement Fund ............................................................................................ 4

B. Release of Claims ................................................................................................ 4

C. Notice and Implementation of the Settlement ....................................................... 5

D. Plan of Distribution .............................................................................................. 6

IV. ARGUMENT .................................................................................................................. 6

A. The Court Should Certify the Proposed Class and Preliminarily Approve the Settlement ........................................................................................ 6

B. The Requirements for Certification of This Settlement Class Under Rule 23(a) Are Satisfied ....................................................................................... 8

i. Legal Standard Governing Class Certification .......................................... 8

1. The Class Is So Numerous that Joinder Is Impracticable ............... 9

2. Common Questions of Law and Fact Exist.................................. 11

3. Claims of the Representative Parties Are Typical of the Claims of the Class ..................................................................... 13

4. Representative Parties Fairly and Adequately Protect the Interests of the Class ................................................................... 14

C. The Requirements of Rule 23(b)(3) Also Are Satisfied ...................................... 15

i. Questions of Law or Fact Common to the Class Predominate Questions Affecting Individual Members ............................................... 16

ii. Class Action Is Superior to Other Available Methods of Adjudication ........................................................................................... 17

D. Appointment of Class Counsel ........................................................................... 18

E. The Proposed Settlement Is Fair, Reasonable, and Adequate .............................. 19

i. Legal Standard Governing Preliminary Approval of Settlement .............. 19


ii

1. The Settlement Is the Product of Informed, Arm’s-Length Negotiations Between Experienced Counsel ................... 20

2. Questions of Law and Fact Pose Risks in the Litigation .............. 21

3. The Value of the Settlement Outweighs the Possibility of Future Relief ............................................................................... 22

4. Counsel Recommends Settlement ............................................... 23

F. The Proposed Notice and Plan of Dissemination Meets the Strictures of Rule 23 .............................................................................................................. 24

G. Proposed Schedule for Final Approval and Dissemination of Notice .................. 25

V. CONCLUSION ............................................................................................................. 25


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TABLE OF AUTHORITIES

Page(s)

Cases

Adamson v. Bowen, 855 F.2d 668 (10th Cir. 1988) ....................................................................................... 13, 22

Alvarado Partners, L.P. v. Mehta, 723 F. Supp. 540 (D. Colo. 1989) .................................................................................. 25, 26

Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 117 S. Ct. 2231 (1997) ...................................................................9, 17, 18, 20

Amgen Inc. v. Conn. Ret. Plans & Tr. Funds, 568 U.S. 455, 133 S. Ct. 1184 (2013) .................................................................................. 18

Anderson v. City of Albuquerque, 690 F.2d 796 (10th Cir. 1982) ............................................................................................... 9

Ballard v. Blue Shield of S. W. Va., Inc., 543 F.2d 1075 (4th Cir. 1976) ............................................................................................. 13

Beer v. XTO Energy, Inc., CIV-07-798-L, 2009 WL 764500 (W.D. Okla. Mar. 20, 2009) ...................................... 12, 20

In re Bromine Antitrust Litig., 203 F.R.D. 403 (S.D. Ind. 2001) .......................................................................................... 11

Childs v. Unified Life Ins. Co., 10-CV-23-PJC, 2011 WL 6016486 (N.D. Okla. Dec. 2, 2011) (Cleary, Mag. J.) ........................................................................................................................................ 24

Columbus Drywall & Insulation, Inc. v. Masco Corp., 258 F.R.D. 545 (N.D. Ga. 2007) .......................................................................................... 11

Cypress v. Newport News Gen. & Nonsectarian Hospital Ass’n, 375 F.2d 648 (4th Cir. 1967) ............................................................................................... 12

In re Dep’t of Energy Stripper Well Exemption Litig., 653 F. Supp. 108 (D. Kan. 1986), aff’d, 855 F.2d 865 (Temp. Emer. Ct. App. 1988)................................................................................................................................... 26

Esplin v. Hirschi, 402 F.2d 94 (10th Cir. 1968) ............................................................................................... 22


iv

In re Four Seasons Sec. Laws Litig., 59 F.R.D. 667 (W.D. Okla. 1973), rev’d on other grounds, 502 F.2d 834 (10th Cir. 1974) ............................................................................................................................ 15

Gold Strike Stamp Co. v. Christensen, 436 F.2d 791 (10th Cir. 1970) ............................................................................................. 18

Heartland Commc’ns, Inc. v. Sprint Corp., 161 F.R.D. 111 (D. Kan. 1995) ........................................................................................... 15

In re Home-Stake Prod. Co. Sec. Litig., 76 F.R.D. 351 (N.D. Okla. 1977) ......................................................................................... 12

Horn v. Associated Wholesale Grocers, Inc., 555 F.2d 270 (10th Cir. 1977) ............................................................................................. 12

Johnson v. Brennan, 10-CV-4712 CM, 2011 WL 1872405 (S.D.N.Y. May 17, 2011) .......................................... 23

Jones v. Nuclear Pharmacy, Inc., 741 F.2d 322 (10th Cir. 1984) ............................................................................................. 22

In re Linerboard Antitrust Litig., 203 F.R.D. 197 (E.D. Pa. 2001) ........................................................................................... 15

Marcus v. Kansas, Dept. of Revenue, 206 F.R.D. 509 (D. Kan. 2002) ........................................................................................... 22

McNeely v. Nat’l Mobile Health Care, LLC, CIV-07-933-M, 2008 WL 4816510 (W.D. Okla. Oct. 27, 2008) ................................... passim

Milonas v. Williams, 691 F.2d 931 (10th Cir. 1982) ............................................................................................. 15

In re Motorsports Merch. Antitrust Litig., 112 F. Supp. 2d 1329 (N.D. Ga. 2000) ................................................................................ 25

Naylor Farms v. Anadarko OGC Co., CIV-08-668-R, 2009 WL 8572026 (W.D. Okla. Aug. 26, 2009), order clarified sub nom. Naylor Farms, Inc. v. Anadarko OGC Co., CIV-08-668-R, 2011 WL 7267850 (W.D. Okla. June 15, 2011) ............................................................. 13, 18

Olenhouse v. Commodity Credit Corp., 136 F.R.D. 672 (D. Kan. 1991) ........................................................................................... 12

In re Optical Disk Drive Antitrust Litig., No. 3:10-md-2143, 2016 WL 467444 (N.D. Cal. Feb. 8, 2016) ........................................... 19


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In re Playmobil Antitrust Litig., 35 F. Supp. 2d 231 (E.D.N.Y. 1998).................................................................................... 13

In re Qwest Commc’ns Int’l, Inc., 625 F. Supp. 2d 1133 (D. Colo. 2009) ................................................................................. 24

Rex v. Owens ex rel. State of Okla., 585 F.2d 432 (10th Cir. 1978) ......................................................................................... 9, 11

Rutter & Wilbanks Corp. v. Shell Oil Co., 314 F.3d 1180 (10th Cir. 2002) ........................................................................................... 16

In re Scrap Metal Antitrust Litig., 527 F.3d 517 (6th Cir. 2008) ......................................................................................... 17, 19

State of W. Va. v. Chas. Pfizer & Co., 314 F. Supp. 710 (S.D.N.Y. 1970) ....................................................................................... 25

Strougo v. Bassini, 258 F. Supp. 2d 254 (S.D.N.Y. 2003) .................................................................................. 25

In re Sugar Indus. Antitrust Litig., 73 F.R.D. 322 (E.D. Pa. 1976) ............................................................................................. 13

Tennille v. W. Union Co., 785 F.3d 422 (10th Cir. 2015) ............................................................................................. 22

In re Texas Int’l Sec. Litig., 114 F.R.D. 33 (W.D. Okla. 1987) ........................................................................................ 16

United Food & Commercial Workers Union v. Chesapeake Energy Corp., 281 F.R.D. 641 (W.D. Okla. 2012) ................................................................................ 15, 16

In re Universal Serv. Fund Tel. Billing Practices Litig., 219 F.R.D. 661 (D. Kan. 2004) .......................................................................... 14, 15, 18, 20

In re Urethane Antitrust Litig., 237 F.R.D. 440 (D. Kan. 2006) ........................................................................................... 12

In re Urethane Antitrust Litig., 768 F.3d 1245 (10th Cir. 2014) ............................................................................... 14, 18, 19

In re Vitamins Antitrust Litig., 99-197(TFH), 1999 WL 1335318 (D.D.C. Nov. 23, 1999) .................................................. 22

Wal-Mart Stores, Inc. v. Visa U.S.A., Inc., 396 F.3d 96 (2d Cir. 2005) .................................................................................................. 23


vi

Wilkerson v. Martin Marietta Corp., 171 F.R.D. 273 (D. Colo. 1997) .......................................................................................... 26

Zapata v. IBP, Inc., 167 F.R.D. 147 (D. Kan. 1996) ........................................................................................... 17

Rules

FED. R. CIV. P. 23 ............................................................................................................... passim

Other Authorities

7A CHARLES ALAN WRIGHT, ARTHUR R. MILLER & MARY KAY KANE, FEDERAL PRACTICE & PROCEDURE § 1763 (3d ed. 2005) .................................................................... 13

4 NEWBERG ON CLASS ACTIONS § 13:10 (5th ed. 2017) ............................................................. 22


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Plaintiffs Edward Clark, Inc., Curtis Crandall, Amy Herzog, Mahony-Killian, Inc., Ida

Powers, and Brian Thieme (collectively, “Plaintiffs”), individually and on behalf of the proposed

class, submit this Memorandum in support of their Motion seeking preliminary approval of a class

settlement with defendants Chesapeake Energy Corp., Chesapeake Exploration, L.L.C.,

(“Chesapeake”), and Tom L. Ward, and their affiliates (collectively, “Defendants”) and

authorization to disseminate notice to class members. A copy of the Settlement Agreement, dated

August 30, 2018, is attached to the Declaration of Warren T. Burns (“Burns Decl.”) as Exhibit 1.

I. INTRODUCTION

This settlement—which provides for a lump-sum cash payment of $6.95 million—

represents an excellent result for the class. It is the hard-fought product of two separate all-day

mediation sessions conducted by the Honorable Michael Burrage, a retired Oklahoma federal

judge. In negotiating and ultimately agreeing to the terms of the settlement, the parties, represented

on both sides by highly experienced counsel with deep expertise in antitrust class actions, were

sufficiently familiar with the relevant facts and the associated legal issues they presented.

Accordingly, this settlement reflects the strengths and weaknesses both sides viewed with their

respective positions, as well as the risks associated with continuing to litigate the case.

At this stage of the litigation, Plaintiffs are quite familiar with the strengths of their case,

as well as the challenges they would have faced if this case proceeded. Plaintiffs’ counsel had

already conducted substantial discovery by the time settlement was reached. They reviewed

thousands of documents provided to the United States Department of Justice’s Antitrust Division

during its investigation into the underlying conduct. They took and defended depositions and

interviewed two of Chesapeake’s most important management-level employees with knowledge

of the alleged conspiracy. Plaintiffs’ expert economist and his staff were well underway in


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analyzing lease data for purposes of preparing his class certification report. And, perhaps most

importantly, Plaintiffs received a detailed, full-day proffer by Chesapeake, pursuant to the

Antitrust Criminal Penalty Enhancement and Reform Act of 2004, of potential anticompetitive

actions that it believed it did, and did not, take in the Mississippi Lime Play during the relevant

period. As a result, the parties had virtually all of the major relevant facts at their disposal in

negotiating and finalizing the terms of the settlement agreement.

Based on the foregoing, Plaintiffs’ counsel, who have litigated this case in earnest for more

than a year and are highly experienced in antitrust class actions, believe that the Settlement is fair,

reasonable, and represents an excellent result for the Class.

Plaintiffs respectfully submit that the Settlement satisfies the standards for preliminary

approval under Rule 23 of the Federal Rules of Civil Procedure—namely, it is sufficiently fair and

reasonable to warrant class-wide notice. Accordingly, Plaintiffs seek the Court’s approval to: (1)

appoint Settlement Class Counsel; (2) certify the proposed settlement class; (3) preliminarily

approve the proposed settlement agreement; (4) approve the form and manner of providing notice

of the settlement to the settlement class; (5) issue a stay of all proceedings against Defendants

except those proceedings provided for or required by the settlement agreement; and (6) set a

hearing date for final approval of the settlement.

II. BACKGROUND

On March 1, 2016, a grand jury indicted Aubrey McClendon, the former founder, president

and CEO of Chesapeake Energy, on the charge of engaging in an unreasonable restraint of

commerce in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1. The indictment alleged that

Mr. McClendon and unknown co-conspirators conspired to suppress and eliminate competition by


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rigging bids for certain leasehold interests and producing properties from December 27, 2007

through at least as late as April 1, 2013.

Shortly after the indictment was released, Plaintiffs filed their initial complaints alleging

that Chesapeake, SandRidge Energy Corp. (“SandRidge”), and Tom L. Ward violated the Sherman

Antitrust Act, 15 U.S.C. § 1, et seq., by conspiring to fix, raise, maintain, or stabilize lease bonuses

and royalty payments to lessors in the Mississippi Lime Play area of the Anadarko Basin Region.

See Dkt. 1. In April 2016, the Court consolidated each Plaintiff’s action into this matter. See Dkt.

38.

One month later, in May 2016, SandRidge and its subsidiaries and affiliates filed voluntary

petitions for bankruptcy under Chapter 11 of the Bankruptcy Code. See Dkt. 96. The case was

stayed during SandRidge’s bankruptcy until Plaintiffs filed an unopposed motion to reopen the

case (Dkt. 138), which the Court granted in March 2017 (Dkt. 162).

With SandRidge out of the picture, the remaining parties vigorously litigated the case. For

the better part of the past year, Plaintiffs have conducted significant discovery to help prove their

case. They reviewed documents and worked with experienced economists to analyze the

companies’ lease data. They have taken depositions, conducted witness interviews, engaged in

merits-based discovery, and subpoenaed the phone records of the companies’ key employees for

additional evidence to support the existence of the alleged anticompetitive conspiracy.

With only a few months of fact discovery remaining, the Court entered the parties’ jointly

proposed scheduling order that required the parties to mediate the case before March 1, 2018. See

Dkt. 191. The parties selected a retired federal judge, the Honorable Michael Burrage, as the

mediator.


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Plaintiffs and Chesapeake sat down for their first mediation session on January 31, 2018,

in Oklahoma City, Oklahoma. The mediation began at 9:00 AM and lasted all day, but it did not

conclude in a settlement. Nonetheless, because they made substantial progress toward resolving

the case, the parties jointly moved to extend the deadline to mediate until April 16, 2018, so they

could schedule a second mediation that all Defendants could attend. The Court granted the parties’

motion. See Dkt. 202.

On April 12, 2018, counsel for Plaintiffs, Chesapeake, and Mr. Ward attended the second

mediation in Oklahoma City, Oklahoma presided by the Honorable Michael Burrage (ret.). Like

the first one, the second mediation began at 9:00 AM and was hotly contested throughout the day.

The parties ultimately agreed to the material terms of a proposed settlement and executed a

Memorandum of Understanding outlining those terms by close of business. See Dkt. 204.

Since that time, the parties have been negotiating the other details of the settlement. The

settlement agreement is now final and ready for presentment to the Court.

III. THE SETTLEMENT AGREEMENT

The settlement provides a substantial monetary payment to the class and contains other

important provisions that will benefit the class. The settlement’s key terms are discussed below.

A. The Settlement Fund

Defendants have agreed to a lump-sum payment of $6,950,000. This payment is the full

amount owed under the settlement agreement, and is inclusive of any attorneys’ fees, expenses,

and service awards that might be ordered by this Court. Burns Decl. Exhibit 1 (“Settlement

Agreement”) ¶ 24.

B. Release of Claims

Once the Settlement Agreement is final and effective, Plaintiffs and the class shall release

Defendants and any of their related entities as defined by the settlement agreement, for any and all


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state and federal claims, either known or unknown, arising from or relating to the factual

allegations in Plaintiffs’ Consolidated Amended Class Action Complaint (Dkt. 164), or any claims

that could have been brought under federal or state antitrust, unfair competition, unfair practices,

fraud, racketeering, price discrimination, unjust enrichment, unitary pricing or trade practice law

concerning Defendants’ leasing practices in the Mississippi Lime Play. Settlement Agreement

¶ 23.

C. Notice and Implementation of the Settlement

The proposed notice and plan for dissemination set forth in Burns Decl. Exhibits 2–4

describe in detail how members of the proposed Settlement Class will be notified of this settlement.

Generally speaking, the class members will be notified in three ways under the plan. First, direct

mail will be sent directly to class members for which Chesapeake and SandRidge have current

contact information. Second, summary notice will appear in leading daily newspapers circulating

throughout the counties in the Mississippi Lime Play. Third, class members will be notified of

this settlement by press releases in both Oklahoma and Kansas.

Within 15 days of preliminary approval, Defendants will send via wire or overnight mail

$6,950,000 to the Escrow Account, which amount shall be available immediately thereafter for

reimbursement of such costs, fees, and expenses associated with the provision of notice to the

members of the settlement class as may be approved by the Court. Id. ¶ 24.

KCC, the claims administrator, will be responsible for determining the monetary award

that shall be awarded to class members from the Settlement Fund based on their pro-rata share,

which is calculated based on their total compensation compared to the total compensation of all

class members throughout the class period, as described in the plan of allocation. The claims

administrator’s decision shall be final and unreviewable. Class counsels’ attorneys’ fees and cost

payments and the representative Plaintiffs’ service awards are subject to court approval.


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D. Plan of Distribution

The Plan of Distribution set forth in the long-form class notice describes in detail how the

settlement funds will be allocated. Under the plan, part of the Settlement Fund will be used to pay

any attorneys’ fees, expenses, and incentive awards to class representatives after approval by the

Court. Additionally, the parties have agreed that Defendants will not unreasonably withhold

approval for Plaintiffs to deduct from the Settlement Fund expenses incurred for notice and

administrative costs. The Net Settlement Fund will be distributed on a pro rata basis among all

members of the Settlement Classes who submit valid and timely claim forms. In other words, each

Settlement Class member shall be paid a percentage of the Net Settlement Fund that each class

member’s recognized claim bears to the total of all recognized claims submitted by all Settlement

Class members who file claims.

IV. ARGUMENT

A. The Court Should Certify the Proposed Class and Preliminarily Approve the Settlement

Chesapeake has admitted to certain communications with SandRidge related to the

acquisition of certain mineral rights in the Mississippi Lime Play. In the course of a federal

investigation, Chesapeake produced over a million pages of documents and data to the DOJ related

to these communications. Indeed, Chesapeake has voluntarily cooperated with the DOJ and

admitted to what it believes is potential anticompetitive conduct for a handful of transactions. For

example, in its answer to the class action complaint, “Chesapeake admits that McClendon and

Ward reached some potentially anticompetitive agreements in 2008 and 2011.” See Dkt. 181 ¶¶

4, 29–30.

Importantly, Mr. Ward denies that any such communications revealed by Chesapeake

violated the antitrust laws in any way and, absent this settlement, intends to vigorously defend


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those claims. Moreover, the parties also hotly contest other factual issues including: 1) the scope

of any alleged conspiracy, and 2) the impact, if any, the alleged conspiracy had in the relevant

geographic area. Plaintiffs alleged an overarching conspiracy among Defendants and SandRidge

to artificially lower and stabilize bonus and royalty payments to landowners throughout the

Mississippi Lime Play and contend that this alleged conspiracy manifested itself through bid-rigs

for certain parcels of land that are memorialized in contemporaneous documents. Plaintiffs

contended that the alleged conspiracy, however, was much wider than what was reflected in those

documents and that defendants conspired to suppress prices generally to class members by, among

other mechanisms, rigging bids,discussing and agreeing on prices, and allocating geographic

areas.

Defendants contended that there was no overarching conspiracy or any communications

outside of these select few transactions, and that Chesapeake did not admit to a larger conspiracy

in the parallel DOJ investigation. Chesapeake, moreover, reached settlements with nearly all of

the proposed class members who it believed may have been affected by the certain

communications before the instant case truly got underway, thus further limiting its potential

exposure in this suit.1 Again, Mr. Ward denies that any such communications related to those

purchases violated the antitrust laws in any way. The parties heavily debated these issues

throughout the course of litigation and during the mediation.

While Plaintiffs believe they could prove a larger scale conspiracy that caused widespread

harm to the class, the ultimate outcome would have been uncertain. And getting to this outcome

would have taken an enormous amount of time and resources of the parties and the Court alike.

Instead of continuing this protracted litigation, both Plaintiffs and Defendants have agreed to settle

1 Plaintiffs unsuccessfully sought to limit these contacts. See Dkt. 172 (Plaintiffs’ Motion for a Protective Order) and Dkt. 179 (denying Plaintiffs’ motion).


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this dispute, subject to the Court’s approval. This settlement follows extensive, arm’s-length

negotiations between experienced counsel during two mediation sessions held in Oklahoma City,

Oklahoma. Both mediation sessions were overseen by the Honorable Michael Burrage (ret.) based

in Oklahoma City.

Moreover, Plaintiffs and Defendants consent to the class certification and settlement

agreement and believe that settlement is in the best interests of the proposed settlement class. See

Settlement Agreement ¶ 17. As enumerated below, the proposed settlement class should be

certified as a class action and the proposed settlement preliminarily approved.

B. The Requirements for Certification of This Settlement Class Under Rule 23(a) Are Satisfied

i. Legal Standard Governing Class Certification

A court may certify a class that, as here, satisfies the four requirements of Rule 23(a) and

at least one subsection of Rule 23(b). Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 621, 117 S.

Ct. 2231, 2248 (1997); Anderson v. City of Albuquerque, 690 F.2d 796, 799 (10th Cir. 1982); Rex

v. Owens ex rel. State of Okla., 585 F.2d 432, 435 (10th Cir. 1978). Plaintiffs moving for class

certification must first satisfy the requirements of Rule 23(a): numerosity, commonality, typicality,

and adequacy of representation. FED. R. CIV. P. 23(a).

Here, Defendants consent to class certification for settlement purposes. See Settlement

Agreement ¶ 17. The Plaintiffs move the Court to certify this settlement class consisting of:

All persons and entities who sold, leased or otherwise assigned or transferred to Chesapeake or SandRidge, or any of their respective predecessors, subsidiaries, agents (such as landmen) or affiliates, mineral rights and/or working interests on lands within the Mississippi Lime Play, at any time between December 27, 2007 and April 1, 2013. For purposes of this Settlement Class, the Mississippi Lime Play includes all depths and formations within the Oklahoma counties of Alfalfa, Blaine, Creek, Dewey, Ellis, Garfield, Grant, Harper, Kay, Kingfisher, Logan, Lincoln, Major, Noble, Osage, Pawnee, Payne, Tulsa, Washington, Woods, and Woodward, and the Kansas counties of Barber, Butler, Chase, Chautauqua, Cheyenne, Clark, Coffey, Comanche, Cowley, Dickinson, Edwards, Elk, Finney, Ford, Gove, Grant,


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Gray, Greenwood, Harper, Harvey, Haskell, Hodgeman, Kearny, Kingman, Kiowa, Lane, Logan, Lyon, Marion, McPherson, Meade, Montgomery, Morris, Ness, Pawnee, Pratt, Rawlins, Reno, Rice, Rush, Saline, Scott, Sedgwick, Seward, Sheridan, Sherman, Stafford, Stevens, Sumner, Thomas, Trego, Wallace, Wichita, Wilson, and Woodson. Excluded from the Class are Defendants, SandRidge, any parent, subsidiary, agent or affiliate thereof, their officers, directors, employees, and immediate families, federal and state governmental entities and instrumentalities of federal and state governments, and any individuals or entities from whom Chesapeake has already settled.

See id. ¶ 1.

As explained below, the proposed settlement class satisfies the Rule 23 requirements for

class certification.

1. The Class Is So Numerous that Joinder Is Impracticable

Rule 23(a) requires that “the class is so numerous that joinder of all members is

impracticable . . .” FED. R. CIV. P. 23(a)(1). “The Tenth Circuit does not prescribe any set formula

to satisfy the numerosity element, nor has it said numerosity may be presumed by a specific

number of class members.” McNeely v. Nat’l Mobile Health Care, LLC, CIV-07-933-M, 2008

WL 4816510, at *5 (W.D. Okla. Oct. 27, 2008); Rex v. Owens ex rel. State of Okla., 585 F.2d 432,

436 (10th Cir. 1978) (holding there is “no set formula to determine if the class is so numerous that

it should be so certified” and that “[c]lass actions have been deemed viable in instances where as

few as 17 to 20 persons are identified as the class”).

Courts have certified class actions and approved settlements with an undefined number of

class members, particularly if the alleged conspiracy spanned several years and included

geographically diverse class members like in this case. See Columbus Drywall & Insulation, Inc.

v. Masco Corp., 258 F.R.D. 545, 554 (N.D. Ga. 2007) (certifying class and approving preliminary

settlement of a price-fixing case where “[t]he proposed settlement class does not specify the

number of plaintiffs in the potential settlement class,” but based on initial transactional data

“hundreds” of direct purchasers over a five-year period made joinder “wholly impracticable, if not


10

impossible”); In re Bromine Antitrust Litig., 203 F.R.D. 403, 407 (S.D. Ind. 2001) (estimate of

over 1,000 class members living in various states satisfied numerosity requirement).

Here, the alleged conspiracy began as early as December 2007 and lasted until April 2013,

in which Plaintiffs estimate that thousands of class members sold leaseholds or working interests

to Chesapeake and SandRidge, rendering joinder of all class members impracticable. Further,

more precise information on who comprises the class is in the possession of the two companies,

and unfortunately, the recently-bankrupt SandRidge did not maintain a centralized database

tracking lease bonuses and royalty payments to landowners. Nevertheless, “the fact that the exact

number of potential members of the class cannot be ascertained does not bar a class action

certification.” In re Home-Stake Prod. Co. Sec. Litig., 76 F.R.D. 351, 361 (N.D. Okla. 1977); In

re Urethane Antitrust Litig., 237 F.R.D. 440, 446 (D. Kan. 2006) (numerosity element satisfied

citing that “plaintiffs believe the class consists of hundreds, if not thousands, of geographically

dispersed businesses”).

In fact, the estimated thousands of class members far exceed the number of class members

in other cases where courts have certified a class. See, e.g., Horn v. Associated Wholesale Grocers,

Inc., 555 F.2d 270, 275 (10th Cir. 1977) (class size of 46 plaintiffs was large enough to warrant

class certification); Cypress v. Newport News Gen. & Nonsectarian Hosp. Ass’n, 375 F.2d 648,

652-54 (4th Cir. 1967) (approving class size of 18); Olenhouse v. Commodity Credit Corp., 136

F.R.D. 672, 679 (D. Kan. 1991) (“[G]ood faith estimate of at least 50 members . . . is of sufficient

size to be maintained as a class action.”).

Joinder is also impracticable when the class members are geographically diverse. Home-

Stake Prod., 76 F.R.D. at 361 (geographic diversity among potential claimants adds to

impracticability of joinder); Beer v. XTO Energy, Inc., CIV-07-798-L, 2009 WL 764500, at *3


11

(W.D. Okla. Mar. 20, 2009) (class comprised of “200 individual wells, each of which have

numerous royalty owners who reside in many different states”). Here, the alleged conspiracy

covered leases in over 40 counties across Oklahoma and Kansas. In total, the number of

individuals and entities living in different states who sold their leasehold interest to Chesapeake

and SandRidge during the five-and-a-half-year span of the alleged conspiracy makes joinder

impracticable. Accordingly, the settlement class meets the numerosity requirement.

2. Common Questions of Law and Fact Exist

Here, as in almost every antitrust conspiracy case, the “commonality” requirement of Rule

23(a)(2) is satisfied. Antitrust cases inherently deal with common legal and factual issues. See,

e.g., Ballard v. Blue Shield of Sw. Va., Inc., 543 F.2d 1075, 1080 (4th Cir. 1976) (“Class actions

are frequently maintained in antitrust cases because of the many questions of law and fact that are

common to the members of the class.”); In re Playmobil Antitrust Litig., 35 F. Supp. 2d 231, 240

(E.D.N.Y. 1998) (collecting price-fixing cases); In re Sugar Indus. Antitrust Litig., 73 F.R.D. 322,

335 (E.D. Pa. 1976) (“Antitrust, price-fixing conspiracy cases, by their nature, deal with common

legal and factual questions about the existence, scope and effect of the alleged conspiracy.”); 7A

CHARLES ALAN WRIGHT, ARTHUR R. MILLER & MARY KAY KANE, FEDERAL PRACTICE &

PROCEDURE § 1763 (3d ed. 2005).

Further, “[t]hat the claims of individual class members may differ factually should not

preclude certification under Rule 23(b)(2) of a claim seeking the application of a common policy.”

Adamson v. Bowen, 855 F.2d 668, 676 (10th Cir. 1988); see also Naylor Farms v. Anadarko OGC

Co., CIV-08-668-R, 2009 WL 8572026, at *5 (W.D. Okla. Aug. 26, 2009), order clarified sub

nom. Naylor Farms, Inc. v. Anadarko OGC Co., CIV-08-668-R, 2011 WL 7267850 (W.D. Okla.

June 15, 2011) (“While determining damages will require individual calculations, this does not

preclude a finding of commonality.”).


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In this case, the following common questions exist with respect to each member of the

proposed settlement class:

a) Whether Defendants engaged in a combination or conspiracy to fix, stabilize, and artificially suppress prices paid to Plaintiffs and the other members of the class for leasehold interests and interests in producing properties;

b) Whether Defendants agreed to and did pay artificially suppressed prices for bonus and royalty payments paid to Plaintiffs and the other class members;

c) Whether Defendants agreed to and did rig bids for the purchase of leasehold interests and interests in producing properties from Plaintiffs and the other class members;

d) Whether Defendants agreed to and did allocate customers and markets for the purchase of leasehold interests and interests in producing properties from Plaintiffs and the other class members;

e) Whether the purpose or effect of the acts and omissions alleged herein was to restrain trade, or to affect, fix, or depress the price of leasehold interests and interests in producing properties;

f) Whether this alleged conspiracy constituted a per se violation of Section 1 of the Sherman Act;

g) Whether Defendants’ agents, officers, employees, or representatives participated in communications, correspondence and meetings in furtherance of the illegal conspiracy alleged herein, and, if so, whether such agents, officers, employees, or representatives were acting within the scope of their authority and in furtherance of Defendants’ business interests;

h) The duration and extent of the alleged conspiracy;

i) Whether, and to what extent, the alleged conduct of Defendants caused injury to Plaintiffs and members of the Class; and

j) The appropriate measure and amount of damages, if any.

Indeed, courts in this Circuit have held that many of the issues described above present

common issues of fact or law. See In re Urethane Antitrust Litig., 768 F.3d 1245, 1256 (10th Cir.

2014) (affirming trial court’s certification of class in price-fixing case where “two common

questions [ ] could yield common answers at trial: the existence of a conspiracy and the existence

of impact”); In re Universal Serv. Fund Tel. Billing Practices Litig., 219 F.R.D. 661, 666 (D. Kan.


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2004) (common issues include: whether defendants “engaged in a combination or conspiracy to

raise, fix, stabilize, and maintain [] surcharges at supracompetitive levels; the effect of the alleged

[ ] conspiracy; . . . and whether the alleged combination or conspiracy violated the antitrust laws”).

Accordingly, the settlement class meets the commonality requirement.

3. Claims of the Representative Parties Are Typical of the Claims of the Class

Typicality is rarely at issue in price-fixing litigation. See Universal Serv. Fund, 219 F.R.D.

at 666 (citing In re Linerboard Antitrust Litig., 203 F.R.D. 197, 207 (E.D. Pa. 2001) (noting the

typicality requirement is generally satisfied in antitrust disputes because the named plaintiffs need

to prove a conspiracy, its effectuation, and damages, which is precisely what the absentee class

members must also prove)). Here, “the claims . . . of the representative parties are typical of the

claims . . . of the class . . . .” FED. R. CIV. P. 23(a)(3). Typicality, however, does not require that

the claims be identical. Milonas v. Williams, 691 F.2d 931, 938 (10th Cir. 1982). Rather, the class

representatives must have the “same interests and suffer the same injuries as the proposed class

members.” Heartland Commc’ns, Inc. v. Sprint Corp., 161 F.R.D. 111, 116 (D. Kan. 1995). Thus,

“typicality may be satisfied even though varying fact patterns support the claims or defenses of

individual class members or there is a disparity in the damages claimed by the representative

parties and the other members of the class.” United Food & Commercial Workers Union v.

Chesapeake Energy Corp., 281 F.R.D. 641, 652 (W.D. Okla. 2012) (citing In re Four Seasons Sec.

Laws Litig., 59 F.R.D. 667, 681 (W.D. Okla. 1973), rev’d on other grounds, 502 F.2d 834 (10th

Cir. 1974).

Typicality is satisfied here because the representative Plaintiffs each allege the same legal

theories and fact issues that underlie the rest of the settlement class’s claims—that Defendants

engaged in a common course of conduct to deprive them of market-based prices and fair bonus


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and royalty payments for their leasehold interests. See Dkt. 164. Plaintiffs alleged that they and

the members of the settlement class were all victims of the same alleged conspiracy to fix prices

and allocate markets and customers through illegal bid-rigging. Id. As a result, Plaintiffs allege

that each member of the settlement class suffered the same type of injury arising out of the same

factual scenario and type of evidence that could be used to establish Defendants’ liability.

Plaintiffs seek to recover damages that resulted from Defendants’ alleged conspiracy to fix

prices. “As with commonality, individual damage questions do not preclude a finding of

typicality.” United Food, 281 F.R.D. at 652 (citing In re Texas Int’l Sec. Litig., 114 F.R.D. 33, 44

(W.D. Okla. 1987). Accordingly, the settlement class meets the typicality requirement.

4. Representative Parties Fairly and Adequately Protect the Interests of the Class

Adequacy of representation requires that the “representative parties will fairly and

adequately protect the interests of the class.” This factor, in turn, necessitates a two-step inquiry

into whether: (1) “the named plaintiffs and their counsel have any conflicts of interest with other

class members; and (2) [ ] the named plaintiffs and their counsel prosecute the action vigorously

on behalf of the class.” FED. R. CIV. P. 23(a)(4); Rutter & Wilbanks Corp. v. Shell Oil Co., 314

F.3d 1180, 1187–88 (10th Cir. 2002) (internal citations omitted); McNeely v. Nat’l Mobile Health

Care, LLC, CIV-07-933-M, 2008 WL 4816510, at *7 (W.D. Okla. Oct. 27, 2008).

The settlement class meets both requirements. First, there is no evidence of a conflict of

interest between the representative Plaintiffs and the class members. McNeely, 2008 WL 4816510,

at *7 (holding the conflict of interest must be “more than merely speculative or hypothetical” and

a showing of a “real probability”). The representative Plaintiffs fairly and adequately protected

the interests of the class because they are all leaseholders in the Mississippi Lime Play who were

subject to the alleged conspiracy. Just as the rest of the class, the representative Plaintiffs and the


15

class have a genuine interest in the outcome of the matter. Plaintiffs have also actively participated

in the litigation by reviewing and producing documents, responding to discovery, and providing

deposition testimony. Declaration of Warren T. Burns. ¶ 3.

The Plaintiffs are also represented by seasoned counsel who are thoroughly familiar with

class action and antitrust litigation. See McNeely, 2008 WL 4816510, at *7. (applying

presumptions of competence and experience of class counsel); Zapata v. IBP, Inc., 167 F.R.D.

147, 161 (D. Kan. 1996) (“In the absence of proof to the contrary, courts presume that class counsel

is competent and sufficiently experienced to vigorously prosecute the action on behalf of the

class.”). In fact, this Court impliedly held so when it appointed Interim Co-Lead Counsel for the

proposed class (“Interim Counsel”) on April 3, 2017. See Dkt. 163. Moreover, there is no dispute

that counsel for any of the parties are qualified, experienced, and vigorously prosecuted the class

action. Burns Decl. ¶ 3. Accordingly, the representative Plaintiffs will fairly and adequately

protect the interests of the settlement class.

C. The Requirements of Rule 23(b)(3) Also Are Satisfied

Once a court determines that the proposed class satisfies the requirements of Rule 23(a), a

class should be certified if the court also “finds that the questions of law or fact common to the

members of the class predominate over any questions affecting only individual members, and that

a class action is superior to other available methods . . . .” FED. R. CIV. P. 23(b)(3). Antitrust

actions, such as this one, readily satisfy these requirements because “proof of the conspiracy is a

common question that is thought to predominate over the other issues of the case.” In re Scrap

Metal Antitrust Litig., 527 F.3d 517, 535 (6th Cir. 2008) (quoting Amchem Prods., Inc. v. Windsor,

521 U.S. 591, 625 (1997)) (emphasis in original). And proceeding as a class action would

expediently resolve this case, especially when Defendants do not oppose class certification for


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settlement purposes, and the Plaintiffs have previously filed individual suits against the Defendants

before the Court consolidated them into the present action. See Dkt. 38.

i. Questions of Law or Fact Common to the Class Predominate Questions Affecting Individual Members

“The Rule 23(b)(3) predominance inquiry tests whether proposed classes are sufficiently

cohesive to warrant adjudication by representation.” Amchem, 521 U.S. at 622–23; see Amgen

Inc. v. Conn. Ret. Plans & Tr. Funds, 568 U.S. 455, 459 (2013) (predominance requires that

“questions common to the class predominate, not that those questions will be answered, on the

merits, in favor of the class”) (emphasis in original). Though commonality and predominance are

similar fact inquiries, commonality under Rule 23(a)(2) requires only “a single common issue of

fact or law shared by the class,” while “the predominance and superiority requirements of Rule

23(b)(3) are far more demanding.” Naylor Farms v. Anadarko OGC Co., CIV-08-668-R, 2009

WL 8572026, at *4 (W.D. Okla. Aug. 26, 2009), order clarified sub nom. Naylor Farms, Inc. v.

Anadarko OGC Co., CIV-08-668-R, 2011 WL 7267850 (W.D. Okla. June 15, 2011); In re

Universal Serv. Fund Tel. Billing Practices Litig., 219 F.R.D. 661, 666 (D. Kan. 2004).

Plaintiffs satisfy the predominance inquiry. The question of whether a conspiracy existed

may, standing alone, warrant class treatment under Federal Rule of Civil Procedure 23(b)(3).

Indeed, the Tenth Circuit held that “courts have regarded the existence of a conspiracy as the

overriding issue” in antitrust class actions. In re Urethane Antitrust Litig., 768 F.3d 1245, 1255

(10th Cir. 2014) (collecting cases); Gold Strike Stamp Co. v. Christensen, 436 F.2d 791, 796 (10th

Cir. 1970) (“[W]here the question of basic liability [in antitrust cases] can be established readily

by common issues, then it is apparent that the case is appropriate for class action.”).

Nevertheless, Plaintiffs also would have utilized common evidence to show that the alleged

conspiracy inflicted widespread harm on the class. Plaintiffs would have made this showing by


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utilizing both fact evidence and expert economic and statistical analysis, as antitrust plaintiffs

routinely do. See, e.g., In re Optical Disk Drive Antitrust Litig., No. 3:10-md-2143, 2016 WL

467444, at *1, 5–7 (N.D. Cal. Feb. 8, 2016) (certifying class largely on the basis of plaintiffs’

expert’s econometric analysis where plaintiffs alleged the “multiple instances of bid-rigging” that

defendants conceded were “merely one part of a vast industry-wide price-fixing conspiracy” even

though plaintiffs did not submit “allegations of any instances in which the defendants’ executive

decision-makers entered into express agreements to fix prices across the board on an ongoing

basis”). If “plaintiffs can establish that the defendants conspired to interfere with the free-market

pricing structure,” which Plaintiffs intended to do here through fact evidence and reliable expert

economic and econometric analysis, then “even where there are individual variations in damages,

the requirements of Rule 23(b)(3) are satisfied.” Urethane, 768 F.3d at 1255 (quoting In re Scrap

Metal Antitrust Litig., 527 F.3d at 536).

Since the same source of evidence, in support of antitrust violation, impact and damages,

would apply to all or nearly all class members’ cases, this case warrants class certification.

Accordingly, the settlement class meets the predominance requirement to certify the class.

ii. Class Action Is Superior to Other Available Methods of Adjudication

The Court must balance the advantages of class action with other available methods of

adjudication by examining:

(A) the class members’ interests in individually controlling the prosecution or defense of separate actions;

(B) the extent and nature of any litigation concerning the controversy already begun by or against class members;

(C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and

(D) the likely difficulties in managing a class action.


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FED. R. CIV. P. 23(b)(3). Though in a settlement-only class certification, a court “need not inquire

whether the case, if tried, would present intractable management problems.” Amchem Prods., Inc.

v. Windsor, 521 U.S. 591, 620, 117 S. Ct. 2231 (1997); FED. R. CIV. P. 23(b)(3)(D).

Here, any interests of class members in individually prosecuting claims are outweighed by

the efficiency of the class device. See Universal Serv., 219 F.R.D. at 679 (finding individual suits

against defendants would be “grossly inefficient, costly, and time consuming because the parties,

witnesses, and courts would be forced to endure unnecessarily duplicative litigation” while a “class

action is by far the more superior method”).

Finally, this forum is particularly appropriate for adjudicating the settlement class claims

as a majority of the leaseholds are situated within this district. See XTO Energy, Inc., 2009 WL

764500, at *7 (finding forum appropriate since the majority of wells involved in the class action

are located in the Western District of Oklahoma). Indeed, the primary counties in which the

alleged conspiracy took place—Woods, Grant, and Alfalfa counties—are each in this district.

Accordingly, the settlement class meets the Rule 23(b)(3) requirements of predominance and

superiority. Certifying this settlement class and approving the settlement would be fair and the

most expedient way to resolve the issues in this case.

D. Appointment of Class Counsel

For class certification and settlement purposes, Plaintiffs seek the Court’s approval for

appointment of class counsel. On April 3, 2017, this Court appointed Warren T. Burns of Burns

Charest LLP; Terrell W. Oxford of Susman Godfrey LLP; Christopher J. Cormier of Cohen

Milstein Sellers & Toll PLLC; and Todd M. Schneider of Schneider Wallace Cottrell Konecky

Wotkyns, LLP as Interim Counsel for the proposed class. See Dkt. 163. Plaintiffs seek the Court’s

appointment of the same Interim Counsel to represent Plaintiffs as the Class Counsel for the

settlement class.


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E. The Proposed Settlement Is Fair, Reasonable, and Adequate

All parties agree that the proposed settlement is fair, reasonable, adequate, and should be

approved by the Court. Since the initial filing of the complaint, all parties have vigorously

prosecuted and defended this case, which has reached its end with the proposed class settlement.

Defendants do not contest the proposed class settlement and have had every opportunity to litigate

the matter. It is worth noting that Chesapeake voluntarily cooperated with the DOJ investigation

and acknowledged the existence of communications and agreements in a handful of transactions

(while Mr. Ward vigorously denies that any communications and/or agreements violated the

antitrust laws in any way). Although Plaintiffs and their experts found circumstantial evidence

that the conspiracy may have been wider than the limited number of communications

acknowledged by Chesapeake, prolonging the litigation to prove the scope of the conspiracy would

drive up litigation expenses and leave uncertain outcomes for the class members. And so, the

parties arrived at a settlement early, before trial and the deadline for dispositive motions, to resolve

those uncertainties in a more efficient and effective manner for the benefit of the proposed class.

This settlement was the result of vigorous arm’s-length negotiations, conducted after

extensive factual investigation and legal and economic analyses. Such good-faith negotiations

were conducted by the Honorable Michael Burrage (ret.) over two mediation sessions. Further,

Interim Counsel and Defendants’ counsel, who are experienced in these matters, believe that the

proposed settlement is in the best interest of the settlement class. Accordingly, Plaintiffs seek the

Court’s approval of the proposed settlement.

i. Legal Standard Governing Preliminary Approval of Settlement

Preliminary approval of the settlement agreement is appropriate if the proposed settlement

is “fair, reasonable, and adequate” so that notice should be given to the proposed class, and a

hearing scheduled to consider final approval of the settlement. Tennille v. W. Union Co., 785 F.3d


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422, 430 (10th Cir. 2015); Marcus v. Kan. Dep’t. of Revenue, 206 F.R.D. 509, 513 (D. Kan. 2002).

Because preliminary approval is followed by more formal and comprehensive review and

objection procedures, a court need not decide the merits of the underlying case and any doubts

should be resolved in favor of preliminary approval. Adamson v. Bowen, 855 F.2d 668, 676 (10th

Cir. 1988) (holding in determining the certification of a class, the “district court should avoid

focusing on the merits underlying the class claim”); Esplin v. Hirschi, 402 F.2d 94, 99 (10th Cir.

1968) (same); see, e.g., In re Vitamins Antitrust Litig., 99-197(TFH), 1999 WL 1335318, at *5

(D.D.C. Nov. 23, 1999) (explaining that preliminary approval is appropriate absent “obvious

deficiencies” raising doubts about the fairness of the settlement); 4 NEWBERG ON CLASS ACTIONS

§ 13:10 (5th ed. 2017).

To assess whether a settlement is fair, reasonable and adequate, the Tenth Circuit identifies

four factors that the trial court should consider:

(1) whether the proposed settlement was fairly and honestly negotiated;

(2) whether serious questions of law and fact exist, placing the ultimate outcome of the litigation in doubt;

(3) whether the value of an immediate recovery outweighs the mere possibility of future relief after protracted and expensive litigation; and

(4) the judgment of the parties that the settlement is fair and reasonable.

Jones v. Nuclear Pharmacy, Inc., 741 F.2d 322, 324 (10th Cir. 1984). All four factors strongly

weigh in favor of preliminary approval here.

1. The Settlement Is the Product of Informed, Arm’s-Length Negotiations Between Experienced Counsel

After a thorough assessment by Interim Counsel of the strengths and weaknesses of the

Plaintiffs’ case, and in light of the significant amount of work discussed above, both sides

possessed sufficient information to reach a fair, reasonable, and adequate settlement. See McNeely


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v. Nat’l Mobile Health Care, LLC, CIV-07-933-M, 2008 WL 4816510, at *12 (W.D. Okla. Oct.

27, 2008) (citing Wal-Mart Stores, Inc. v. Visa U.S.A., Inc., 396 F.3d 96, 116 (2d Cir. 2005) (a

“presumption of fairness, adequacy, and reasonableness may attach to a class settlement reached

in arm’s-length negotiations between experienced, capable counsel after meaningful discovery”)

(internal quotation marks omitted))

Further, the terms of the settlement were vigorously negotiated by Plaintiffs’ and

Defendants’ counsel and included two mediation sessions with the Honorable Michael Burrage in

Oklahoma City, Oklahoma. Burns Decl. ¶ 4. The extensive participation of an experienced

mediator like the Honorable Michael Burrage (ret.) “reinforces that the Settlement Agreement is

non-collusive.” Johnson v. Brennan, 10-CV-4712 CM, 2011 WL 1872405, at *1 (S.D.N.Y. May

17, 2011). Nothing in the course of negotiating the settlement discloses any collusion or other

grounds to doubt its fairness. Accordingly, the parties’ negotiations, informed by the underlying

facts as well as legal analysis, were protracted, hard-fought, and conducted in the utmost good

faith, rendering a fair process to a fair settlement.

2. Questions of Law and Fact Pose Risks in the Litigation

The settlement reflects the risks Plaintiffs must consider in reaching a successful outcome

for class members through class certification, dispositive motions, trial, and appeal. For example,

although Plaintiffs believe the class members have meritorious claims, there are significant risks

with continuing this case. Had the parties not settled this case, the Court or jury would ultimately

be required to decide these issues at the summary judgment stage or at trial—if the Court first

certified a litigation class—placing the ultimate outcome of this action in doubt. To this day, Mr.

Ward denies the existence of any conspiracy, and all Defendants contest the scope of the alleged

conspiracy and the impact that it had on the class. Despite Chesapeake admitting to certain

communications and agreements for a handful of transactions, the remaining defendant, Mr. Ward,


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denied the same. Compare Dkt. 181 ¶¶ 4, 29–30 with Dkt. 182 ¶ 5. While the Plaintiffs contend

there is a broader conspiracy outside of the handful of transactions that Chesapeake has admitted

to, the Defendants deny this. And Defendants would almost certainly appeal any adverse finding

from the Court or jury. “[T]he presence of such doubt tips the balance in favor of settlement

because ‘settlement creates a certainty of some recovery, and eliminates doubt, meaning the

possibility of no recovery after long and expensive litigation.’” Childs v. Unified Life Ins. Co., 10-

CV-23-PJC, 2011 WL 6016486, at *13 (N.D. Okla. Dec. 2, 2011) (Cleary, Mag. J.) (quoting In re

Qwest Commc’ns Int’l, Inc., 625 F. Supp. 2d 1133, 1138 (D. Colo. 2009)). Overall, the risks

Plaintiffs face here remain significant and weigh in favor of settlement.

3. The Value of the Settlement Outweighs the Possibility of Future Relief

Assuming the settlement is given final approval, the common settlement fund will be a

cash payment of $6,950,000.00. See Settlement Agreement ¶ 24. If the litigation were to continue,

it would unquestionably be complex, expensive, and highly burdensome for both Plaintiffs and

Defendants. Plaintiffs would still face the monumental task of trudging through what is likely to

be a highly contentious merits discovery process, including additional expert discovery, summary

judgment briefing, and at the end of this process, a weeks if not months long trial, from which the

losing party will almost certainly appeal. Simply put, “[a]n antitrust class action is arguably the

most complex action to prosecute.” In re Motorsports Merch. Antitrust Litig., 112 F. Supp. 2d

1329, 1337 (N.D. Ga. 2000).

Defendants would have disputed the scope and impact of the alleged conspiracy, both in

opposing class certification and moving for summary judgment. The discovery process would

continue to be lengthy, expensive, and contentious. The parties efficiently settled the case before

the deadline for class certification and dispositive motions.


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By reaching a favorable settlement at this time, Plaintiffs seek to avoid significant expense

and delay, and instead ensure a favorable recovery for the class as soon as possible, and without

the need to incur millions of litigation expense and the uncertainty of a better recovery down the

road. “The class will be well compensated, relatively speaking, and is better off receiving

compensation now as opposed to being compensated, if at all, several years down the line, after

the matter is certified, tried, and all appeals are exhausted.” McNeely, 2008 WL 4816510, at *13.

Reaching a settlement now provides certainty in the amount of recovery for the Plaintiffs.

See Alvarado Partners, L.P. v. Mehta, 723 F. Supp. 540, 547 (D. Colo. 1989) (“It has been held

prudent to take ‘a bird in the hand instead of a prospective flock in the bush.’”) (quoting State of

W. Va. v. Chas. Pfizer & Co., 314 F. Supp. 710, 740 (S.D.N.Y. 1970)). Even if Plaintiffs were to

prevail on class certification, summary judgment, and trial—which would have been anything but

guaranteed given the factual and legal issues presented by the conduct at issue—post-verdict and

appellate litigation may have lasted for years. See Strougo v. Bassini, 258 F. Supp. 2d 254, 261

(S.D.N.Y. 2003) (“[t]he potential for this litigation to result in great expense and to continue for a

long time suggest that settlement is in the best interests of the Class”). This factor weighs in favor

of preliminary approval.

4. Counsel Recommends Settlement

Interim Counsel and an experienced mediator agree that this settlement is fair, reasonable,

and adequate. Burns Decl. ¶ 4. The counsel’s view of the settlement as fair and reasonable is

entitled to great weight. Wilkerson v. Martin Marietta Corp., 171 F.R.D. 273, 288 (D. Colo. 1997);

see In re Dep’t of Energy Stripper Well Exemption Litig., 653 F. Supp. 108, 116 (D. Kan. 1986),

aff’d, 855 F.2d 865 (Temp. Emer. Ct. App. 1988) (“Although the Court has independently

evaluated the proposed settlement, the professional judgment of counsel involved in the

litigation—who have made a determination that the settlement represents a fair allotment for their


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clients—is entitled to significant weight.”); see also. Mehta, 723 F. Supp. at 548 (“Courts have

consistently refused to substitute their business judgment for that of counsel and the parties.”).

Interim Counsel are experienced antitrust and class action litigators who at the time of the

settlement were extremely knowledgeable about the factual and legal issues in the case. They

worked steadfastly to prosecute the case, conducted substantial discovery, and engaged economic

experts who performed extensive analyses. Burns Decl. ¶ 3. Interim Counsel, along with their

experts, also reviewed extensive transactional information relating to the pricing of bonus and

royalty payments in the relevant area. Id. Plaintiffs received a detailed, full-day proffer from

Chesapeake regarding the misconduct at issue and also interviewed some of Chesapeake’s key

decision makers with knowledge of the core conduct at issue. Burns Decl. ¶ 4. Given these facts,

it is the judgment of Interim Counsel and Defendants’ Counsel that the settlement will be in the

best interests of the class.

Accordingly, Plaintiffs request that the Court certify the proposed class and preliminarily

approve the settlement.

F. The Proposed Notice and Plan of Dissemination Meets the Strictures of Rule 23

Rule 23(c)(2)(B) provides that class members must receive the “best notice that is

practicable under the circumstances, including individual notice to all members who can be

identified through reasonable efforts.” Moreover, Rule 23(e)(1) requires a court to “direct notice

in a reasonable manner to all class members who would be bound by the propos[ed] [settlement].”

Plaintiffs propose the same notice here that this Court already approved for the prior settlements.

The Proposed Notice here meets these requirements. The proposed form of notice defines

the Class, describes the allegations and pertinent procedural history of this class action, outlines

the terms of the proposed settlement, provides notice of the fairness hearing and how to object to


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the proposed settlement, and explains how Class members may obtain additional information,

including a copy of the settlement agreement. See Burns Decl. Exhibit 2.

The Claims Administrator, KCC LLC, will be responsible for providing notice to potential

class members consistent with Rule 23(c)(2)(B). The Claims Administrator will send mailed notice

where practical. Burns Decl. Exhibit 4. To ensure that the class receives notice of the settlement,

KCC will also advertise the notice in newspapers circulated throughout the Mississippi Lime Play

and issue press releases in Kansas and Oklahoma. Id. Finally, the detailed notice will be available

on the website, www.anadarkosettlement.com, along with relevant case documents such as the

complaint and settlement agreement itself. Id.

Accordingly, Class Counsel respectfully request that the Court approve the form and plan

of dissemination of notice.

G. Proposed Schedule for Final Approval and Dissemination of Notice

Below is a proposed schedule for providing notice, filing objections, and holding a fairness

hearing:

Event Schedule Deadline to send notice to class members 35 days after Preliminary Approval Order Deadline to commence Publication Notice in newspapers and online

45 days after Preliminary Approval Order

Settlement Administrator to file proof of notice 65 days after Preliminary Approval Order Deadline to request exclusion from the Class or objections to Settlement

90 days after Preliminary Approval Order

Deadline for Class Counsel to move for Final Approval and Fee and Cost award

21 days before Final Approval Hearing

Final Approval and Fee and Cost Award Reply Briefs

7 days before Final Approval Hearing

Final Approval Hearing

V. CONCLUSION

Plaintiffs respectfully request that the Court enter an order in which the Court: (1) appoints

Settlement Class Counsel for settlement purposes; (2) finds that the prerequisites for a class action


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have been satisfied and certifies the proposed settlement class for settlement purposes; (3) grants

the Plaintiffs’ Motion for Preliminary Approval of the Settlement; (4) approves the form and

manner of providing Notice of the Settlement to the Settlement Class and directs that Notice be

disseminated according to the proposed timetable; (5) issues a stay of all proceedings against

Defendants except those proceedings provided for or required by the Settlement Agreement; and

(6) sets a hearing date for final approval of the settlement.


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Dated: September 5, 2018

/s/ Warren T. Burns Warren T. Burns Daniel H. Charest Will Thompson BURNS CHAREST LLP 900 Jackson Street, Suite 500 Dallas, Texas 75202 Tel: (469) 904-4550 [email protected] [email protected] [email protected] /s/ Terrell W. Oxford Terrell W. Oxford Shawn Raymond SUSMAN GODFREY LLP 1000 Louisiana, Suite 5100 Houston, Texas 77002-5096 Tel: (713) 651-9366 [email protected] William C. Carmody Arun Subramanian SUSMAN GODFREY LLP 560 Lexington Avenue, 5th Floor New York, NY 1002-6828 Tel: (212) 336-8330 [email protected] [email protected]

/s/ Christopher J. Cormier Christopher J. Cormier COHEN MILSTEIN SELLERS & TOLL, PLLC 5290 Denver Tech Center Parkway Greenwood Village, Colorado 80111 Tel: (720) 630-2092 [email protected] Richard A. Koffman Robert W. Cobbs COHEN MILSTEIN SELLERS & TOLL, PLLC 1100 New York Avenue, NW, Suite 500 Washington, D.C. 20005 Tel: (202) 408-4600 [email protected] [email protected] /s/ Todd M. Schneider Todd M. Schneider Jason Kim Kyle G. Bates SCHNEIDER WALLACE COTTRELL KONECKY WOTKYNS, LLP 2000 Powell Street, Suite 1400 Emeryville, California 94608 Tel: (415) 421-7100 [email protected] [email protected] [email protected]

Interim Co-Lead Counsel for the Proposed Class /s/ Larry D. Lahman

Larry D. Lahman Michael E. Kelly Carol Hambrick Lahman MITCHELL DECLERCK 202 West Broadway Avenue Enid, Oklahoma 73701 Tel: (800) 287-5144 Fax: (580) 234-8890

Interim Liason Counsel for the Proposed Class


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CERTIFICATE OF SERVICE

This is to certify that a true and correct copy of the foregoing document was duly served

electronically on all known counsel of record through the Court’s Electronic Filing System on

September 5, 2018.

By: /s/ Warren Burns Warren Burns


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