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
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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
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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
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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
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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
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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
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(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
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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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26
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
Case 5:16-cv-00209-HE Document 220 Filed 09/05/18 Page 34 of 35
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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
Case 5:16-cv-00209-HE Document 220 Filed 09/05/18 Page 35 of 35
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