Class Action

BP Class Action Defense Cases-Rees v. BP America: Oklahoma State Court Affirms Dismissal Of Class Action Complaint Holding Plaintiff's Class Action Barred Because He Was Absent Class Member Of Prior Class Action

By Michael J. Hassen

Trial Court Order Denying Class Action Certification Barred Subsequent Class Action Filed by Absent Class Member of Prior Class Action Oklahoma State Court Holds, Otherwise “Plaintiffs [could] Continue Filing Broad Class Actions…Until a Trial Court Grants Class Certification, Rendering Ineffective the Previous Denials of Other Courts”

Plaintiff filed a putative class action in Oklahoma state court (LeFlore County) against BP America alleging “BP underpaid royalties by wrongfully charging marketing fees and costs of making the gas marketable, including costs for gathering, treatment, compression, and dehydration, to royalty owners.” Rees v. BP America Prod. Co., ___ F. 3d ___ (Okla.App. February 22, 2008) [Slip Opn., at 2]. The complaint purported to be a class action, brought on behalf of “all similarly situated persons and entities who have received royalty payments from [BP] on Gas Substances produced from the Red Oak-Norris Field.” Id. Defense attorneys moved to dismiss the class action on the ground that two other class actions were pending against BP alleging underpaid royalties (Watts and Chockley); alternatively, defense attorneys requested that the Rees class action litigation be stayed or transferred to the county in which the Watts class action was pending (Pittsburg County). Id. The basis for the defense motion was that the Watts class action purported to represent a class of royalty owners in several counties, including LeFlore, id., at 2-3. The Chockley class action also was defined broadly enough to arguably include plaintiff’s claims within its scope, id., at 3.

The plaintiffs in the Watts class action had moved the court to certify that litigation as a class action, but the trial court denied the motion. Rees, at 3. The Oklahoma Court of Civil Appeals affirmed the denial of class action treatment, and the Oklahoma Supreme Court denied certiorari. Id., at 3-4. The trial court in the Rees class action granted a stay, over plaintiff’s objection, pending the appellate court decision in Watts, id., at 3, and then granted BP’s motion to dismiss the Rees complaint, id., at 4. Specifically, “the trial court applied the principle of issue preclusion in ruling Rees, as an unnamed member of the proposed class in Watts, was bound by the decision in Watts denying class action certification.” Id. (citing In re Bridgestone/Firestone, Inc., Tires Products Liab. Litig., 333 F.3d 763 (7th Cir. 2003)).

Full post as published by Class Action Defense Blog on March 04, 2008 (boomark / email).