18th Annual Workplace Class Action Report - 2022 Edition

518 Annual Workplace Class Action Litigation Report: 2022 Edition Protection Act (“WVCCPA”). The parties ultimately settled the matter and the Court granted final settlement approval of claims “for improper royalty payments, improper deductions, improper measurement, improper accounting for natural gas liquids, improper sales prices, breach of lease agreements, breach of fiduciary duty, fraud, violation of the WVCCPA. violation of the flat rate royalty statute and punitive damages, all based upon the failure to pay proper royalty.” Id . at *5-6. The Court further ordered that the final settlement agreement was the exclusive remedy for the class and barred all further claims stemming from the settlement period regarding the royal payments. Subsequently, the "Huey Plaintiffs," a group of members of the class action, filed a separate state court class action against Defendant alleging that it trespassed on their mineral estate. Defendant thereafter filed a motion to enforce the settlement agreement, arguing that the trespass claim was essentially royalty claim that was released by the terms of the agreement in this case. The Court denied the motion. The Court found that the Huey Plaintiffs’ claims were not related to the claims in the original litigation, as they did not involve whether or not Defendant paid proper royalties. The Court explained that the issue in the Huey Plaintiffs’ case was whether or not the lease agreement between the parties was terminated by the non-production of certain wells, after which Defendant allegedly trespassed on the estates and utilized the wells. Thus, the Court reasoned that the trespass claim was not a royalty claim, as it was not released by judgment in the settlement agreement. Accordingly, the Court denied Defendant’s motion. (xxv) The Colorado River Doctrine In Class Actions Russo, et al. v. Eastwood Construction Partners, 2021 U.S. Dist. LEXIS 25119 (D.S.C. March 18, 2021). Plaintiffs, a group of homeowners, brought a putative class action alleging claims of negligence , breach of implied warranties, and unfair trade practices under the South Carolina Unfair Trade Practices Act relative to the construction of Plaintiffs’ roofs. Plaintiffs filed their class action in state court, and Defendant then removed the action pursuant to the Class Action Fairness Act (“CAFA”). Thereafter, Plaintiffs moved to remand the matter to state court on the basis that the lawsuit did not fall within the CAFA’s jurisdiction. The Court abstained from exercising jurisdiction over the action pursuant to Colorado River Water Conservation Dist. v. United States, 424 U.S. 800 (1976), and dismissed the lawsuit. The Court pointed out that in order for it to have jurisdiction over the action pursuant to the CAFA, Defendants must demonstrate that there had been a similar class action filed against similar Defendants within the last three years. As such, Defendant stated in its notice of removal that it had been the subject of a similar putative class action within the last three years. One month later, Plaintiffs filed their motion to remand, arguing that the Court did not have jurisdiction under the CAFA because, among other reasons, no similar class actions have been filed within the last three years. Defendant disagreed and explained that Plaintiffs’ counsel, one day prior to filing the instant action, filed a duplicate class action with the same allegations, same claims, and on behalf of the exact same class in Smiley v. Exterior Contract Services , No. 2020-CP-10-03786 (Charleston County Court of Common Pleas August 26, 2020) (“ Smiley ”). The only difference between Smiley and this action was that Defendant was named as a Defendant in this action but not in Smiley . In its reply, Plaintiffs agreed that Smiley was a duplicate of this action. Further, Plaintiffs’ counsel conceded that the filing of two duplicative actions was nothing more than an act of strategic procedural gamesmanship. In dismissing the action, the Court looked to the Supreme Court jurisprudence espoused in Colorado River , which determined that a Court may abstain from exercising jurisdiction over an action otherwise properly before it due to the presence of a concurrent state proceeding for reasons of wise judicial administration, giving regard to conservation of judicial resources and comprehensive disposition of litigation. Based on the record before it, the Court found that a consideration of all of the relevant factors weighed in favor of abstention. In particular, the Court noted that both parties agreed that the two lawsuits were not just similar but were duplicative. Further, the minor distinctions that developed between the proceedings since their filings created a substantial threat of piecemeal litigation, thereby undercutting the federal policy behind the Colorado River doctrine. Additionally, the Court pointed out that Plaintiffs’ counsel filed Smiley first, and the identical claims in both actions involved purely state law claims. The Court further found that Plaintiffs’ filing of this suit was nothing more than a strategic ploy, and Defendants’ removal thereof was little more than procedural fencing. Finally, the Court determined that no rights would be significantly prejudiced by abstention, for the claims and defenses of all parties remained in the hands of the Charleston County Court of Common Pleas. In short, the Court determined that the action would not exist but for the procedural maneuverings of the parties. For these reasons, the Court declined to exercise jurisdiction over the matter and dismissed the lawsuit.