Romeo v. Antero Resources Corporation

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF WEST VIRGINIA

JACKLIN ROMEO,

Individually and on behalf

of others similarly situated;

SUSAN S. RINE,

Individually and on behalf

of others similarly situated;

DEBRA SNYDER MILLER,

Individually and on behalf

of others similarly situated,

Plaintiffs,

v. CIVIL ACTION NO. 1:17CV88

(Judge Keeley)

ANTERO RESOURCES CORP.,

Defendant.

MEMORANDUM OPINION AND ORDER GRANTING-IN-

PART AND DENYING-IN-PART THE PLAINTIFFS’ MOTION

FOR AN ORDER APPROVING THE CLASS NOTICE TO BE SENT

TO ADDITIONAL CLASS MEMBERS, APPROVING THE NOTICE TO BE

SENT, AND SETTING A NEW DEADLINE FOR THOSE CLASS MEMBERS

TO REQUEST EXCLUSION FROM THE CERTIFIED CLASS [DKT. NO. 342]

In this breach of contract class action, the plaintiffs,

Jacklin Romeo (“Romeo”), Susan S. Rine (“Rine”), and Debra Snyder

Miller (“Miller”) (collectively, “the Plaintiffs”), individually

and on behalf of others similarly situated, allege that the

defendant, Antero Resources Corporation (“Antero”), breached its

obligations under the royalty provisions of two types of lease

agreements by improperly deducting post-production costs and

failing to pay royalties based upon the price received at the point

of sale (Dkt. No. 31).

MEMORANDUM OPINION AND ORDER GRANTING-IN-

PART AND DENYING-IN-PART THE PLAINTIFFS’ MOTION

FOR AN ORDER APPROVING THE CLASS NOTICE TO BE SENT

TO ADDITIONAL CLASS MEMBERS, APPROVING THE NOTICE TO BE

SENT, AND SETTING A NEW DEADLINE FOR THOSE CLASS MEMBERS

TO REQUEST EXCLUSION FROM THE CERTIFIED CLASS [DKT. NO. 342]

Pending is the Plaintiffs’ motion to approve sending the Class

Notice to additional class members (Dkt. No. 342). For the reasons

discussed, the Court GRANTS-IN-PART and DENIES-IN-PART the motion.

I. BACKGROUND

A. Factual Background

Each of the Plaintiffs alleges ownership of an oil and gas

interest in Harrison County, West Virginia, subject to an existing

oil and gas lease under which the lessee’s interest has been

assigned to Antero (Dkt. No. 31 at 2).

Romeo is the assignee of a portion of the lessors’ interest

under a March 14, 1984 lease agreement between lessors Jessie J.

Nixon, Betty Nixon, Mary Alice Vincent, and Hubert L. Vincent, and

lessee Clarence W. Mutschelknaus (“the Mutschelknaus Lease”). Id.

at 6. Antero acquired the lessee’s rights and obligations sometime

prior to January 1, 2009. The royalty provision of the

Mutschelknaus Lease contains the following language:

In consideration of the premises, the said [Lessee]

covenants and agrees: First, to deliver monthly to the

credit of the Lessors, their heirs or assigns, free of

costs, in a pipeline, to which Lessee may connect its

wells, Lessors’ proportionate share of the equal one-

eighth (1/8) part of all oil produced and saved from the

leased premises; and second, to pay monthly Lessor’s

proportionate share of the one-eighth (1/8) of the value

at the well of the gas from each and every gas well

MEMORANDUM OPINION AND ORDER GRANTING-IN-

PART AND DENYING-IN-PART THE PLAINTIFFS’ MOTION

FOR AN ORDER APPROVING THE CLASS NOTICE TO BE SENT

TO ADDITIONAL CLASS MEMBERS, APPROVING THE NOTICE TO BE

SENT, AND SETTING A NEW DEADLINE FOR THOSE CLASS MEMBERS

TO REQUEST EXCLUSION FROM THE CERTIFIED CLASS [DKT. NO. 342]

drilled on said premises, the product from which is

marketed and used off the premises, said gas to be

measured at a meter set on the farm, and to pay monthly

Lessors’ proportionate share of the one-eighth (1/8) of

the net value at the factory of the gasoline and other

gasoline products manufactured from casinghead gas.

Id.

Rine and Miller are assignees of portions of the lessors’

interest under an October 19, 1979 lease between lessors Lee H.

Snyder, and Olive W. Snyder, and lessee Robert L. Matthey, Jr.

(“the Matthey Lease”). Id. at 6-7. Antero was assigned the lessee’s

interest sometime prior to July 17, 2012. Id. at 7-8. The royalty

provision of the Matthey Lease contains the following language:

(a) Lessee covenants and agrees to deliver to the

credit of the Lessor, his heirs or assigns, free of cost,

in the pipe line to which said Lessee may connect its

wells, a royalty of one-eighth (1/8) of native oil

produced and saved from the leased premises.

(b) Lessee covenants and agrees to pay Lessor as

royalty for the native gas from each and every well

drilled on said premises producing native gas, an amount

equal to one-eighth (1/8) of the gross proceeds received

from the sale of the same at the prevailing price for

gas sold at the well, for all native gas saved and

marketed from the said premises, payable quarterly.

Id. at 8-9.

On May 15, 2017, the Plaintiffs filed a class action complaint

asserting a breach of contract claim related to Antero’s alleged

MEMORANDUM OPINION AND ORDER GRANTING-IN-

PART AND DENYING-IN-PART THE PLAINTIFFS’ MOTION

FOR AN ORDER APPROVING THE CLASS NOTICE TO BE SENT

TO ADDITIONAL CLASS MEMBERS, APPROVING THE NOTICE TO BE

SENT, AND SETTING A NEW DEADLINE FOR THOSE CLASS MEMBERS

TO REQUEST EXCLUSION FROM THE CERTIFIED CLASS [DKT. NO. 342]

failure to pay them a full 1/8th royalty payment for their natural

gas interests. Gas produced under the leases at issue (the “Class

Leases”) consists of “wet gas” (saturated with liquid hydrocarbons

and water) that may be processed to obtain marketable “residue

gas.” This wet gas also contains valuable liquid hydrocarbon

components (ethane, butane, isobutane, propane, and natural gas)

(“NGLs”) that may be extracted and fractionated prior to sale.

The Plaintiffs contend that, because neither of the Class

Leases royalty provisions expressly permits post-production

deductions, West Virginia law imposes a duty upon Antero to

calculate royalties based on the price it receives from third

parties for the residue gas and NGLs without deductions. They

assert that despite this duty Antero has deducted various post-

production costs for residue gas and NGLs from their royalties.

B. Relevant Procedural History

After Antero produced 394 redacted leases that potentially

met the Class definition, the Plaintiffs moved to certify this

case as a class action (Dkt. Nos. 100, 212 at 14-15). To establish

that their proposed class met the numerosity requirement of Federal

Rule of Civil Procedure 23, they attached a list of 268 leases

MEMORANDUM OPINION AND ORDER GRANTING-IN-

PART AND DENYING-IN-PART THE PLAINTIFFS’ MOTION

FOR AN ORDER APPROVING THE CLASS NOTICE TO BE SENT

TO ADDITIONAL CLASS MEMBERS, APPROVING THE NOTICE TO BE

SENT, AND SETTING A NEW DEADLINE FOR THOSE CLASS MEMBERS

TO REQUEST EXCLUSION FROM THE CERTIFIED CLASS [DKT. NO. 342]

meeting the Class definition (“the Plaintiffs’ lease schedule”)

(Dkt. No. 101-2).

On March 23, 2020, pursuant to Federal Rule of Civil Procedure

23(b)(3), the Court entered a Class Certification Order, which

defined the following Class:

Persons and entities, including their respective

successors and assigns, to whom Antero has paid

royalties (“Royalties”) on Natural Gas, including

natural gas liquids, produced by Antero from wells

located in West Virginia at any time since January 1,

2009, pursuant to Leases which contain either of the

following gas royalty provisions: (a) [Lessee] covenants

and agrees “to pay monthly Lessors’ proportionate share

of the one-eighth (1/8) of the value at the well of the

gas from each and every gas well drilled on said

premises, the product from which is marketed and used

off the premises, said gas to be measured at a meter set

on the farm”; or (b) “Lessee covenants and agrees to pay

Lessor as royalty for the native gas from each and every

well drilled on said premised producing native gas, as

amount equal to one-eighth (1/8) of the gross proceeds

received from the sale of the same at the prevailing

price for gas sold at the well, for all native gas saved

and marketed from the said premises, payable quarterly.”

The Class excludes: (1) agencies, departments, or

instrumentalities of the United State of America; (2)

publicly traded oil and gas exploration companies; (3)

any person who is or has been a working interest owner

in a well produced by Antero in West Virginia; and (4)

Antero.

(Dkt. No. 152 at 42-43).

MEMORANDUM OPINION AND ORDER GRANTING-IN-

PART AND DENYING-IN-PART THE PLAINTIFFS’ MOTION

FOR AN ORDER APPROVING THE CLASS NOTICE TO BE SENT

TO ADDITIONAL CLASS MEMBERS, APPROVING THE NOTICE TO BE

SENT, AND SETTING A NEW DEADLINE FOR THOSE CLASS MEMBERS

TO REQUEST EXCLUSION FROM THE CERTIFIED CLASS [DKT. NO. 342]

On April 1, 2020, the Plaintiffs moved to compel Antero to

produce any lease meeting the Class definition (Dkt. No. 155).

Based on Antero’s interlocutory appeal of its Class Certification

Order, however, the Court denied the Plaintiffs’ motion without

prejudice (Dkt. No. 170). After the Fourth Circuit denied its

appeal, Antero moved to amend the Class Certification Order, which

the Court denied (Dkt. Nos. 171; 173; 176-1; 195).

Antero subsequently reviewed the 394 leases it had previously

produced, determined that 283 of those leases met the Class

definition and, on May 15, 2020, provided unredacted copies of

those leases to the Plaintiffs (Dkt. Nos. 212 at 15; 342-1 at 1-

2). But it excluded from its production the remaining 111 lease

which, in its view, did not satisfy the Class definition or were

otherwise removed from the Class (Dkt. No. 342-1 at 2).

The Plaintiffs renewed their motion to compel Antero to

produce any lease meeting the Class definition (Dkt. No. 179).

Upon referral, Magistrate Judge Aloi denied the Plaintiffs’

motion, but ordered Antero to submit an affidavit from a witness

with knowledge outlining the reasons why the disputed leases were

MEMORANDUM OPINION AND ORDER GRANTING-IN-

PART AND DENYING-IN-PART THE PLAINTIFFS’ MOTION

FOR AN ORDER APPROVING THE CLASS NOTICE TO BE SENT

TO ADDITIONAL CLASS MEMBERS, APPROVING THE NOTICE TO BE

SENT, AND SETTING A NEW DEADLINE FOR THOSE CLASS MEMBERS

TO REQUEST EXCLUSION FROM THE CERTIFIED CLASS [DKT. NO. 342]

not part of the Class. He also ordered Antero to make that witness

available for a deposition (Dkt. No. 215 at 9).1

On June 26, 2020, Antero produced an additional 165 leases

meeting the Class definition but still did not include any of the

111 disputed leases. Id. Following approval of the Class Notice

and the Class Notice administrator, the Class Notice administrator

mailed that notice to 1,047 Class Members on July 30, 2020 (Dkt.

No. 233-1 at 1-2).

On August 28, 2020, the Plaintiffs filed a second motion to

compel (Dkt. No. 251), seeking information related to the 111

excluded leases in the following categories: (1) the “Removed”

leases which the Plaintiffs did not include in the lease schedule

attached to their class certification motion; (2) the “No Payee”

leases for which Antero has been unable to identify a proper

royalty payee; and (3) the “No Payment” leases involving 143 payees

to whom Antero has made no payment (Dkt. No. 288 at 6). Magistrate

Judge Aloi granted part of this motion and ordered Antero to

1 After Antero provided the Affidavit of Alvyn Schopp (“Schopp”),

its Chief Administrative Officer and Regional Senior Vice

President, the Plaintiffs deposed him on July 30, 2020 (Dkt. No.

251 at 6).

MEMORANDUM OPINION AND ORDER GRANTING-IN-

PART AND DENYING-IN-PART THE PLAINTIFFS’ MOTION

FOR AN ORDER APPROVING THE CLASS NOTICE TO BE SENT

TO ADDITIONAL CLASS MEMBERS, APPROVING THE NOTICE TO BE

SENT, AND SETTING A NEW DEADLINE FOR THOSE CLASS MEMBERS

TO REQUEST EXCLUSION FROM THE CERTIFIED CLASS [DKT. NO. 342]

produce unredacted copies of all 111 disputed leases (Dkt. No. 288

at 11-12).

II. DISCUSSION

The Plaintiffs now seek an order declaring that the 111 leases

identified as the Removed leases, the No Payee leases, and the No

Payment leases are part of the Class (Dkt. No. 342 at 1). They

also seek authorization to send the Class Notice to the 3 payees

that receive royalties under the Removed leases and the 175 payees

associated with the No Payee and the No Payment leases. Id. at 2.

Antero contends the Plaintiffs are impermissibly attempting

to redefine the Class (Dkt. No. 345). It asserts that royalty

payees under the Removed leases are not Class Members because the

Plaintiffs themselves omitted those leases from the schedule

attached to their motion for class certification. Id. at 1, 13-

14. It also asserts that, because Antero holds their interests in

suspense, the royalty payees under the No Payee or No Payment

leases are not Class Members “to whom Antero has paid royalties.”

Id. at 1, 8-12.

A. Applicable Law

Federal Rule of Civil Procedure 23 provides that, after

determining that a class should be certified, the court must, by

MEMORANDUM OPINION AND ORDER GRANTING-IN-

PART AND DENYING-IN-PART THE PLAINTIFFS’ MOTION

FOR AN ORDER APPROVING THE CLASS NOTICE TO BE SENT

TO ADDITIONAL CLASS MEMBERS, APPROVING THE NOTICE TO BE

SENT, AND SETTING A NEW DEADLINE FOR THOSE CLASS MEMBERS

TO REQUEST EXCLUSION FROM THE CERTIFIED CLASS [DKT. NO. 342]

order, “define the class and the class claims, issues, or

defenses.” Fed. R. Civ. Pro. 23(c)(1)(A)–(B). However, the court

may alter or amend the class certification order before final

judgment. Fed. R. Civ. Pro. 23(c)(1)(C). The court also retains

discretion to issue orders to “giv[e] appropriate notice to some

or all class members . . . of their opportunity to come into the

action” or “deal with similar procedural matters.” Fed. R. Civ.

Pro. 23(d)(1).

The Court issued its Class Certification Order on March 23,

2020 (Dkt. No. 152). The Plaintiffs now seek “an Order finding

that certain categories of royalty owner payees excluded by . . .

Antero . . . should be found to be included in the Class and

receive the class certification notice” (Dkt. No. 248 at 1). They

contend that, pursuant to Rule 23(d), the Court retains discretion

to clarify the Class definition on this point (Dkt. No. 342 at 8

(citing NEWBERG ON CLASS ACTIONS § 7:28)). Antero, on the other hand,

contends the Plaintiffs are really seeking to expand the Class

definition, which would require a wholesale reanalysis of the class

action prerequisites in Rule 23(a) (Dkt. No. 345 at 7).

To resolve this dispute, the Court first must determine

whether the Plaintiffs actually seek to expand the Class

MEMORANDUM OPINION AND ORDER GRANTING-IN-

PART AND DENYING-IN-PART THE PLAINTIFFS’ MOTION

FOR AN ORDER APPROVING THE CLASS NOTICE TO BE SENT

TO ADDITIONAL CLASS MEMBERS, APPROVING THE NOTICE TO BE

SENT, AND SETTING A NEW DEADLINE FOR THOSE CLASS MEMBERS

TO REQUEST EXCLUSION FROM THE CERTIFIED CLASS [DKT. NO. 342]

definition. The Plaintiffs claim they seek only to clarify whether

the payees entitled to receive royalties under the three (3)

categories of leases at issue are Class Members who must receive

the Class Notice. Specifically, they seek (1) a determination that

the Removed leases are included in the Class, and (2) a resolution

of the parties’ conflicting interpretations of the phrase “to whom

Antero has paid royalties.”

The record reflects that the parties have always anticipated

additional Class Members might be identified and that a

supplemental Class Notice may be necessary (Dkt. No. 234 at 26-

32). Indeed, on July 9, 2020, they agreed to send an initial Class

Notice to then-identified Class Members and to supplement that

notice if they identified additional Class Members. Id. In light

of that, the Court requested that they advise it of any need for

a subsequent mailing. Id. at 32. That is precisely what the

Plaintiffs have now done.

After considering the parties’ arguments, the Court is

convinced the Plaintiffs seek only to clarify the Class definition,

and consequently turns its attention to determining whether the

three (3) disputed categories of leases and their royalty payees

fall within the scope of that definition. If they do, the Court

MEMORANDUM OPINION AND ORDER GRANTING-IN-

PART AND DENYING-IN-PART THE PLAINTIFFS’ MOTION

FOR AN ORDER APPROVING THE CLASS NOTICE TO BE SENT

TO ADDITIONAL CLASS MEMBERS, APPROVING THE NOTICE TO BE

SENT, AND SETTING A NEW DEADLINE FOR THOSE CLASS MEMBERS

TO REQUEST EXCLUSION FROM THE CERTIFIED CLASS [DKT. NO. 342]

may enter an Order giving the Class Members “appropriate notice .

. . of their opportunity to come into the action.” Fed. R. Civ.

Pro. 23(d)(1).

B. Removed leases

It is undisputed that the Removed leases contain one of the

Class Lease royalty provisions. But because the Plaintiffs did not

include these leases on the schedule supporting their class

certification motion, Antero claims they are beyond the Court’s

consideration (Dkt. No. 345 at 13). The Court disagrees.

At the May 11, 2020 hearing on Antero’s motion to amend the

Class Certification Order, Antero sought to limit the scope of the

Class to those leases previously disclosed (Dkt. No. 198 at 20).

The Plaintiffs opposed any such limitation, arguing that the Class

must include “all of the leases that have the [Class Lease royalty

provisions], so that there can be complete relief to persons who

are paid under th[ose] royalty provision[s].” Id. at 25. The Court

agreed, stating:

The class definition, as certified, does not mention any

particular lease by name, but it talks only about the

language in the lease . . . Antero has to produce leases

that contain the lease language of either [Class Lease

royalty provision] . . . I understand why [Antero is]

concerned about an expansion beyond the original number

MEMORANDUM OPINION AND ORDER GRANTING-IN-

PART AND DENYING-IN-PART THE PLAINTIFFS’ MOTION

FOR AN ORDER APPROVING THE CLASS NOTICE TO BE SENT

TO ADDITIONAL CLASS MEMBERS, APPROVING THE NOTICE TO BE

SENT, AND SETTING A NEW DEADLINE FOR THOSE CLASS MEMBERS

TO REQUEST EXCLUSION FROM THE CERTIFIED CLASS [DKT. NO. 342]

of leases, but it has to include the leases that have

either [Class Lease royalty provision].

Id. at 27.

Thus, the Class definition is not limited solely to either

the leases produced by Antero in class certification discovery or

those included by the Plaintiffs on their lease schedule, but also

includes any lease containing either of the Class Lease royalty

provisions. Because the payees under the Removed leases have

received royalties from Antero since January 1, 2009 pursuant to

leases containing the Class Lease royalty provisions, they are

Class Members.

Antero’s next argument, that the Plaintiffs have judicially

admitted that the Removed leases are “outside of the scope of the

class definition,” is unavailing (Dkt. No. 345 at 14). A “judicial

admission” is a representation that “unless allowed by the court

to be withdrawn, is conclusive in the case.” Meyer v. Berkshire

Life Ins. Co., 372 F.3d 261, 264 (4th Cir. 2004) (citing Keller v.

United States, 58 F.3d 1194, 1199 n. 8 (7th Cir. 1995)). To qualify

as a judicial admission, an attorney's statement must be

“deliberate, clear and unambiguous.” Meyer, 372 F.3d at 265 (citing

MacDonald v. Gen. Motors Corp., 110 F.3d 337, 340 (6th Cir. 1997)).

MEMORANDUM OPINION AND ORDER GRANTING-IN-

PART AND DENYING-IN-PART THE PLAINTIFFS’ MOTION

FOR AN ORDER APPROVING THE CLASS NOTICE TO BE SENT

TO ADDITIONAL CLASS MEMBERS, APPROVING THE NOTICE TO BE

SENT, AND SETTING A NEW DEADLINE FOR THOSE CLASS MEMBERS

TO REQUEST EXCLUSION FROM THE CERTIFIED CLASS [DKT. NO. 342]

According to Antero, the Plaintiffs admitted that the Removed

leases are not part of the Class when they omitted them from their

lease schedule and stated the following in support of their motion

for class certification:

Attached as Exhibit 3] is a list of 368 Leases which

meet the above-referenced Class definition.1

. . .

[FN 1] – [Plaintiffs’ lease schedule] does not include

certain leases which have been produced by Antero in

this litigation, but which, due to the gas royalty

provision itself, a modification of the royalty

provision, or an addendum to the royalty provision, are

outside the scope of the Class definition. All but one

of the Leases identified in Exhibit 3 is a Lease produced

by Antero in this litigation. If Plaintiffs’ attorneys

discover additional Leases which meet the Class

definition, the list of Class Leases will be

supplemented.

(Dkt. No. 100-1 at 3 n.1).

This statement, however, does not deliberately, clearly, or

unambiguously state that any lease containing the Class Lease

royalty provisions produced prior to the Class being certified2

but not included on the Plaintiffs’ lease schedule is excluded

from the Class. Notably, the Plaintiffs specifically reserved the

2 The Plaintiffs assert that the Removed leases were not included

in their lease schedule because Antero did not produce them until

the day they moved for class certification, at the earliest (Dkt.

No. 348 at 4-5).

MEMORANDUM OPINION AND ORDER GRANTING-IN-

PART AND DENYING-IN-PART THE PLAINTIFFS’ MOTION

FOR AN ORDER APPROVING THE CLASS NOTICE TO BE SENT

TO ADDITIONAL CLASS MEMBERS, APPROVING THE NOTICE TO BE

SENT, AND SETTING A NEW DEADLINE FOR THOSE CLASS MEMBERS

TO REQUEST EXCLUSION FROM THE CERTIFIED CLASS [DKT. NO. 342]

right to supplement their list of leases meeting the Class

definition. Furthermore, they did not intend that lease schedule

to be an exhaustive list of leases meeting the Class definition,

but rather as evidence that their proposed class met the numerosity

requirement of Rule 23(a).3 Thus, in the Court’s opinion, the

omission of these leases from the Plaintiffs’ lease schedule does

not constitute a judicial admission that they do not meet the Class

definition.

Because each of the Removed leases contains one of the Class

Lease royalty provisions and the Plaintiffs are not barred from

arguing that they are part of the Class, the Court concludes that

these leases meet the Class definition and that the corresponding

royalty payees are Class Members.

C. No Payee and No Payment Leases

It is also undisputed that the No Payee and No Payment leases

contain one of the Class Lease royalty provisions and that Antero

calculates royalties owed under those leases in the same manner as

it calculates royalties owed under the Class Leases. Whether these

leases are part of the Class therefore depends on the impact, if

3 As a prerequisite to class certification, Federal Rule of Civil

Procedure 23(a)(1) requires that the proposed class be “so numerous

that joinder of all members is impracticable.”

MEMORANDUM OPINION AND ORDER GRANTING-IN-

PART AND DENYING-IN-PART THE PLAINTIFFS’ MOTION

FOR AN ORDER APPROVING THE CLASS NOTICE TO BE SENT

TO ADDITIONAL CLASS MEMBERS, APPROVING THE NOTICE TO BE

SENT, AND SETTING A NEW DEADLINE FOR THOSE CLASS MEMBERS

TO REQUEST EXCLUSION FROM THE CERTIFIED CLASS [DKT. NO. 342]

any, of Antero’s use of suspense accounts to hold payments rather

than transfer royalties directly to a payee. The Plaintiffs contend

that, regardless of Antero’s use of suspense accounts, the 40 No

Payee leases and an unknown number of No Payment leases4 impacting

143 royalty payees are part of the Class. Conversely, Antero argues

that including these leases within the scope of the Class

definition would render the Class unascertainable. It also asserts

that these leases do not meet the Class definition because payees

under these leases have not received a payment from Antero.

The Fourth Circuit has “repeatedly recognized that Rule 23

contains an implicit threshold requirement that the members of a

proposed class be ‘readily identifiable.’” EQT Prod. Co. v. Adair,

764 F.3d 347, 358 (4th Cir. 2014) (citations omitted). This has

regularly been described as an “ascertainability requirement.” Id.

However phrased, the requirement is the same. A class

cannot be certified unless a court can readily identify

the class members in reference to objective criteria .

. . The plaintiffs need not be able to identify every

class member at the time of certification. But if class

members are impossible to identify without extensive and

individualized fact-finding or mini-trials, then a class

action is inappropriate.

4 The number of No Payment leases is uncertain because, although

Antero identified 143 payees that have not been paid, there may be

more than one payee per lease.

MEMORANDUM OPINION AND ORDER GRANTING-IN-

PART AND DENYING-IN-PART THE PLAINTIFFS’ MOTION

FOR AN ORDER APPROVING THE CLASS NOTICE TO BE SENT

TO ADDITIONAL CLASS MEMBERS, APPROVING THE NOTICE TO BE

SENT, AND SETTING A NEW DEADLINE FOR THOSE CLASS MEMBERS

TO REQUEST EXCLUSION FROM THE CERTIFIED CLASS [DKT. NO. 342]

Id. (cleaned up) (citations omitted).

At bottom, then, even if Antero may readily identify the No

Payee and No Payment leases and accounts from its recordkeeping,

it cannot as easily identify the proper owners of the funds held

in suspense. Indeed, it holds funds in suspense for “various

reasons, including but not limited to instances in which tittle

issues cast doubt on a person’s or entity’s right to royalties or

an owner cannot be found or identified” (Dkt. No. 345 at 11).5

Because ownership of these accounts is disputed or unknown,

discovery of the proper owner’s identity may require extensive

individualized inquiry. Therefore, it appears that the implicit

ascertainability requirement of Rule 23 would not be satisfied if

the No Payee and No Payment leases were included in the Class.

And even if these Class Members could readily be identified,

the No Payee and No Payment leases do not meet the Class definition

of “[p]ersons and entities, including their respective successors

and assigns, to whom Antero has paid royalties . . . at any time

since January 1, 2009, pursuant to Leases which contain either of

5 The Plaintiffs agree that suspense accounts are used in the oil

and gas industry when royalty ownership is in question or the payor

is unable to disburse proceeds to the proper owner at that time

(Dkt. No. 342 at 11-12).

MEMORANDUM OPINION AND ORDER GRANTING-IN-

PART AND DENYING-IN-PART THE PLAINTIFFS’ MOTION

FOR AN ORDER APPROVING THE CLASS NOTICE TO BE SENT

TO ADDITIONAL CLASS MEMBERS, APPROVING THE NOTICE TO BE

SENT, AND SETTING A NEW DEADLINE FOR THOSE CLASS MEMBERS

TO REQUEST EXCLUSION FROM THE CERTIFIED CLASS [DKT. NO. 342]

the [Class Lease royalty provisions].” The Plaintiffs assert that

these leases meet the Class definition because Antero has

identified the proper payees by unique payee numbers and has

calculated the amount of royalties owed to each (Dkt. No. 342 at

11). And to the extent Antero has improperly deducted post-

production costs from these royalties, the Plaintiffs further

contend the proper owners are entitled to the same damages sought

by the Class. Id.

Antero, however, does not pay royalties generated under the

No Payee or No Payment leases to a payee or to a bank account for

the proper owner’s benefit (Dkt. No. 345 at 10).6 Therefore, payees

entitled to receive royalties under the No Payee or No Payment

leases cannot be Class Members because Antero has not issued any

funds to them; consequently, they are not persons “to whom Antero

has paid royalties.”

6 The Plaintiffs insist that, when Antero places funds in suspense,

it deposits these funds into individual bank accounts for the

proper owner (Dkt. No. 342 at 11-12). Antero has refuted this,

stating that a suspense account is only a bookkeeping mechanism by

which funds are earmarked for a specific purpose but never actually

deposited into a separate bank account and that, even if it did

deposit suspended funds into separate accounts, the payees still

have never received any payment from Antero (Dkt. No. 345 at 11).

MEMORANDUM OPINION AND ORDER GRANTING-IN-

PART AND DENYING-IN-PART THE PLAINTIFFS’ MOTION

FOR AN ORDER APPROVING THE CLASS NOTICE TO BE SENT

TO ADDITIONAL CLASS MEMBERS, APPROVING THE NOTICE TO BE

SENT, AND SETTING A NEW DEADLINE FOR THOSE CLASS MEMBERS

TO REQUEST EXCLUSION FROM THE CERTIFIED CLASS [DKT. NO. 342]

The Plaintiffs’ reliance on Antero’s summary royalty reports

to establish that Antero has in fact paid royalties to payees

associated with the No Payee and No Payment leases is misplaced.

When Antero previously produced reports listing its leases “in pay

status” as of November 2018, as well as the amount of royalties

calculated for production under each lease, it included the No

Payee and No Payment leases with assigned unique payee numbers

(Dkt. No. 348 at 7-9). According to the Plaintiffs, because Antero

included the No Payee and No Payment leases on its summary royalty

report, it must have paid royalties to the corresponding payees in

November 2018. Id. But Antero’s Rule 30(b)(6) witness, Alvyn

Schopp, refuted this contention explaining why Antero’s inclusion

of the No Payee and No Payment leases on its summary royalty

reports does not support an inference that Antero issued funds to

any payee under these leases.

Although payee numbers for the royalty owners associated

with [the No Payee and No Payment] leases previously

appeared on a [Summary Royalty Report] produced by

Antero during [class certification] discovery, in

compiling the data for the current certified class

member list and current certified class lease lists,

Antero subsequently determined that these royalty owners

were in suspense and have not received payments pursuant

to class leases and, therefore, these royalty owners

were not persons or entities “to whom Antero has paid

royalties.”

MEMORANDUM OPINION AND ORDER GRANTING-IN-

PART AND DENYING-IN-PART THE PLAINTIFFS’ MOTION

FOR AN ORDER APPROVING THE CLASS NOTICE TO BE SENT

TO ADDITIONAL CLASS MEMBERS, APPROVING THE NOTICE TO BE

SENT, AND SETTING A NEW DEADLINE FOR THOSE CLASS MEMBERS

TO REQUEST EXCLUSION FROM THE CERTIFIED CLASS [DKT. NO. 342]

(Dkt. No. 345 at 10-11).

Nor does the Plaintiffs’ reliance on Kay Company, LLC v. EQT

Production Company, 2017 WL 10436074 at *8 (N.D.W. Va. Sept. 6,

2017), and Elna Sefcovic, LLC, et al. v. TEP Rocky Mountain LLC,

No. 17-cv-01990-MSK-MEH (D. Colo.), support their argument. The

class defined in Kay included all “lessors that received or were

due to be paid royalties.” Kay, 2017 WL 10436074 at *1. The

defendant contested the plaintiffs’ ability to satisfy Rule 23’s

numerosity requirement, arguing that many leaseholders were not

sufficiently identifiable “as illustrated by the fact that there

[were] approximately 3,500 West Virginia lessors whose interests

[were] being held in suspense.” Kay, 2017 WL 10436074 at *8. The

court found that the suspended interests did not pose an

“insurmountable obstacle” to class certification because, should

the litigation result in additional royalties being owed, “those

payments [could be] added to whatever escrow accounts the

defendants maintain for the present leases.” Id.

But Kay addressed the propriety of certifying a class which

included future payees, which is not an issue in this case. The

class definition in Kay broadly included all “lessors that received

or were due to be paid royalties,” Kay, 2017 WL 10436074 at *1

MEMORANDUM OPINION AND ORDER GRANTING-IN-

PART AND DENYING-IN-PART THE PLAINTIFFS’ MOTION

FOR AN ORDER APPROVING THE CLASS NOTICE TO BE SENT

TO ADDITIONAL CLASS MEMBERS, APPROVING THE NOTICE TO BE

SENT, AND SETTING A NEW DEADLINE FOR THOSE CLASS MEMBERS

TO REQUEST EXCLUSION FROM THE CERTIFIED CLASS [DKT. NO. 342]

(emphasis added). Consequently, it included royalty payees whose

interests were held in suspense. The Class definition in this case

is significantly narrower, including only persons “to whom Antero

has paid royalties” (Dkt. No. 152 at 42-43 (emphasis added)). Nor

have the Plaintiffs attempted to expand the Class definition to

encompass future payees.

Elna is likewise distinguishable. There, the plaintiffs

included “all persons and entities to whom [the defendant] has

paid royalties.” Significantly, however, when the parties reached

a class-wide settlement they agreed to add as class members those

royalty owners whose funds had been held in suspense.

The parties here have reached no such agreement, and the Class

definition requires Class Members to have received at least one

royalty payment from Antero since January 1, 2009. Antero therefore

has established that, while certain payees may be entitled to

receive royalties held in suspense under the No Payee and No

Payment leases, they have not received any funds from Antero during

the relevant time and, thus, are not part of the Class.

D. Class Certification Notice

Because the Class in this case is certified under Rule

23(b)(3), “the court must direct to class members the best notice

MEMORANDUM OPINION AND ORDER GRANTING-IN-

PART AND DENYING-IN-PART THE PLAINTIFFS’ MOTION

FOR AN ORDER APPROVING THE CLASS NOTICE TO BE SENT

TO ADDITIONAL CLASS MEMBERS, APPROVING THE NOTICE TO BE

SENT, AND SETTING A NEW DEADLINE FOR THOSE CLASS MEMBERS

TO REQUEST EXCLUSION FROM THE CERTIFIED CLASS [DKT. NO. 342]

that is practicable under the circumstances.” Fed. R. Civ. P.

23(c)(2)(B). This includes “individual notice to all members who

can be identified through reasonable effort.” Id.; see also

Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 812 (1985)

(explaining that due process is satisfied “where a fully

descriptive notice is sent first-class mail to each class member,

with an explanation of the right to ‘opt out[.]’”).

On July 9, 2020, the Court approved the Class Notice after

finding that its content and form satisfied the requirements set

forth in Rule 23(c)(2)(B)7 (Dkt. Nos. 225; 233-1 at 1-2). Because

the three (3) payees receiving royalties under the Removed leases

are in fact Class Members, they must be notified of this

litigation. In order to provide these Class Members with the best

7 Rule 23(c)(2)(B) mandates that the class notice “clearly and

concisely state, in plain, easily understood language” the

following pieces of information:

(i) the nature of the action;

(ii) the definition of the class certified;

(iii) the class claims, issues, or defenses;

(iv) that a class member may enter an appearance through

an attorney if the member so desires;

(v) that the court will exclude from the class any member

who requests exclusion;

(vi) the time and manner for requesting exclusion; and

(vii) the binding effect of a class judgment on members

under Rule 23(c)(3).

MEMORANDUM OPINION AND ORDER GRANTING-IN-

PART AND DENYING-IN-PART THE PLAINTIFFS’ MOTION

FOR AN ORDER APPROVING THE CLASS NOTICE TO BE SENT

TO ADDITIONAL CLASS MEMBERS, APPROVING THE NOTICE TO BE

SENT, AND SETTING A NEW DEADLINE FOR THOSE CLASS MEMBERS

TO REQUEST EXCLUSION FROM THE CERTIFIED CLASS [DKT. NO. 342]

notice practicable under the circumstances, the Court ORDERS as

follows: (1) Antero SHALL disclose their names and last known

addresses of the Removed Leases royalty payees to Rapazzini within

five (5) days following entry of this Order; and (2) Rapazzini

SHALL send the Class Notice to them in the manner prescribed in

the Class Notice Plan within ten (10) days following Antero’s

disclosure. These Class Members who wish to request exclusion from

the certified Class must do so in writing within thirty (30) days

following the mailing of the Class Notice.

III. CONCLUSION

For the reasons discussed, the Court:

 GRANTS the Plaintiffs’ motion to send the Class Notice to

the payees receiving royalties under the Removed leases

(Dkt. No. 342);

 DENIES the Plaintiffs’ motion to send the Class Notice to

the payees related to the No Payee or No Payment leases

(Dkt. No. 342);

 ORDERS Antero to produce the names and the last known

addresses of the Plaintiffs Removed royalty payees within

five (5) days following entry of this Order;

MEMORANDUM OPINION AND ORDER GRANTING-IN-

PART AND DENYING-IN-PART THE PLAINTIFFS’ MOTION

FOR AN ORDER APPROVING THE CLASS NOTICE TO BE SENT

TO ADDITIONAL CLASS MEMBERS, APPROVING THE NOTICE TO BE

SENT, AND SETTING A NEW DEADLINE FOR THOSE CLASS MEMBERS

TO REQUEST EXCLUSION FROM THE CERTIFIED CLASS [DKT. NO. 342]

 ORDERS Rapazzini to send the Class Notice to the added

Class Members in the manner prescribed under the Notice

Plan within ten (10) days following receipt of their

information from Antero;

 SETS the new deadline for these Class Members to request

exclusion from the certified Class for thirty (30) days

following the mailing of the Class Notice;

 ORDERS Class counsel to file a status report within three

(3) days after Rapazzini mails the Class Notice to the

additional Class Members, providing to the Court:

o the number of notices mailed, and

o the date of mailing; and

 ORDERS Class counsel to file a status report within three

(3) days after the completion of the exclusion period,

providing to the Court:

o the number of notices re-mailed;

o the number of Class Members who have requested to be

excluded from the Class; and

o the number of Class Members remaining in the Class.

It is so ORDERED.

MEMORANDUM OPINION AND ORDER GRANTING-IN-

PART AND DENYING-IN-PART THE PLAINTIFFS’ MOTION

FOR AN ORDER APPROVING THE CLASS NOTICE TO BE SENT

TO ADDITIONAL CLASS MEMBERS, APPROVING THE NOTICE TO BE

SENT, AND SETTING A NEW DEADLINE FOR THOSE CLASS MEMBERS

TO REQUEST EXCLUSION FROM THE CERTIFIED CLASS [DKT. NO. 342]

The Clerk SHALL transmit copies of this Memorandum Opinion

and Order to counsel of record.

DATED: June 16, 2021

/s/ Irene M. Keeley

IRENE M. KEELEY

UNITED STATES DISTRICT JUDGE