Dart Cherokee Basin Operating Company, LLC, et al. v. Owens, et al.

Stinson Leonard Street LLP took over an oil and gas class action on appeal before the Tenth Circuit, and convinced the U.S. Supreme Court to grant certiorari. The case was originally filed in Wilson County, Kansas. The putative class alleges underpayment of royalties under oil and gas leases. Defendants removed the case to federal court under the Class Action Fairness Act ("CAFA"), which, among other things, requires at least $5 million to be controversy for there to be federal jurisdiction. Upon removal, defendants alleged that they calculated over $8.2 million in controversy.

Although plaintiff did not specifically disagree with the alleged amount in controversy, he sought to remand the case back to state court on the basis that defendants did not submit admissible evidence supporting their calculation in the Notice of Removal. In their response to the motion, defendants submitted evidence supporting their calculation, which evidence plaintiff neither denied nor refuted. Nonetheless, the federal district court refused to consider the supporting evidence and granted the motion to remand.

A team of Stinson lawyers led by Matt Salzman took over the case on appeal. The Tenth Circuit Court of Appeals denied the request for rehearing en banc in a 4-to-4 split decision, accompanied by a lengthy dissent supporting the defendants’ position. On April 7, 2014, the U.S. Supreme Court granted defendants petition for certiorari. Stinson team is now complemented with counsel from Alston & Byrd, and the case is set for oral argument on October 7, 2014. The issue affects every defendant seeking to remove a case from state to federal court. The Supreme Court will decide whether defendants must present admissible evidence with the notice of removal, or whether defendants may satisfy their burden with evidence presented in response to a motion for remand.