Mobil Oil Class Action Defense Cases–Weber v. Mobil Oil: Oklahoma State Court Certifies Class Action Against Mobil Oil Holding Plaintiffs Satisfied Requirements For Class Action Treatment Under Oklahoma Law

Aug 28, 2008 | By: Michael J. Hassen

Class Action Complaint Against Mobil Oil Alleging Defendants Improperly Deducted Costs and/or Expenses from Mineral Rights Payments to Royalty Owners Satisfies State’s Class Action Requirements Oklahoma State Court Holds

Plaintiffs filed a class action against various Mobil Oil and Exxon Mobil entities; the class action complaint alleged that defendants had represented to the class that oil royalty payments would be free and clear of any operating or investment costs, but that under the “Fiske Formula” utilized by defendants to calculate payments to class members, defendants deducted from payments to the class certain operating or investment costs. Weber v. Mobil Oil Corp., Custer County District Court Case No. CJ-2001-53 (July 31, 2008) [Slip Opn., at 1-3]. The class action complaint contained, inter alia, theories of breach of fiduciary duty, conversion, fraud, breach of contract, breach of the implied covenant of good faith and fair dealing, violation of Oklahoma’s Production Revenue Standards Act, unjust enrichment, accounting, and constructive trust. See id., at 16-21. Plaintiffs’ lawyers moved the court to certify the litigation as a class action, id., at 1-2. The trial court concluded that the requirements for class action certification had been satisfied and granted the motion.

The trial court first concluded that “all royalty owners could be ascertained by a combination of title searches and data from Mobil and other Tract Operator’s records,” and that numerosity was not subject to dispute given that the class consisted of approximately 1600 members. Weber, at 7. The court also had no difficulty in concluding that plaintiffs were adequate representatives of the members of the proposed class action, and noted that defendants did not contest the adequacy of class counsel. See id., at 12-13. With respect to commonality, the trial court found that Mobil’s operations “were conducted as if there was a single lease executed by all royalty interest mineral owners” and that the “plain language” of the agreement required that distributions be paid “free and clear of all [expenses] and free of any liens.” Id., at 8. Further, the evidence presented in support of class action certification established that “Mobil applied the Fiske Formula, reducing the average weighted price…by 14.83% for the entire period of 1968-1998,” id., at 8-9.Accordingly, the court found “common questions regarding accounting and damages exist for the class.” Id., at 9. Moreover, the court found that common representations and omissions were made to members of putative class, see id., at 9-10. Additionally, the trial court found that common questions of law exist, warranting class action treatment. See id., at 10-11. Finally, the trial court found that plaintiffs’ had demonstrated both predominance and superiority, also warranting class action treatment. See id., at 13-15. Because the court found that plaintiffs had satisfied all of the requirements for class action certification under Oklahoma law, it granted plaintiffs’ motion. Id., at 29. The court’s legal analysis may be found at pages 21-29.

Download PDF file of Weber v. Mobil Oil

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