Chesapeake Louisiana, L.P. v. Buffco Production, Inc., 564 F. App'x 751

Chesapeake sued Freeman, Buffco, and related entities seeking to recover an overpayment from a 2008 Letter Agreement for deep rights in several oil and gas units.
The Letter Agreement included a Non-Ops Clause requiring offers to non-operating owners, including Freeman, Freeman Capital, and Harleton.
Chesapeake paid Buffco and Freeman 6.8 million believing Buffco/Freeman owned 100% of Geisler Unit deep rights, but actual ownership was Buffco 25%, Freeman 22%, Freeman Capital 3%, Harleton 50%.
Harleton intervened asserting claims and seeking to be paid from Buffco/Freeman with Harleton to convey its Geisler Unit interest to Chesapeake.
District court granted summary judgment in favor of Chesapeake and Harleton on Geisler Unit claims, and in favor of Chesapeake on Bowen, Hemby, and Yow Units; Harleton’s status created potential lack of subject-matter jurisdiction.
This court vacated the Geisler Unit summary judgment and remanded to determine whether Harleton is an indispensable party, while affirming Bowen, Hemby, and Yow Units rulings on independent jurisdiction grounds.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Does Harleton’s intervention destroy diversity over Geisler Unit claims?	Harleton should align as plaintiff-intervenor; diversity remains with other parties.	Harleton’s alignment as defendant-intervenor destroys diversity.	No; Harleton should be aligned as plaintiff-intervenor, so diversity is not destroyed for Geisler Unit claims.
Is subject-matter jurisdiction over Geisler Unit claims lacking due to Harleton’s alignment?	Diversity existed prior and Harleton’s alignment does not destroy it.	Harleton’s status defeats subject-matter jurisdiction for Geisler Unit claims.	Yes; lacking jurisdiction; vacate summary judgment and remand to determine indispensability of Harleton.
Do Bowen, Hemby, and Yow Units claims have an independent basis for federal jurisdiction?	Independent jurisdiction exists; Bowen/Hemby/Yow should be adjudicated.	If Geisler Unit claims are dismissed for lack of jurisdiction, related claims may fall.	Yes; independent jurisdiction under § 1332 exists for Bowen, Hemby, and Yow Units; affirm denial as to those claims.

Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 (Supreme Court 1994) (requires independent basis for jurisdiction for third-party claims)
Silver Star Enters., Inc. v. M/V Saramacca, 19 F.3d 1008 (5th Cir. 1994) (identify jurisdictional foundations in multi-party actions)
City of Indianapolis v. Chase Nat’l Bank of City of N.Y., 314 U.S. 63 (Supreme Court 1941) (alignment of parties by ultimate interests in dispute)
Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546 (Supreme Court 2005) (diversity and presence of same-state plaintiffs affects jurisdiction)
Griffin v. Lee, 621 F.3d 380 (5th Cir. 2010) (intervenor alignment based on interests and potential liability)
Brown v. Pac. Life Ins. Co., 462 F.3d 384 (5th Cir. 2006) (indispensable party considerations in Rule 19 analysis)
Kuehne & Nagel (AG & Co) v. Geosource, Inc., 874 F.2d 283 (5th Cir. 1989) (counterclaims may proceed if supported by independent jurisdiction)
Haberman v. Equitable Life Assurance Society of the United States, 224 F.2d 401 (5th Cir. 1955) (compulsory counterclaims may proceed under proper jurisdiction even if primary claim is dismissed)
United States v. Wheeler, 322 F.3d 823 (5th Cir. 2003) (precedent harmonization when lines of authority conflict)