Kulp Minerals LLC v. Apache Corporation
2:23-cv-00408
| D.N.M. | Mar 27, 2025Background
- Kulp Minerals LLC owns overriding royalty interests in two oil and gas leases operated by Apache Corporation in Lea County, New Mexico.
- Apache is responsible for making overriding royalty payments to Kulp for production from these wells.
- Kulp sued Apache, claiming breach of statutory duties under the New Mexico Oil and Gas Proceeds Payment Act, including untimely royalty payments and lack of statutory interest on late payments.
- Kulp initiated a class action, seeking relief on behalf of similarly situated interest owners who allegedly received late payments without statutory interest.
- The primary claims at issue concern Apache’s obligations under §§ 70-10-3.1 (Duty to Locate) and 70-10-4 (Suspense Accounts and Interest) of the New Mexico O&G Proceeds Payment Act.
- Apache moved for partial summary judgment, arguing Kulp lacked standing under these statutory provisions since Kulp's funds were never held in suspense nor was Kulp ever 'unlocatable.'
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing under § 70-10-3.1 (Duty to Locate) | Kulp claims Apache failed to diligently investigate and pay interest; Kulp and class harmed by such failures. | Apache asserts Kulp's identity/location was always known, never making § 70-10-3.1 applicable. | Kulp suffered no injury in fact; lacks standing under § 70-10-3.1. |
| Standing under § 70-10-4 (Suspense Accounts) | Kulp says Apache failed to pay owed interest on late payments allegedly held in suspense accounts. | Apache never suspended Kulp's funds; Kulp always in pay status; thus § 70-10-4 doesn’t apply. | Kulp suffered no injury in fact; lacks standing under § 70-10-4. |
| Rule 56(d) request for more discovery | Kulp seeks to defer summary judgment pending further fact-finding. | Further discovery would not affect core undisputed facts relevant to standing. | Further discovery unwarranted; summary judgment granted. |
| Class typicality/adequacy attack via standing | Kulp claims the challenge is a premature attack on class certification issues. | Apache's challenge goes to Article III standing, not certification. | Court agrees with Apache; challenge properly addresses standing. |
Key Cases Cited
- Warth v. Seldin, 422 U.S. 490 (1975) (plaintiffs must show personal injury to establish standing, not injury suffered by others)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (sets forth the three elements of Article III standing)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) (summary judgment standard; material and genuine factual disputes)
- Baker v. USD 229 Blue Valley, 979 F.3d 866 (10th Cir. 2020) (describes Rule 12(b)(1) facial and factual attacks on standing)
- Abraham v. WPX Production Productions, LLC, 184 F. Supp. 3d 1150 (D.N.M. 2016) (distinguishes between standing and typicality/adequacy in class actions)