SEECO Inc. v. Stewmon
2016 Ark. 198
| Ark. | 2016Background
- Over 16,000 standard SEECO gas leases in Arkansas contained a clause allowing deduction from royalties for "reasonable" gathering, compression, treatment, and marketing costs; plaintiffs alleged SEECO (and affiliates) upcharged and misdeducted royalties.
- Stewmon filed a class-action complaint (Sept. 27, 2013) seeking contract, unjust-enrichment, statutory royalty/damages, DTPA, and fraud remedies on behalf of Arkansas resident lessors whose leases permitted such deductions.
- The St. Francis County Circuit Court certified a class defined by Arkansas residency and execution of SEECO leases containing the deduction clause; circuit court relied on lease copies, an affidavit from a SEECO employee (Guidry) quantifying implicated leases, a Dedicated Field Services Agreement, and related documents.
- SEECO appealed interlocutorily under Rule 2(a)(9), arguing (inter alia) that (1) the prior Snow class action barred this suit, (2) the class definition requires merits determinations, (3) the Rule 23 prerequisites lacked evidentiary support, and (4) certification violated due process.
- After certification briefing, the original lead plaintiff (Stewmon) died; this Court temporarily remanded for substitution and the circuit court approved Stephanie DeVazier as substitute representative; SEECO challenged that substitution and DeVazier’s adequacy.
- The Arkansas Supreme Court affirmed the certification order, limiting its review to class-certification issues and rejecting SEECO’s broader jurisdictional and procedural attacks in this interlocutory appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether prior Snow class action bars the Stewmon class | Stewmon: interlocutory appeal focuses on certification only; Snow does not preclude separate class because parties and plaintiffs differ | SEECO: concurrent class suits should be barred to avoid conflicting judgments and duplication (invokes a "concurrent-jurisdiction"/comity rule) | Court: Issue outside scope of Rule 2(a)(9) appeal; no free-standing "concurrent-jurisdiction" doctrine that mandates dismissal here because parties differ and Rule 12(b)(8) inapplicable on these facts |
| Whether the class definition improperly requires merits determinations | Stewmon: class defined by residency + presence of a specific lease clause—objective, not merits-based | SEECO: class as defined hinges on resolving whether charges were "reasonable," a merits question (Pipkin analog) | Court: Class definition is objective (residency and lease form); merits question (reasonableness of deductions) reserved for later factfinder; Pipkin not controlling |
| Whether plaintiffs presented sufficient evidence for Rule 23 factors (ascertainability, numerosity, commonality, predominance, typicality, adequacy, superiority) | Stewmon: submitted leases, Guidry affidavit, Dedicated Field Services Agreement, Snow record and other documents to support each Rule 23 element | SEECO: evidence was minimal/insufficient (only one lease, overbroad inferences from affidavit), failed to show commonality/predominance, superiority undermined by multiple class actions | Court: Circuit court had adequate evidentiary record (affidavit, contracts, deposition excerpts, documents); Arkansas imposes a more liberal certification standard than federal courts; Rule 23 factors met or supported on record and court did not abuse discretion |
| Whether substitution of DeVazier and her adequacy as class representative complied with procedure and Rule 23 | Plaintiffs: substitution ordered by this Court and approved by circuit court; DeVazier swore to dismiss duplicative suits and to act for class | SEECO: Rule 25/Rule 24 procedures not followed; DeVazier is atypical (member of other suits), may face unique defenses, and class counsel selection was improper | Court: Substitution valid under this Court’s remand and Rule 81(c); DeVazier’s membership in other suits and promise to dismiss did not make her inadequate or atypical; class counsel presumed adequate and SEECO failed to rebut presumption |
| Whether circuit court lacked jurisdiction because claims are pending elsewhere (June Merrell, Snow) or subject to preclusion | Stewmon: interlocutory appeal limited to certification; broader preclusion/venue challenges not properly before Court | SEECO: subject-matter jurisdiction defeated by pending related suits and preclusion doctrines; seeks superintending relief | Court: Arguments invoke defenses (venue/12(b)(8)/preclusion) not jurisdictional and are outside the limited interlocutory-review scope; no extraordinary writ properly presented; rejection on merits of this appeal |
| Whether certification became moot (or must be vacated) after original lead plaintiff's death | Plaintiffs: Court remanded for substitution; certification can continue with a qualified substitute | SEECO: certification must be vacated when representative dies while appeal pending | Court: Substitution procedure was appropriate; remand and circuit-court approval of DeVazier cured any concern; dismissal not required in this interlocutory posture |
Key Cases Cited
- Foster v. Hill, 372 Ark. 263 (addressing limits of superintending authority and special-prosecutor issues)
- Edwards v. Nelson, 372 Ark. 300 (concurrent case cited by parties regarding comity/competing actions)
- Lenders Title Co. v. Chandler, 353 Ark. 339 (limits on scope of interlocutory appeals from class-certification orders)
- Southwestern Bell Yellow Pages, Inc. v. Pipkin Enterprises, Inc., 359 Ark. 402 (class-definition invalid when it requires resolution of merits)
- BPS, Inc. v. Richardson, 341 Ark. 834 (numerosity and practical-certification considerations)
- SEECO v. Hales, 330 Ark. 402 (prior SEECO litigation relied on in briefing on common issues)