Whisenant v. Strat Land Exploration Co., 429 P.3d 703

Background

Plaintiff Tony R. Whisenant sued Strat Land for underpayment/nonpayment of natural gas royalties from roughly 88 Oklahoma wells marketed to DCP Midstream, asserting a putative class of ~1,000 royalty owners (wells in OK Panhandle counties).
Whisenant alleged Strat Land paid royalties on "net" proceeds received from DCP rather than the gross proceeds received at the pipeline, and deducted midstream processing/gathering costs before royalty payments.
Proposed class excluded parties with leases containing express contractual language permitting such deductions and certain entities (e.g., federal/tribal lessors, Strat Land affiliates, NYSE/NASDAQ companies).
The trial court certified the class under 12 O.S. § 2023(B)(3), concluding common questions predominate and that generalized/expert evidence (a "battle of experts") could resolve liability and damages class-wide, relying on Tyson and Dukes.
On appeal, the Oklahoma Court of Civil Appeals conducted de novo review and reversed class certification, holding determination of marketability and allowable post-production deductions requires individualized, fact‑intensive inquiries for each well.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether common questions of law or fact predominate under § 2023(B)(3) for certification	Whisenant: Strat Land used a uniform royalty method (net receipts from DCP) so common issues (marketability point and deductibility) can be decided with generalized/expert proof	Strat Land: Marketability and allowable deductions vary by well (gas quality, location, contracts), requiring individual inquiries	Held: Predominance not met; individualized, fact‑intensive inquiries for each well defeat class certification
Whether generalized/representative proof (sampling/expert averages) can establish class‑wide liability	Whisenant: Expert sampling and record data can show consistent class‑wide proof (analogous to Tyson)	Strat Land: Sampling would distort outcomes; facts at each well are too diverse to rely on averages	Held: Tyson sampling approach inapplicable; unlike Tyson facts, variables here are not reasonably predictable by sample and cannot sustain individual claims
Proper application of Oklahoma marketable‑product rule and Mittelstaedt factors in a class action	Whisenant: Marketability and deductible post‑production costs can be established class‑wide	Strat Land: Mittelstaedt requires case‑by‑case proof whether costs enhanced an already marketable product, are reasonable, and increased royalty revenues proportionately	Held: Mittelstaedt creates a fact‑intensive test; courts must examine post‑production costs individually, undermining class treatment
Whether a uniform corporate practice of paying royalties on net revenue resolves liability class‑wide	Whisenant: Uniform practice shows common conduct and thus common liability	Strat Land: Uniform practice does not resolve where marketability occurs or which costs are deductible for each stream of gas	Held: Uniform conduct insufficient; it does not resolve the central individualized issues of when gas became marketable and which costs are chargeable

Key Cases Cited

Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036 (2016) (permitting representative sampling where the sample could sustain individual claims)
Wal‑Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011) (class commonality requires more than generalized grievances; plaintiffs must be similarly situated)
Mittelstaedt v. Santa Fe Minerals, Inc., 954 P.2d 1203 (Okla. 1998) (post‑production cost deductibility and marketability point require fact‑intensive, case‑by‑case analysis)
Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (1997) (predominance inquiry focuses on whether common questions relate centrally to each class member's case)
EQT Production Co. v. Adair, 764 F.3d 347 (4th Cir. 2014) (uniform practices may establish commonality but do not alone satisfy Rule 23(b)(3) predominance when individual issues control)