United States District Court, W.D. Louisiana, Shreveport Division
ALLEN JOHNSON, ET AL.
CHESAPEAKE LOUISIANA, LP
HORNSBY MAGISTRATE, JUDGE
MAURICE HICKS, JR., CHIEF JUDGE
the Court are two Motions for Partial Summary Judgment.
See Record Document 24 & 28. The first is a
Motion for Partial Summary Judgment (Record Document 24)
filed by Defendants, Chesapeake Louisiana, L.P. and
Chesapeake Operating, L.L.C. (collectively “the
Chesapeake Defendants”). The second is Cross-Motion for
Partial Summary Judgment (Record Document 28) filed by
Plaintiffs Allen Johnson, Linda Johnson, Donald A. Crosslin,
Jr., Mary Jo Gragg, Rodney M. Hudson, Clifton Layman, Alfred
R. Meshell, Sherman R. Meshell, David E. Oliver, Tracy
Oliver, Laura S. Pendleton, Andrew L. Piccolo, Karla S.
Piccolo, Randall S. Rodgers, Freddie P. Spohrer, Tim G.
Taylor, Charles R. Waldon, Rexford Galen White, James Shope,
Donna Shope, Charlotte McCune, and Jerry McCune. The motions
are fully briefed and the Court heard oral arguments on the
cross-motions. The sole legal issue to be decided in the
cross-motions is whether Plaintiffs, twenty-two unleased
mineral owners (the “UMO Plaintiffs”), are
responsible for a proportionate share of post-production
costs. For the reasons set forth below, this
Court holds that under Louisiana Revised Statute 30:10(A)(3),
post-production costs cannot be recovered by an operator from
an unleased mineral owner's share of production proceeds.
Thus, the UMO Plaintiffs' Cross-Motion for Partial
Summary Judgment (Record Document 28) is
GRANTED and the Chesapeake Defendants'
Motion for Partial Summary Judgment (Record Document 24) is
Chesapeake Defendants were at all times relevant the operator
of the Kelley Well, which is the unit well of the HA RA SU86
unit (“the Unit”). The UMO Plaintiffs are
landowners within the Unit and own a non-operating, unleased
interest in the Unit. In their Petition, the UMO Plaintiffs
allege, among other claims, that the Chesapeake Defendants
improperly deducted certain post-production costs from the
UMO Plaintiffs' share of production proceeds. In
particular, Plaintiffs contend that Chesapeake has violated
Louisiana law by charging or netting-out post-production
costs from Plaintiffs' share of production secured from
the Kelley Well. These post-production costs generally
include gathering, compression, treatment, processing,
transportation, and dehydration costs.
Chesapeake Defendants moved for partial summary judgment,
alleging that their deductions for post-production costs are
authorized under general principles of unjust enrichment and,
alternatively, co-ownership. See Record Document 24.
The Chesapeake Defendants contend that La R.S. 30:10 is
inapplicable to the instant matter, as such statute is
limited to development and operation costs and does not
address post-production costs. The UMO Plaintiffs opposed the
motion and filed their own cross-motion, arguing that general
principles of co-ownership and unjust enrichment cannot
supersede the positive statutory law governing their payment
rights. See Record Document 28. They contend that
the statutory scheme set forth in La. R.S. 30:10 as a whole
governs and that post-production costs are not among the
exclusive list of expenses deductible against unleased
owners, as set forth in Section 10(A)(3).
Partial Summary Judgment Standard.
Rule 56(a) provides, in pertinent part:
Motion for Summary Judgment or Partial Summary Judgment. A
party may move for summary judgment, identifying each claim
or defense-or the part of each claim or defense-on which
summary judgment is sought. The court shall grant summary
judgment if the movant shows that there is no genuine dispute
as to any material fact and the movant is entitled to
judgment as a matter of law.
F.R.C.P. 56(a) (emphasis added); see also Quality
Infusion Care, Inc. v. Health Care Serv. Corp.,
628 F.3d 725, 728 (5th Cir.2010). “A genuine issue of
material fact exists when the evidence is such that a
reasonable jury could return a verdict for the nonmoving
party.” Quality Infusion Care, Inc., 628 F.3d
at 728. “Rule 56[(a)] mandates the entry of summary
judgment, after adequate time for discovery and upon motion,
against a party who fails to make a showing sufficient to
establish the existence of an element essential to that
party's case, and on which that party will bear the
burden of proof at trial.” Patrick v.
Ridge, 394 F.3d 311, 315 (5th Cir.2004).
movant demonstrates the absence of a genuine dispute of
material fact, “the nonmovant must go beyond the
pleadings and designate specific facts showing that there is
a genuine issue for trial.” Gen. Universal Sys.,
Inc. v. Lee, 379 F.3d 131, 141 (5th Cir.2004). Where
critical evidence is so weak or tenuous on an essential fact
that it could not support a judgment in favor of the
nonmovant, then summary judgment should be granted. See
Boudreaux v. Swift Transp. Co., 402 F.3d 536, 540 (5th
partial summary judgment order is not a final judgment but is
merely a pre-trial adjudication that certain issues are
established for trial of the case.” Streber v.
Hunter, 221 F.3d 701, 737 (5th Cir.2000). Partial
summary judgment serves the purpose of rooting out,
narrowing, and focusing the issues for trial. See
Calpetco 1981 v. Marshall Exploration, Inc., 989 F.2d
1408, 1415 (5th Cir.1993).