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J. Fleet Oil & Gas Production Co L.L.C. v. Chesapeake Louisiana L.P.

United States District Court, W.D. Louisiana, Shreveport Division

June 7, 2019

J. FLEET OIL & GAS CORPORATION, L.L.C., ET AL.
v.
CHESAPEAKE LOUISIANA, L.P., ET AL.

          HORNSBY MAGISTRATE JUDGE

          MEMORANDUM RULING

          S. MAURICE HICKS, JR., CHIEF JUDGE UNITED STATES DISTRICT COURT

         Plaintiffs J. Fleet Oil & Gas Production Company, L.L.C. and Martin Producing, L.L.C. (collectively “Plaintiffs”) are before the Court on a Motion for Reconsideration (Record Document 51) of the Court's Memorandum Ruling (Record Document 46) (the “Ruling”) granting defendants Chesapeake Louisiana, L.P., Chesapeake Operating, L.L.C., and Chesapeake Energy Marketing, L.L.C.'s (collectively “Defendants”) Motion for Partial Summary Judgment (Record Document 34). For the following reasons, Plaintiffs' Motion for Reconsideration is DENIED.

         LEGAL STANDARD

         The Federal Rules of Civil Procedure do not recognize a motion for reconsideration per se; however, the Fifth Circuit has recognized that such motions may challenge a judgment or order under Rules 54(b), 59(e), or 60(b). See, e.g., Southern Snow Mfg. Co., Inc. v. SnoWizard Holdings, Inc., 921 F.Supp.2d 548, 564 (E.D. La. 2013) (noting, however, that Rules 59 and 60 apply only to final judgments). Where a motion for reconsideration concerns an interlocutory order, as in the present case, such a motion is generally evaluated under the same standards that govern motions to alter or amend a judgment under Rule 59(e). See id. at 565. Under Rule 54(b), the court is given broad discretion to “reconsider, rescind, or modify an interlocutory order for cause seen by it to be sufficient.” Melancon v. Texaco, Inc., 659 F.2d 551, 553 (5th Cir. 1981). “The exact standard applicable to the granting of a motion under Rule 54(b) is not clear, though it is typically held to be less exacting than would be a motion under Rule 59(e) . . . .” Livingston Downs Racing Ass'n, Inc. v. Jefferson Downs Corp., 259 F.Supp.2d 471, 475 (M.D. La. 2002) (citations omitted). Generally, a motion to alter or amend a judgment under Rule 59(e) may be granted for the following grounds: “(1) to correct manifest errors of law or fact upon which judgment is based; (2) the availability of new evidence; (3) the need to prevent manifest injustice; or (4) an intervening change in controlling law.” In re Self, 172 F.Supp.2d 813, 816 (W.D. La. 2001).

         “Reconsideration of a judgment after its entry is an extraordinary remedy that should be used sparingly.” Templet v. HydroChem Inc., 367 F.3d 473, 479 (5th Cir. 2004). In fact, the Fifth Circuit has noted that the standards for Rule 59(e) “favor the denial” of such motions. Southern Constructors Group, Inc. v. Dynalectric Co., 2 F.3d 606, 611 (5th Cir. 1993). Furthermore, motions for reconsideration are “not the proper vehicle for rehashing evidence, legal theories, or arguments that could have been offered or raised before the entry of judgment . . . . Rather, Rule 59(e) serve[s] the narrow purpose of allowing a party to correct manifest errors of law or fact or to present newly discovered evidence.” Templet, 367 F.3d at 479 (citations omitted). “When there exists no independent reason for reconsideration other than mere disagreement with a prior order, reconsideration is a waste of judicial time and resources and should not be granted.” Southern Snow Mfg. Co., Inc. v. SnoWizard Holdings, Inc., 921 F.Supp.2d 548, 566 (E.D. La. 2013).

         ANALYSIS

         I) The Court's Use of Non-Louisiana Jurisprudence

         Plaintiffs' first argument is that the Court erred in “relying upon the laws of other states, specifically Texas, in its Ruling.” Record Document 51-1 at 9. Plaintiffs argue that the Agreement at issue in this case contained a choice of law provision, which provided that it “shall be governed by Louisiana law.” Id. Therefore, Plaintiffs argue, any reliance upon non-Louisiana jurisprudence is improper. It should be noted that Plaintiffs already raised this argument in their opposition to the underlying Motion for Partial Summary Judgment, and that the Court responded to this argument in its Ruling. See Record Document 46 at 16 & 17. As such, Plaintiff is simply rehashing a legal argument made in earlier briefing, which is inappropriate in a motion for reconsideration. Southern Snow Mfg. Co., 921 F.Supp.2d 548 (“It is well settled that motions for reconsideration should not be used to re-urge matters that have already been advanced by a party”). However, the Court will briefly address Plaintiffs' concerns.

         To be clear, Louisiana law was, in fact, applied in the Court's Ruling. Specifically, the Court applied Louisiana law regarding the interpretation of contracts. See Record Document 46 at 5 & 6. In doing so, the Court used non-Louisiana cases merely as persuasive authority in the absence of any Louisiana Supreme Court jurisprudence directly on point. The use of persuasive authority is a common practice and has been used by Louisiana courts when applying the Louisiana law on contract interpretation. See Henry v. Ballard & Cordell Corp., 418 So.2d 1334 (La. 1982) (relying on jurisprudence from other jurisdictions to decide a res nova issue of interpretation of an oil and gas contract). Therefore, Plaintiffs' argument that the Court improperly relied upon non-Louisiana jurisprudence is rejected.

         II) The Court's Interpretation of “Overriding Royalty Interest”

         Plaintiffs make several arguments regarding the Court's interpretation of the term “overriding royalty interest” (“ORRI”). First, Plaintiffs argue that the Court “seemed content to simply label Plaintiffs' interest as an [ORRI] and conclude its investigation . . . .” Record Document 51-1 at 10. According to Plaintiffs, the Court should have looked beyond the mere label ORRI to determine its substantive characteristics and legal effects. See id. In support of this argument, Plaintiffs cite to Matter of Senior-G & A Operating Co., for the proposition that courts must look beyond the superficial labels of a transaction and examine the substance of an agreement. 957 F.2d 1290, 1296 (5th Cir. 1992).

         First, Plaintiffs' argument mischaracterizes the Court's treatment of this issue. The Court was not “content” to label Plaintiffs' interest as an ORRI and end its investigation. In fact, the Court dedicated four pages of its Memorandum Ruling to the interpretation of the term ORRI. See Record Document 46 at 8 - 11. Second, Plaintiffs are confusing a transaction with its terms. Here, the Court did, in fact, look beyond the label of the transaction when it determined that the “assignments” at issue in this case are subleases. See Record Document 46 at 7. The Court then applied Louisiana law on contract interpretation to the terms of the Agreement and determined that it unambiguously reserved an ORRI, a technical term in the oil and gas industry, in favor of Plaintiffs on each lease subject to the Agreement. See Record Document 46 at 8.

         Plaintiffs' next argument regarding the Court's interpretation of the term ORRI is that there is a difference between an interest reserved by a lessor and an interest reserved by a working interest owner, and that by adopting the interpretation of ORRI that it did, the Court improperly treated Plaintiffs as lessors. See Record Document 51-1 at 15. The Court has considered Plaintiffs' ...


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