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Hollingsworth v. Range Resources--Appalachia

October 28, 2009


The opinion of the court was delivered by: Judge James M. Munley United States District Court

(Judge Munley)


Before the court are plaintiffs' objections (Doc. 18) to the report and recommendation of Magistrate Judge Thomas M. Blewitt (Doc. 17) that defendant's motion to dismiss (Doc. 6) be granted and that plaintiffs' complaint be dismissed pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. The matter is fully briefed and ripe for disposition.


Plaintiffs John P. Hollingsworth, James A. Hollingsworth, and Kenneth E. Hollingsworth own sixty-six acres of land (the "land") in Lichfield Township. (Compl. at ¶ 5 (Doc. 1 at 2)). On or about June 8, 2008, Defendant Range Resources-Appalachia, LLC ("Range") mailed plaintiffs a five-year "paid-up oil and gas lease" for their signature. (Id. at ¶¶ 6, 7). Along with the lease, Range mailed plaintiffs a "Dear Property Owner" letter ("DPO letter"). (Id. at ¶ 19; DPO Letter (Doc. 1-3 at 20)). The lease states the terms under which Range would be allowed to drill on plaintiffs' land for oil and gas in return for consideration of one dollar and potential royalties. (Lease (Doc. 1-3 at 10)). The DPO letter thanks plaintiffs for "entering into an oil and gas lease" with Range and explains that Range pays a bonus payment to property owners "as consideration for executing the lease." (DPO Letter (Doc 1-3 at 20)). Significantly, the DPO letter states that Range "hereby agrees to pay the following oil and gas owner the amount below set forth subject to approval of title and management lease review. . . ." (Id.) The DPO letter recites plaintiffs' lease payment amount as $165,000.00, to be paid ninety days from the lease date. (Id.) Neither the lease nor the DPO letter was ever signed by a representative of Range, though Range prepared each document.

Following Range's instructions, plaintiffs each signed the lease before a notary public on July 28, 2008. (Compl. at ¶¶ 7, 8; Lease (Doc 1-3 at 10)). On August 13, 2008, plaintiffs mailed the lease containing their signatures to defendant. (Id. at ¶ 8). Range Vice President Jeffery Bynum sent plaintiffs a letter on December 16, 2008, stating that plaintiffs' lease was not approved and returning the lease stamped 'void.' (Id. at ¶ 9; Bynum Letter (Doc. 1-3 at 22)). Range made no payment to plaintiffs and plaintiffs filed suit in the Court of Common Pleas of Bradford County on March 30, 2009 for breach of contract and declaratory relief. (Compl. at ¶¶ 22 to 30 (Doc. 1-3)).

Range removed the action to this court pursuant to 28 U.S.C. § 1441 based on diversity jurisdiction. 28 U.S.C. § 1332. On May 11, 2009, Range filed the instant motion to dismiss, which Magistrate Judge Thomas M. Blewitt recommends granting. (Doc. 17). Plaintiffs filed their objections to the magistrate judge's recommendation, bringing the case to its present posture.


The court has diversity jurisdiction over this action pursuant to 28 U.S.C. §§ 1332 where the plaintiffs are citizens of Pennsylvania and Range is a Delaware corporation with a principal place of business not in Pennsylvania. (Notice of Removal (Doc. 1)).


In disposing of objections to a magistrate judge's report and recommendation, we make a de novo determination of those portions of the report to which objections are made. 28 U.S.C. § 636 (b)(1)(C); see also Henderson v. Carlson, 812 F.2d 874, 877 (3d Cir. 1987). This court may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge. We may also receive further evidence or recommit the matter to the magistrate judge with instructions. Id.

Before the court is the magistrate judge's recommendation that we grant defendant's motion to dismiss for failure to state a claim upon which relief can be granted. FED. R. CIV. P. 12(b)(6). When a 12(b)(6) motion is filed, the sufficiency of the allegations in the complaint is tested. Granting the motion is appropriate if, accepting as true all the facts alleged in the complaint, the plaintiff has not pleaded "enough facts to state a claim to relief that is plausible on its face," or put another way, "nudged [his or her] claims across the line from conceivable to plausible." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). The Third Circuit interprets Twombly to require the plaintiff to describe "enough facts to raise a reasonable expectation that discovery will reveal evidence of" each necessary element of the claims alleged in the complaints. Phillips v. County of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008) (quoting Twombly, 550 U.S. at 556). Moreover, the plaintiff must allege facts that "justify moving the case beyond the pleadings to the next stage of litigation." Id. at 234-35.

In relation to Federal Rule of Civil Procedure 8(a)(2), the complaint need only provide "'a short and plain statement of the claim showing that the pleader is entitled to relief,' in order to 'give the defendant fair notice of what the . . . claim is and the grounds upon which it rests,'" Twombly, 550 U.S. at 555 (citation omitted). "[T]he factual detail in a complaint [cannot be] so undeveloped that it does not provide a defendant the type of notice of claim which is contemplated by Rule 8." Phillips, 515 F.3d at 232 (citation omitted). "Rule 8(a)(2) requires a 'showing' rather than a blanket assertion of an entitlement to relief." Id.

The issue is whether the facts alleged in the complaint, if true, support a claim upon which relief can be granted. In deciding a 12(b)(6) motion, the court must accept as true all factual allegations in the complaint and give the pleader the benefit of all reasonable inferences that can fairly be drawn therefrom, and view them in the light most favorable to the plaintiff. Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997). However, "we are not bound to accept as true a legal conclusion couched as a factual allegation." Ashcroft v. Iqbal, -- U.S. --, 129 S.Ct. 1937, 1949-50 (2009) (internal quotations omitted). The Supreme Court has counseled that a court examining a motion to dismiss should, "begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of ...

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