United States District Court, M.D. Pennsylvania
CHARLES L. ROUTE and BRENDA L. ROUTE, Plaintiffs,
EAST RESOURCES MANAGEMENT, LLC, Defendant.
WILLIAM W. CALDWELL, District Judge.
We are considering a motion for summary judgment filed by Defendant SWEPI, LP on August 1, 2014. (Doc. 14). This matter relates to a dispute concerning the expiration date of an oil and gas lease. Plaintiffs filed a complaint in the Pennsylvania Court of Common Pleas of Tioga County seeking a declaratory judgment, equitable relief, damages, and attorneys' fees. (Doc. 1-2). Defendant removed the suit to this court based on diversity jurisdiction. For the reasons discussed below, we will grant Defendant SWEPI's motion for summary judgment.
Plaintiffs own approximately 76.3 acres located in Liberty Township, Tioga County. (Doc. 15 at 1; Doc. 18 at 1). On February 20, 2003, Plaintiffs entered into an option contract with Defendant SWEPI. (Doc. 15 at 2; Doc. 18 at 1). The option contract granted SWEPI the "exclusive option to lease the oil and gas... in and under [Plaintiffs' property] in accordance with the covenants and agreements contained in [an] Oil and Gas Lease made and entered into by the" parties. (Doc. 19-1 at 2). When Plaintiffs signed the option contract on February 20, 2003, they also signed a lease that was attached to the option contract. (Doc. 15 at 5; Doc. 18 at 2). Pursuant to the option contract, the lease would become effective on the date Defendant SWEPI exercised its option. (Doc. 19-1 at 2).
SWEPI claims it exercised its option on February 19, 2004, one day before the option was to expire, by mailing payments to Plaintiffs. (Doc. 15 at 3). The lease agreement had an initial term of five years. (Doc. 15 at 3; Doc. 18 at 2). It also provided SWEPI the option to extend the lease for an additional five years if the option to extend was exercised within thirty days following the expiration of the initial term. (Doc. 15 at 3; Doc. 18 at 3). On August 29, 2008, SWEPI sent Plaintiffs notice that it was exercising its option to extend the lease an additional five years. (Doc. 15 at 4; Doc. 18 at 3). SWEPI subsequently recorded this extension. (Id.).
Plaintiffs assert that SWEPI did not exercise the option to extend the lease and the lease expired. (Doc. 1-2 at 6). In their complaint, Plaintiffs ask us to declare the lease terminated. (Doc. 1-2 at 7-8). Plaintiffs further seek damages and attorneys' fees, claiming that the recorded lease extension prevented them from entering into more lucrative lease agreements. (Doc. 1-2 at 8). Conversely, SWEPI claims that the lease did not expire until February 19, 2009 and the notice of extension on August 29, 2008 was timely, extending the lease until February 19, 2014. (Doc. 15 at 4). Defendant SWEPI moves for summary judgment. (Doc. 1-2 at 8-9).
A. Standard of Review
We will examine the motion for summary judgment under the well-established standard. Lawrence v. City of Phila. , 527 F.3d 299, 310 (3d Cir. 2008) ("Summary judgment is only appropriate if there are no genuine issues of material fact."). We "must view all evidence and draw all inferences in the light most favorable to the non-moving party" and we will only grant the motion "if no reasonable juror could find for the non-movant." Id . "Material facts are those that could affect the outcome' of the proceeding, and a dispute about a material fact is genuine if the evidence is sufficient to permit a reasonable jury to return a verdict for the nonmoving party.'" Roth v. Norfalco , 651 F.3d 367, 373 (3d Cir. 2011) (citing Lamont v. New Jersey , 637 F.3d 177, 181 (3d Cir. 2011)). Summary judgment will be granted "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." Celotex Corp. v. Catrett , 477 U.S. 317, 322 (1986).
B. Justiciability of Count I and Count II of Plaintiffs' Complaint
Count I and Count II of Plaintiffs' complaint asks us to declare the lease agreement terminated. We raise sua sponte the issue of mootness and find that these claims must be dismissed for want of jurisdiction.
Pursuant to Article III of the Constitution, federal courts only have jurisdiction over "cases" or "controversies." U.S. CONST. art. III. When a case or controversy exists at the time litigation is commenced, but that controversy ceases during the pendency of the litigation, a federal court must dismiss the action for lack of jurisdiction. See, e.g., Tucker v. Phyfer , 819 F.2d 1030, 1033 (11th Cir. 1987). A case or controversy is no longer "live" if the passage of time has caused the dispute to lose its adversarial character and the conditions are not likely to recur. City of Erie v. Pap's A.M. , 529 U.S. 277, 287 (2000).
Here, Plaintiffs' claims seeking declaratory judgment are moot. In their complaint, Plaintiffs assert that the lease expired on February 20, 2008. In response, Defendant SWEPI argues that the lease ended on February 19, 2014. Regardless of which is correct, the lease is already terminated. Thus, the passage of time has caused Plaintiffs' claims seeking declaratory judgment to lose its adversarial character, and no live case or controversy exits with ...