United States District Court, M.D. Pennsylvania
CHERYL B. CANFIELD, Plaintiff,
STATOIL USA ONSHORE PROPERTIES INC., Defendant.
MALACHY E. MANNION UNITED STATES DISTRICT JUDGE
before the court is a motion for reconsideration filed by
plaintiff Cheryl B. Canfield (“Canfield”). (Doc.
75). Canfield requests that this court reconsider
its March 22, 2017 order and memorandum. (Docs.
72-73). Specifically, Canfield requests
that this court reconsider dismissing the first and second
claim for relief in Canfield's complaint, (Doc.
1), against remaining defendant Statoil USA Onshore
Properties, Inc. (“SOP”). Based on the foregoing,
Canfield's motion is DENIED.
owns property in the Marcellus Shale region within
Pennsylvania. On May 6, 2008, Canfield entered into an oil
and gas lease with Cabot Oil & Gas Corporation
(“Cabot Oil”) for the exploration of oil and
natural gas on her land. Her lease was subsequently acquired,
in part, by defendant SOP. Her dispute with SOP primarily
revolves around the royalty clause in her lease agreement.
complaint, Canfield challenged SOP's calculation of
royalties. SOP's calculation is based on the sale of
Canfield's natural gas at the well, with that sale price
calculated using an index price. SOP takes title to its
in-kind percentage of the natural gas extracted at the well
and immediately sells the natural gas to an affiliate,
Statoil Natural Gas LLC (“SNG”), pursuant to an
agreement between the two entities. Under this agreement, SNG
takes title to the raw product at the wellhead and then
contracts with third parties for post-production services.
SNG also contracts with pipeline companies to transport the
natural gas through the interstate pipeline system and,
ultimately, resells the final product to third-party buyers
at receipt/delivery gates along the interstate system. Thus,
SOP holds the lease interests for immediate sale and SNG
serves as a marketing company, taking title at the well,
transforming the product into a finished one, and then
selling the post-production product to distribution
companies, industrial customers, and power generators
issue in this action is the agreement between SOP and SNG for
the price of the raw natural gas at the wellhead where title
is transferred from SOP to SNG. Their agreement fixes the
price of the natural gas to a uniform hub price or index
price for natural gas, regardless of whether the natural gas
is ever delivered to that particular hub on the interstate
pipeline system. These index prices are influential in
natural gas markets and purport to represent the price of
natural gas at different delivery points in the country. In
or around April 2010, SOP and SNG began using a chosen index
price as opposed to what Canfield described as an
“actual negotiated price.” (Doc. 1
¶26). SOP does not dispute that it fixes the price at
the wellhead to an index price.
January 15, 2016, Canfield filed a putative class action
complaint against SOP, SNG, and the indirect parent of these
entities, Statoil ASA. Canfield brought six separate claims
against SOP specifically. In her first claim, Canfield
alleged that SOP breached the express terms of the royalty
clause in her lease agreement by using an index price. In her
second claim, Canfield alleged that SOP breached the lease by
engaging in an affiliate sale with SNG. In her fourth claim,
Canfield alleged that SOP breached the implied covenant of
good faith and fair dealing in the lease by engaging in an
affiliate sale. In this claim, she also alleged that SOP
“had an obligation to use reasonable best efforts to
market the gas to achieve the best price available.”
(Id. ¶50). The court construed this fourth
claim as a duty of good faith claim and/or a duty to market
claim. Canfield also alleged civil conspiracy (third claim)
and unjust enrichment (fifth claim). She also requested an
accounting as a specific form of relief (seventh claim).
9, 2016, SNG filed a motion to dismiss Canfield's
complaint. (Doc. 25). Also on July 9, 2016, SOP and
Statoil ASA, collectively, filed a motion to dismiss. (Doc.
31). On March 22, 2017, the court granted SNG's
motion and dismissed all claims against SNG with prejudice.
The court granted in part and denied in part SOP's and
Statoil ASA's joint motion. The court dismissed all
claims against Statoil ASA with prejudice, finding that the
entity was a Norwegian entity immune from suit under the
Foreign Sovereign Immunities Act of 1976
(“FSIA”), Pub. L. No. 94-583, 90 Stat.
2891 (codified at and amending scattered sections of 28
U.S.C.). The court dismissed some, but not all of the claims
against SOP, the court dismissed with prejudice the first,
second, third, fifth, and sixth claims for relief.
(See Doc. 73). The court allowed the
implied breach claim, the fourth claim, to proceed. The court
determined that Canfield had pled a plausible breach of the
implied duty to market, though not a plausible good faith
claim under Pennsylvania law. In addition, because Canfield
has asserted a plausible contract claim the court allowed her
request for an accounting, her seventh claim, to proceed.
April 5, 2017, Canfield filed the current motion for
reconsideration and brief in support. (Docs.
75-76). On April 26, 2017, after requesting
and receiving an extension of time, SOP filed a brief in
opposition. (Doc. 81). Canfield filed a reply on May
10, 2017, (Doc. 82), rendering her motion ripe for
review. Canfield specifically seeks reconsideration of the
court's March 22, 2017 decision with respect to her
express breach of contract claims-her first and second claims
for relief. In the alternative, she seeks reconsideration of
the court's decision to dismiss those claims with
prejudice and requests leave to amend her complaint. SOP
argues that reconsideration is not warranted.
Motions for Reconsideration
motion for reconsideration may be used to seek remediation
for manifest errors of law or fact or to present newly
discovered evidence which, if previously discovered, might
have affected the court's decision. United States el
rel. Schumann v. Astrazeneca Pharmaceuticals, L.P., 769
F.3d 837, 848 (3d Cir. 2014) (citing Max's Seafood
Café v. Quineros, 176 F.3d 669, 677 (3d Cir.
1999)); Harsco Corp. v. Zlotnicki, 779 F.2d 906, 909
(3d Cir. 1985). A party seeking reconsideration must
demonstrate at least one of the following grounds: (1) an
intervening change in the controlling law; (2) the
availability of new evidence that was not available when the
court granted the motion; or (3) the need to correct a clear
error of law or fact or to prevent manifest injustice.
Lazaridis v. Wehmer, 591 F.3d 666, 669 (3d Cir.
2010); Max's Seafood Café, 176 F.3d at
677 (citing North River Ins. Co. v. CIGNA Reinsurance
Co., 52 F.3d 1194, 1218 (3d Cir. 1995)). However,
“[b]ecause federal courts have a strong interest in the
finality of judgments, motions for reconsideration should be
granted sparingly.” Continental Casualty Co. v.
Diversified Indus. Inc., 884 F.Supp. 937, 943 (E.D. Pa.
is generally appropriate in instances where the court has
“misunderstood a party, or has made a decision outside
the adversarial issues presented to the [c]ourt by the
parties, or has made an error not of reasoning, but of
apprehension.” York Int'l Corp. v. Liberty Mut.
Ins. Co., 140 F.Supp.3d 357, 360-61 (3d Cir. 2015)
(quoting Rohrbach v. AT & T Nassau Metals
Corp., 902 F.Supp. 523, 527 (M.D. Pa. 1995)). It may not
be used as a means to reargue unsuccessful theories that were
presented to the court in the context of the matter
previously decided “or as an attempt to relitigate a
point of disagreement between the [c]ourt and the
litigant.” Id. at 361 (quoting Ogden v.
Keystone Residence, 226 F.Supp.2d 588, 606 (M.D. Pa.
2002)). The “motion will not be granted merely because
a party is dissatisfied with the court's ruling, nor will
a court consider repetitive arguments that were previously
asserted and considered.” Frazier v. SCI Med.
Dispensary Doctor 2 Staff Members, No. 1:07-194, 2009
WL 136724, at *2 (M.D. Pa. Jan. 16, 2009) (collecting cases).
Leave to Amend
filing of an amended complaint is governed by Federal
Rule of Civil Procedure 15. Where the time to amend as a
matter of right has expired,  “a party may amend its
pleading only with the opposing party's written consent
or the court's leave.” Fed. R. Civ. P.
15(a)(2). “The court should freely give leave when
justice so requires.” Fed. R. Civ. P. 15(a).
In the spirit of Rule 15, the United States Court of Appeals
for the Third Circuit has adopted a liberal approach to the
amendment of pleadings in order to ensure that “a
particular claim will be decided on the merits rather than on
technicalities.” Dole v. Arco Chem. Co., 921
F.2d 484, 486-87 (3d Cir. 1990).
however, is not automatic. See Dover Steel Co., Inc. v.
Hartford Accident and Indent., 151 F.R.D. 570,
574 (E.D. Pa.1993). Leave to amend will not be granted if
there is “undue delay, bad faith or dilatory motive on
the part of the movant, repeated failure to cure deficiencies
by amendments previously allowed, undue prejudice to the
opposing party by virtue of the allowance of the amendment,
futility of amendment, etc.” Foman v. Davis,
371 U.S. 178, 182 (1962); see also Oran v. Stafford,
226 F.3d 275, 291 (3d Cir. 2000).
court's dismissal of Canfield's first and second
claim for relief with prejudice was premised on futility.
Futility means that the complaint, as amended, would fail to
state a claim upon which relief could be granted. The
standard for assessing futility is the same standard of legal
sufficiency as applied under Federal Rule of Civil
Procedure 12(b)(6). In other words, the District Court
determines futility by taking all pleaded allegations as true
and viewing them in the light most favorable to the
Great W. Mining & Mineral Co. v. Fox Rothschild
LLP, 615 F.3d 159, 175 (3d Cir. 2010) (internal
quotation marks, citations, and original alterations
omitted). If the proposed amendment “is frivolous or
advances a claim or defense that is legally insufficient on
its face, the court may deny leave to amend.”
Harrison Beverage Co. v. Dribeck Imp., Inc., 133
F.R.D. 463, 468 (D.N.J.1990).
challenges the dismissal of her express breach of contract
claims on two primary grounds. First, she alleges that the
court's construction of her lease agreement was
incorrect, an error of law. Canfield proposes a new
interpretation of her lease that was not previously proposed
to the court. Second, she alleges that the court misconstrued
her second claim for relief, a factual error that warrants a
different result ...