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Marbaker v. Statoil USA Onshore Properties, Inc.

United States District Court, M.D. Pennsylvania

June 14, 2018

ALAN MARBAKER; CAROL MARBAKER; JERRY L. CAVALIER; and FRANK HOLDREN Plaintiffs,
v.
STATOIL USA ONSHORE PROPERTIES, INC. f/k/a STATOILHYDRO USA ONSHORE PROPERTIES, INC. Defendant.

          MEMORANDUM

          A. RICHARD CAPUTO UNITED STATES DISTRICT JUDGE

         Presently before this Court is a Motion to Consolidate (Doc. 18) filed by Plaintiffs Alan Marbaker, Carol Marbaker, Jerry L. Cavalier, and Frank Holdren (collectively “Marbaker Plaintiffs”). Specifically, the Marbaker Plaintiffs seek to consolidate this action with one currently pending before Judge Mannion: Canfield v. Statoil USA Onshore Properties, Inc., No. 3:16-CV-85. I will not grant the Marbaker Plaintiffs' Motion because the issues presented in this action are distinct from those before Judge Mannion in Canfield.

         I. Background

         A. The Marbaker Action:

         On April 2, 2015, the Marbaker Plaintiffs filed a class demand and complaint in arbitration against Statoil USA Onshore Properties, Inc. (“Statoil”). There, the Marbaker Plaintiffs alleged that Statoil systematically underpaid oil and gas royalties in a “scheme to enrich” its parent company in violation of its lease agreements. (Doc. 19, at 6.) Concurrent with the arbitration action, these Plaintiffs filed a declaratory action in this Court seeking to determine whether or not the lease agreements permitted class arbitration. See Marbaker v. Statoil USA Onshore Properties, Inc., No. 15-700 (M.D. Pa. 2015). However, that federal action was dismissed without prejudice on June 5, 2015 by stipulation because the parties agreed to enter mediation.[1] Id.

         On August 25, 2017, Plaintiffs re-filed their federal declaratory action (“Marbaker Action”). The Marbaker Plaintiffs seek, yet again, to determine whether they can proceed with class arbitration.

         B. The Canfield Action:

         In January of 2016, Statoil was sued by a second set of leaseholders (“Canfield Plaintiffs”) who also alleged that Statoil engaged in conduct that resulted in the systematic underpayment of royalties. See Canfield v. Statoil USA Onshore Properties, Inc., No. 16-85 (M.D. Pa. 2016). The conduct alleged by the Canfield Plaintiffs mirrors the averments contained in the Marbaker Plaintiffs' arbitration complaint. The Canfield Plaintiffs, unlike the Marbaker Plaintiffs, were able to proceed in federal court because their leases did not contain an arbitration clause.

         Statoil moved to dismiss this action. Id. Judge Mannion, presiding over Canfield, dismissed the majority of the claims alleged.[2] Id. However, the Canfield Plaintiffs were left with at least one viable claim. This triggered settlement discussions between Statoil and the Canfield Plaintiffs. By October of 2017, the Canfield Plaintiffs had engaged in robust settlement negotiations and reached an agreement in principle to settle the case. And, on December 1, 2017 Statoil and the Canfield Plaintiffs notified Judge Mannion that they had reached a preliminary, class-wide settlement. Today, there is an open Motion for Preliminary Approval of the proposed settlement.[3] Id.

         C. Motion to ConsoliDated:

         On March 30, 2018, the Marbaker Plaintiffs filed a Motion to Consolidate the Marbaker and Canfield actions. Statoil opposes this Motion.

         This Motion has been fully briefed and is ripe for review.

         II. Discussion

         A. Consolidation of the Marbaker and Canfield ...


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