and may please the court my name is overland and i'm here on behalf of the defendants this case raises several questions of st impression of our decision of the west virginia supreme court of appeals of the state of tarting we think there are three ways respectfully to decide this case st because the parties we the implied duty market for the life of police tony simply has no application here nd even if its requirements were satisfied and rd in this court could instead certify to the west virginia supreme court of appeals collets this case reached several questions of st impression and the west virginia supreme court of appeals has expressly card call tawny into question your yes your honor of those three avenues by the plaintiffs that narrow the issues the st is that you can see that tony is premised on the pipe duty to bring gas to market and then secondly they concede that the two party was in fact waive or at least part of the life of the lease so the question on this for the court is whether that waiver extends into the current period that we're in and we think the answer to that is clear the operative language any extension of term of this is and so the three reasons are one i think any extension of time of this lease on its face refers to the lease tara which is defined as that uses specifically that phrase extension of primary term so i think when the drafters want to say about the new house say it and then rd i think the consequences of the district court's reading and the plaintiff's logic don't make a lot of sense their view is that if i do he was waived only during the primary term and any extension of that primary target it springs back to life in the current period or the secondary continuing term and there's really no logical reason why an operator would agree to something like that but i do think that yes your honor can i just ask you a quick question about the language that that you were just quoting within the primary term or any extension of term of this lease it looked to me like there was a word missing between of and term shouldn't it be something like any extension of the term or any extension of this term or any is there is there a word  missing i don't think so you're i think you put your finger on an important point i think the fact it doesn't say any extension of a term or that term i think what it's trying to say is term of this lease and i think term of this lease is admittedly of somewhat awkward and more wordy way of saying the lease is term right so like a child of this father the father's child i think that's why there is no article there whether it's these various conditions come to pass and it actually goes on to say that you know one of the conditions is true with sort of subsumes within the concept of the generic lease term these more specific ideas of primary and secondary terms so i think there are to answer your question i think that actually was intentional i think what it's doing is it is and i will admit freely that is a somewhat awkward way of saying  you look at just that plain language in that clause it's very clear that the implied covenant has been waived not just for the primary term as the plaintiffs concede but for the full life of the lease and if that's true because tolerate actually when it was answering the sort of fight question actually reframe the question to incorporate the implied duty as they promised to the question it was answering it says in light of this implied duty is this language that's at issue here ambiguous and so why yes here are well i mean it seems to me that implied duty or not that once the lessee does begin to market the lease market the  obviously concepts of notice are important here and it's important that it's clear from the lease that the parties agree to share the costs what those costs would be and how you would calculate this cost as you as you point out your own up to our point on the implied duties i think because ultimately the question that's raised by the district court's opinion here and by the plaintiffs is that there is that this lease fails the requirements of tony i don't think the requirements of tunning which put a thumb on the scale favor of requiring extra clarity i don't think this requirements apply but we can your honor yes your honor i just i think i'm asking the same question but i i had the same question i want to make sure i understand the answer assuming that the implied covenant has been waived right it's not your position that that automatically shifts post post production costs over to the landowner it just gets you out of sort of a clear statement role and now you just look at the contract to see if the intent is clear that the landowner is going to bear these costs is that right yes you are that's right that's right i think it makes that clear statement rule away and so to the extent that the district court relied on that which i think it did to impose this very very specific and onerous requirement that particular thing mathematical or not i think that goes away and i think when you look at the terms of the contract which which i agree judge he is you do have to obviously look at those terms i think it is clear that the parties agreed there's no dispute here if we just want to talk about it since i think it makes sense just to move into the framework of tony i think there's no dispute here as to problem one that the parties agree and that there's fish and notice in the contract that they would share post production costs the real action here is on prong three d as you referred to this question of of the method is there's enough here that indicates the math and i think it's important just to take a pause here and point out that in the distant district court and the plaintiffs are before this at this point complaining about two different things the district courts  seem to be with whether there was enough in the contract to indicate the method of calculating the bucket that constitutes post production costs what is that the plaintiff's brief seems to have abandoned that and instead their complaint is about whether the lease has enough to give notice of the fractional share of that bucket now will be borne by the plaintiffs or the landowner and i think we can turn to that  st the plaintiff's complaint i think that's all this court needs to reach given the way that they've decided to plead the issue here and they they concede that this formula that we articulate at page ten of our brief that sets forth how you get to the fractional share of the post production cost would be enough and they say that a couple places in their brief that that would be enough but they say it can't be found in the leases terms but i think your honor as we point out in our reply brief it can be very easily from three provisions of the contract the st is the provision that discusses the royalty and that says that the royalty is going to be fourteen percent the gross minus the post production so you do the it's basic arithmetic here that means we're one thousand percent of the post production  then you look at the provision that's in total payment reductions and that is the provision to account for the possibility that a plaintiff may not own the entirety of a piece of land and all it says is in that case you get whatever proportional share of the royalty that is equal to the proportional share of your ownership of the land and so that's x percentage times y percentage and then the  fraction comes from the utilization and cooling provision which is similar to the payment reduction provision that's the one that says that if you who will be very various pieces of land together of course you're only going to be at the royal a proportionate share of your section of the pool so that's another pression that's call it z percent and that's it and least i think clearly articulate those three fractions and you multiply them together and that gives you the ultimate fractional share and i think you got to answer your question directly as i think that that with or without tani if sufficient notice of how the method how are you going to is all so clear as to how it should be just term and why is it that in your brief you argue that tani establishes a standard that no what i think what we were arguing is that the district court's view of the sort of mathematical precision that is required that reading of toddy could not be as housewives because you cannot calculate at the outset specifically what they're going to be required to pay in terms of post production costs i think what a method is referring to is something that a little bit of a higher level i think things that are methods are again the arguments come the plaintiffs complaint is about whether the fractional share is clear but in terms of the district court's complaint is there enough here to demonstrate how you're going to calculate that that bucket that constitutes post production cost i think there's i think it's there and i think there's two ways that articulated in the lease one is for post production costs that are contracted out to a rd party and the other method is for post production costs where the operator uses its own infrastructure as to the st part post production cost done by rd party what it says is all costs and expenses relating to these various things separation transplant supporting treating process but the method is all and as i said i think that that's a legitimate method another method could be half another method could be use its own infrastructure to do these various things and if it uses its own infrastructure then the method is reasonable amortization reasonable depreciation a reasonable rate of return and again those are methods i think if you were t the landowner exactly what the costs are going to be these are methods these are mathematical methods all song proportional reasonable amortization and reasonable depreciation so i think as to both pieces of this whether it's the district court concern about whether the lease has enough to indicate the method to calculate the bucket or post production costs or point it's new concern about whether the lease has enough to indicate the method of calculating the fractional share that is born by the landowners i think both of those are clear from the lease and i see my time yes your honor i think you i think you hit on this at the very end overlaying all of this is obviously that the landowners are left without a remedy with respect to these costs if they feel that they are excessive because there's an element of reasonableness to all of this right that you would have to satisfy and that we can litigate that but the the math is there since the question of whether or not the not coming across all that clear but we can hear you so i just wanted to let you know that i just want to say i don't believe that there's anything controversial or confusing about what the district court did i don't think there's really any conflict between what we're arguing in our briefs and what the district court did blow the district court did exactly what it was supposed to do under west virginia law stating in diversity it was required to take the clear controlling authority and apply it and i think they did that in this case now there's a question about that lease development clause and whether there's some wording missing there in that extension of term there's a couple of reasons why i think that at best that lead to development clause language is ambiguous the st be you've got the statement that there's going to be no implied covenants quickly followed by a nd statement that says there will be no forfeiture terminations or expiration obviously if there's no implied governance you're not going to have those other things what is the purpose of the nd sen the reasonable reading of that nd sentence is that those things do apply at some point and i think this gets into that confusion there about whether there's any word missing in that extension of term the problem or a term of this lease and the primary term under all leases is a situation where this oil and gas company has paid for a right to delay its decisions as to whether it's going to make operation so it certainly makes sense and it's reasonable that they would not want to have any of these duty implied duties or other obligations during that time but once they decide to take those operations and move forward d and this lease moves into what is called the secondary term those obligations would jump back in there's nothing confusing about that it certainly makes sense that when this lease goes into the secondary term they've got a different set of obligations because at that point they are required to act they are required to do things they are not required to do anything during that primary term during that primary term the lease we do expire at the end of the date will switch over to the secondary term when the certain operations have taken place council talked about extension of primary term and the lease term language talking about going beyond this you might have a question  that a reason to certify all of this or at least the question of tani's import and meaning to the west virginia supreme court rather than have us muck around in what is a uniquely west virginia issue i don't think that it does because the west virginia supreme court in the leggett decision specifically said well monotonic are unaffected they're still valid law on those points as it stands in west virginia at this point there's this issue of certifying questions is whether or not there's no controlling our authority or confusing controls the wording there is no i don't think there should be any dispute the tawny is still the controlling law on this is you in west virginia whether or not the west virginia supreme court might do something else in the future is a different question and there was certainly a whole lot of history into how the leg a decision came about based on rehearing and elections and a lot of things going on politically here but the including nonpartisan elections but the district court took the law from tony the law and leg it that said well men and connie are unaffected and applied it there's no reason that this court can't do the exact same thing i would remind the court that we followed this case in state court we were in the west virginia state court system the defendants remove this case to the federal court system they asked for the federal court jurisdiction they don't to do and they never asked judge bailey to attempt to certify this question it was only after they got the ruling that they didn't like that they asked for certification the fact is they didn't just click to do that does that mean that we can't certify the question although it certainly does not you have the discretion to do that as well but i think if you look at the certification act and the reason for those rulings it's when you have this issue and there's no controlling authority that applies here you have very specific not very complicated among various landowners and that's the problem here is that the lease didn't make that clear is that your position is that is correct it is our position that under tony that rd message the rd step is to indicate the method of calculating the amount to be deducted so they want to point at this language and say all costs and then this list of costs the question is not that they're going to take out costs cos the question under tony was how are you actually going to allocate and apportion that cost to this individual landowner and that is what is missing from this a lease agreement they want to point to this paragraph twelve paragraph k the payment reduction clause which absolutely never mentions costs at all it really only applies for situations where an owner may or may not actually own the full mineral interest sale later title search shows that they only own fifty percent even though you signed a lease for one hundred percent they're not going to pay you one hundred percent they're only going to pay you on your fifty percent they look at the  owners are going to share the revenue from these wells based on that proportion the dictionary definition of revenue is even a total amount so i don't think there's anything in those two clauses that get them to this idea that this lease clearly says that they're going to proportionately share costs had they just put it in there that would have been enough had they put in the lease the language that that mr rickman put in his e mail to my client when my client questioned that would have been  owner and no pooling of costs or anything then why wouldn't it be enough if you just said all costs like the way i'm distributing the costs is the gas company pays nine dollars and you land owner pay one hundred percent that seems like it would be enough i don't think that it will because i think all was still the descriptor of the types of costs it doesn't get you to the method of our going to it if it is one hundred percent the way the distribution will be as follows the gas company pays zero percent of the post production costs and you land owner pay one hundred percent that would be fine right i would think under tani that might actually apply ok of them i can't get enough but that's not to say that we have here i understand but you're so the only problem you see here under tony is that you don't think it's clear enough how the costs will be apportioned among various landowners well and how it's specifically going to be apportioned to this landowner too because it doesn't they never actually says we're going to charge you fourteen percent of the cost that's more language that they're trying to draw and pursue from other parts of the lease so they're not same we're going to pull all costs what he said today was we're going to fourteen percent of all costs it never really even says that in the leas is a specific case that has interpreted that but i don't think that that means it needs interpretation it's a pretty clear statement from the west virginia supreme court it really didn't use complicated language i think i thank you all have spent a lot of time in litigation on what's a you say is a pretty clear statement it's not that clear to me still what we just heard here i mean the district court right it seems like the district court had something very different in mind as i read the district court and it did seem to be saying like it's not enough to say how you're going to apportion costs like i don't know what exactly the district court had in mind but i think it was more like tell us how you're going to figure out how much it will cost to do these things that you've listed in two dollars i thought the district court was reading it differently than both of you are reading it today but you think the district court was reading it the same way you're reading it today i do i don't see the i don't see discrepancy i do believe that the district court was mainly to concerned with determining how you're going to come up with this amount that's ultimately going to be deducted from the royalty share and i don't think  our statement of how that is done in the brief is really inconsistent with this record said i don't think it always is it's about uniforms and employee meals and stuff like that you think all of that went to how are we going to know in a range met how much each landowner pays i think that was just a more of a general statement of the uncertainty that lies in these issues with post production costs you've got an asset that this royalty owner owns they d enter into what is essentially a business agreement to allow someone else to produce that and now this rd party is going to take all these deductions out and tell and not really give you any accounting as to what those things actually are or an explanation in advance as to how they're going to do that so i don't think that that was a general a specific statement in this case i'm worried that they're going to take out uniform costs and we don't know how they're going to do that i think it was just more of a general statement of that's the type of problems you get into in these cases when you have the gas companies guarding the henhouse on these costs and expenses and you getting back to that rd point of tawney you know the language there was just to indicate the method of calculating the amount to be conducted i don't believe that that's very confusing language the district court looked at the dictionary definitions of message and calculating ignore those dictionary definitions while looking just at the dictionary definition of indicate i think when you combine those three dictionary definitions together you get an even more clear statement that what what wally looking for is here is a process a procedure a technique for how you're going to mathematically to form in this performance i would agree that at the time you enter this least you're not going to know what exactly that decimal number is to be able to make that final calculation but you at least should stay in the least that's how we're going to do it we're going to take your decimal interest of ownership multiplied by the costs and that's going to be your share of what you have to pay in this case that is not an onerous state something that's easy to me and they took steps to do so in an e mail to my client and in their brief all they had to do was actually state that in the lease agreement and they would have been fine but they did not do that and it's a failure of drafting on their part and to the extent there is any ambiguity that goes against them it's mcgraw just so  i'm clear about what your position is here so your view is that your girl your client could reasonably or doesn't really know whether or not the lessee in this case intended to the duc all some or part of the cost is that argument that is part of the army as writers so when they've made a disagreement there's something that said they're going to take out all these costs there's no explanation as to how that's actually going to how to get to that amount of this is the gross proceeds received but alessi from the sale minus post production costs incurred by let's see that would suggest that there is no fractional allocation of costs the entire amount of the cost and then s royalty but then with a deduction of all the costs i think that's certainly part of the position they're taking today that they can take out all of these costs but as i said before i don't think this lease ever goes on to fully explain that they're only going to take out a they're going to apportion those costs to the landowner in proportion to what their ownership interest is in this unit because you're not talking about one well on one piece of property you're talking about a couple wells covering six hundred acres of property they don't keep expenses as it relates to each individual property they keep expenses as a grows as a whole unit and then they're creating this way to try and allocate that back to the landowners but they never explain to the land owner in the lease agreement that that's what they're doing i think that's where they fall flat under the rd element of tawney which i don't think is very confusing to complicated indicate the method of calculating the amount to be deducted so it's not a calculation of how you get to your royalty payment it's a calculation of how you're going to get to that amount that is deducted to finally get you to your room which again i believe had they included that explanation that they did in the email to my client when he asked about that had that been in the lease agreement that would have been good enough but it's not in the lease agreement as try as they might to reach out to these other provisions of the lease those other provisions of the lease never mention costs they never make this assertion that they're going to split this up proportionately those other provisions are all talking about how the owners are going to get paid whether or not they own the full interest or how that owner's going to share the revenue from the wells with all the other owners whether or not the well is actually located on their property or not  and your question about whether there is controlling forty here and i think i heard my friend say there is no controlling authority on the meaning of indicate the method and i think the important way to think about this is tony in this case is like a west virginia statute that's being applied tony is the original thing that's being applied there is no case that interprets that statute in this case that rule in the case and the only thing we know from the west virginia supreme court about harney is that they think a majority of that court thinks that it's faulty and suggests that they may even want an opportunity to overrule it i will also note we do think that wherever the line is indicate a method that we we are well past that which is why we think it's clear judge stacker but mr mcgraw is point i don't think it's really that obvious where that line is there are two district courts in west virginia that have disagreed about the meaning of indicate the method judge bailey in the decision below specifically disagreed with judge goodwin in the w w mcdonald case out of the silent district as to the method judge the as i think you have you could  wish i had said it is as clearly as you have that's exactly what we think that at least makes clear and if i could scan up i think about things in a mathematical way but i think really it's a formula where you get the pieces from the weights what police says is that the royalty is the gross proceeds minus the post production costs how do we get the post production costs as part of that formula it's all of the rd party whose production costs and expenses for the various things that are listed are treating separating transportation and then it's if the landowner sorry the operator uses  infrastructure it's reasonable amaryl asian depreciation that's how you get to that number the post production cost that you subtract from the gross proceeds and then song portion of that is the world how do you figure out that portion fourteen percent times if there is some fractional share of the property and then times if there is some proportionate share of because of calling and go eat mr mcgraw my friend says that neither the payment reduction provision or the utilization of cooling provisions were referred to cos it's true they don't say cost but what they report to is world and they say in both places royalties this is the paper reduction provision paragraph percentage of the royalty if their song ownership that's less than the whole utilization palling same thing less or agrees to accept and receive out of the production or the revenue realized from the production of such  proportional share of the royalty and it goes understand as the number of leasehold included in the unit beers to the total number of acres in the pool so what we're talking about is again if you're part of a bigger pool you there is any question at all about what indicate the method things means i think the west virginia supreme court of appeals should be the one to weigh thank you neal thank you both for your actual arguments here today the cases been submitted  we would typically come down from the bench and greet you personally obviously we cannot do that here today but we very much appreciate your being here and helping us to do this this work that we're doing trying to do in a very