please the court i'm nathan kia i'm here for the appellants objectors below the gonzales as and the bonds we've asked you to review a class action settlement that is extremely unique it's a settlement where the plaintiffs are paying the defendants substantially more than they would have ever been able to receive under the claims that were originally made and it starts from the concept of the original window or settlement where these subclass two and subclass three parties are category two and category three leases under the new subclass had fought originally against williams to say you cannot take these gathering deductions and williams agreed in that original settlement to pay back the gathering adoptions it had taken back in two for this gathering amounts at that time then the question in that original action was what are we going to do going forward and the parties were not able to do is to agree what they would do going forward in other words from two thousand and nine on but they were repaid for everything that had been taken up to that point then there was this period of time where the operator did not take those deductions then a successor came in that was  began sporadically taking some of deductions from some individuals and then recently t p steps in and not only decides it's going to take these deductions it's going to triple from zero dollars twenty one cents to  originalist say there was a dispute about what proper gathering expenses were for those individuals yes that would be proper to say hotly contested dispute well in the two nine they agreed to pay the mts back and we agreed our right is long as you don't take them there won't be a dispute about it if you start taking him again then royalty owners you get to challenge it so he doesn't say that though doesn't that it does say that that's i mean he says you can challenge him but as a say that you had sort of this if you don't take him we're fine if you start taking him then you could challenge it doesn't it just say you know what we're not coming to any conclusion on these and in the future you can interpretation is the underlying you agree ments right that's right and the underlining cream and contemplated that t p could take deductions regarding transportation and natural gas from the mouth of the well to the point of sale and so that's what ultimately is the ambiguous term everyone's trying to interpret right well no at the time of the two thousand and nine settlement and in that settlement if you look at one fifteen if you look at the definition of deductions there's a clear distinction between gathering and transportation gathering is that stuff that happens locally prior to the gas being processed transportation happens down the mainline pipelines but that's not what the testimony was right i mean there was clearly it is a dispute about the interpretation transportation and gathering in ms german testified right and at the fairness hearing she said she said that she thought that the category that the rights of class one had a very weak claim based on her interpretation of gathering yeah but she she testified to that that's correct ok so there was some dispute about what was in compassed in gathering what was in compassed and transportation and what the subclass would be intitled is that fair at some point there was a dispute and it didn't come up in the even in the nd half and intil their nd amended complaint which was filed twenty one dollars days before that fairness hearing so there wasn't a dispute in terms of was the lindauer settlement breached originally it came up because t p said well if we're going to pay back these breaches under the lindauer settlement then hey we want you to agree to close this gap here this thing we were not allowed to do without challenge under the original settlement agreement you could agree to this amendment and so twenty one dollars days before they filed a nd amended complaint after notices provided after the opt out period they filed this thing saying we're going to mandolin our settlement to allow these deductions that previously could have been challenged and the effect that has is substantial on those subclass one member because not only did it let them keep the deductions they had just started taken again it let them say well when debbie p x was there we could recruit those two were going to apply that amount to the southern route so they got to take those two and it said and for now in perpetuity we can take those deductions so they recruit by the day of the distribution of this settlement they had already been cooped all of the settlement amount from the subclass one lease they were ahead of the game that's what so inappropriate about the subtle moment and how odd it is and you know if you look at it why didn't anybody object sooner sooner than twenty one days before the fairness hearing out in the we even know what these people are doing you know they've negotiated this deal that hammers the subclass one they have no class representatives who represent the category two or three people on a real basis you know where they really have an emphasis for example if you have multiple leases  they may have gotten some benefit from their subclass to subclass three subclass four but the subclass one people the people that just have that all they got was killed under this deal and continue to some of them haven't received royalty payments for months because they owe t p that's the settlement of the six hundred and seven class members only four objected is that right that's correct out some of those that didn't object with a subclass one absolutely and you know why they didn't object take a look at the notice the notice doesn't say we're going to give you a dollar today and then you all of us on the day of distribution ten dollars it doesn't say that there's no indication anywhere that they owe t p anything you can't figure that out from the notice if you haven't figured out from the statements that were made they didn't even know at the fairness hearing how much was owed when did t e p go from twenty one no if you look at nine a and nine b you can't tell the amount you can't tell how that's going to affect you if you're brought the owner you can't tell that do you ultimately tell them what's the st tip off where you'd have to look you know one of the questions is how much did they not take that they now say they can tell me what that requires forensic accounting when the person who was able to figure out how this was going to affect the subclass one owners was the accountant who testified at the fairness hearing how outrageous the settlement agreement is if you like if you got a notice in a class action we're going to send you ten dollars as to the fact that had they chosen not to not to settle they had a huge they were facing huge risk of being potentially worse off you know that they couldn't be worse off there wasn't a counter claim here for images they could have been worse off in this case the way the case was pled the they would have been better off had these claims never been brought in that nd amended complaint they couldn't be worse off and miss germany even said she do they were worse off she said basically well it's good for the group as a whole well no it's good for the group as a whole if you're not in subclass one if you're  it's not good and it never will be good because they amended the lindauer settlement you know when you're talking about where there should be you know as part of the reason that it's nice to keep it in the same court the  original court would have understood what was happening here would have understood that original agreement was in of that different judge and state court to have the wrong no the original judge that that heard the motion of enforcement to do something here and to set up the findings and to address these issues that were raised that didn't happen nobody was watching out for these people and they got sold out did you challenge the adequacy of the representation below by of the class representatives yes he did yes and the judge ruled and said they're adequate but didn't say why i didn't make any findings to support that you made these arguments it's a you made these arguments below yes well  was the representative was ms german right yes and the judge ruled that she she was a member of a class one grat yes and so that she was adequately position to represent that subclass well she did not hold a category three lease which was of the objectors own category three that's correct so i mean it's hard but we're not saying we're representing everywhere it's saying you know these people are so hold out you know and she she also said in admitted that this was just good for the whole you know that she wasn't there watching out for subclass one she had other leases too and she was looking at those rather than how it would just affect this and the gun incentive payment you know so it didn't wipe that out so you're saying they were sold out but they're not saying they were sold well that individual did not say she well she knew that her class one lease or  out she thought it was ok that that my class one leases which were minor part of her holdings were sold out for the good of the whole while she also testified i mean it was more than that she also testified that she thought the  argument was very weak she testified to that that's correct ok so in looking any you know one of the things it's difficult is that we we look at these things under what are called the to now factors of four factor test and it really seems to be at odds with how it was briefed on you know so when i'm looking at that you have to consider all of those things you have whether there was an argument the strength of the argument whether there was something to be gained by settling adequate representation we look at whether other members of the class opted out and are objecting all of those things go into the assessment of whether the settlement was reasonable but i would say if you looked at the case that was actually litigated back in two thousand and nine those people got paid so you can't say they have paid all the deductions were taken so you can't say it had no value that it was worthless and there's a pending action trying to deal with those same claims now as well so you can't say that just because one class representative  feel had a conflict of interest because she had such a small interest in that anyway that testimony controls the rest and i'd like to reserve a teeny bit of time if i may thinking have please the court i'm george barton arguing on behalf of the at least for this appeal i want to reference pacifically the types of oil to answer minutes that were involved in category two category three the subclass one leases just to emphasize the fact that there were three hundred and six leases that were part of subclass one approximately ninety one percent of those leases t all of the costs of transporting the gas from the mouth of the well to the point of sale so that was the predominant royalty provision in subclass two and subclass three but isn't there a dispute about what transport means well actually there was not i mean there was a dispute from the sample of the objectors but after the that's what a dispute is and where yes there was a stand there was a  deductions for fuel and they took deductions for processing and they reflected those deductions on the royalty check sub statements that were sent to the members of subclass one all the way from situ one thousand and nine until we filed the sceptic action without anybody objecting without any member of subclass one objecting to those that actions were being taken but on under the lindauer settlement they had a right to object right they had a right to object i mean they could wait for so long as they didn't run out of statute of limitations they could later come in and say that's true we're exercising our right under the lindauer settlement to sue for reimbursement of the experience expenses you've improperly with al from our royalty checks that's right they have they had a right to challenge so it really came down to in terms of the strength of the claims that we were asserting you had to look at the language  and the testimony was from the witnesses that testified both mr sampson he testified that what you're talking about here is there's three legs of transportation in the natural gas industry and the st leg of  transportation process is transporting the gas from the mouth of the well to the inlet of the processing plant and the only way that you do that is through a gathering system that's the only way it gets done so trying to construct an argument as to how you could have you know condense a court then after that world to provision that the gathering costs that actions were exempted from that were not part of that were not part of the process of transporting the gas from the mouth of the well to the to the inlet of the plant we found to be very challenging that that was a claim that was likely in reality that would be very disagree if it had had that language you could disagree about what transporting that's right and only three of the leases had customary transportation charges as opposed to mouth of the well to the point  and you know that that was the essence of what we're trying to deal with and so what we did we have valuated all you know we looked at where all of all the dollar numbers were for the gathering deductions for the fuel deductions and fuel is really part of the gathering it's just the fuel is used to run the compressors so that because you have to compress the gas when it's being transported from the mouth of the well to the end of the plant so we had a very challenging claim but we looked at all of these and we made a barrie we had a very long winded negotiation with the council for to e p a mr crisman but what how you going to resolve this in a way that's pair and reasonable and their position was look under the plain language of this world keepers and we prevail on the gathering cause we prevail on the fuel cost but notwithstanding that and not withstanding the challenges we had in trying to you know trying to get any recovery on that claim we focused in on ok you've got processing costs of actions which are disputed but which are not part of the transportation from the mouth of the gas well to the point of sale so we alternately got a settlement were not only did they agree to pay fifty percent of the processing cost actions that they have been taking with respect to that subclass one members in addition to that they also agreed to pay forty percent of the fuel costs the dutch the so that  amounted to a settlement of four hundred and fifty four thousand dollars which we believe that class representative for subclass one who testified at the hearing believed was a fair and reasonable settlement because of that if the express the coupe meant part of it according to mr heber when this settlement was executed and the notice was given that you're going to receive this much in  fact what was happening is because of the right of recruitment they were actually going to owe money is that correct it's not correct at all as to subclass one and mr sampson who testified at the fairness hearing specifically address that he was asked on direct examination did you and he was the accountant for two e p their accounting expert who looked at all of the royalty counting data and he specifically was asked that question what did you what did  to what impact the recoupment had on the members of subclass one and he testified in his direct examination that was less than a one thousand dollars and we said in our brief response rate there's just no validity to that and that's what mr simpson sesa money was with respect to that subject as the person who was the most knowledgeable about all of this royalty accounting he had had a chance to look at that and he simply did not support that that was not true he said it was less than a one thousand dollars that was his testimony that was in our response rate so i don't know that i don't spend per claimant or less than a one thousand as compared to the four hundred and forty four thousand settlement amount no it was less than a one thousand the final approval they and as one of the thing i want to say here this whole issue about subclass three scuse me category three of which was part of subclass one it's true that the category three royalty answer meant had a provision also said mouth of the well to the point of sale but it further provided that provided that such  transport services are provided by a rd party but the evidence was that all of these gathering services were in fact being provided by rd parties and the objectors did not raise this issue of  purported conflict of interest between you know involving these category three leases being part of subclass one in any of the briefs that they filed with respect to and they filed three of they filed three make any allegation that there was a a conflict of interest between the class representatives for subclass one and the category three they didn't make any allegation as to that at the final fairness and as we said in our brief the issue was some please wait had the evidence had the issue been properly raised what we would have submitted and the evidence at the hearing was that st of all we had looked at all of these written agreements between w p a xor t e p and these gathering services they were all rd parties the only thing they ever said about it was which after all of the evidence was presented at the final fairness here and one of the rd party get a service providers which was way i'm skilled services but the facts with respect to that were that bad affiliated relationship existed for only six months out of this eight month period of the the claim period which started in july of two thousand and eleven and extended to june of two thousand and eighteen after june you're telling us your argument you would have made had they raised the subject right that is correct so i don't it's really not relevant at this point which is not the record right it's well the issue was never properly raised and i stand but i just want to make sure i'm understanding that you're making an argument now that you didn't have a chance to make below that's right but i'm just trying to clarify the facts the facts were that this affiliated relationship between way m's and its affiliate ended at the beginning of january two thousand and twelve because whims was spun off from its affiliate as of early jan early two thousand and twelve so from that point forward all of the gathering services were being provided by rd party and it sees that we're not affiliated with or to e p and i say that because there simply was no basis for the contention that there was a conflict of interest between the class representatives that being septic and white river a class representative for subclass one and those were the owners who had those category three winds and it was never properly raised and and so the district court had had no basis to make any evaluation of that issue with that was never argued except for a passing reference at the very end of the evidence at the class certification hearing without submitting any evidence on the issue so i'm just trying to clarify what the facts  with respect to that issue because that was a major issue that they race in their opening very the remaining issues that exist here i would tell you this settlement was a good settlement i cost of actions all of that added up to four hundred and fifty four thousand dollars for subclass one even then light of this difficult role to provision and not only that with respect to the future it they they agreed to disagree back in two thousand and nine but at this point they entered into a settlement agreement that that permitted to e p a to take the gathering in fuel deductions which they always said under this world and they had an absolute right to take it and frankly there's no case anywhere that i've seen that would suggest otherwise and and but they also agreed to limitations on their processing cost reduction it's because unlike in the lead our settlement agreement they now agreed to be subject to a limitation under which they could only deduct an amount of processing costs of actions which was the same as what the category five are getting where they they get there are limited to a processing cost reduction which is one dollar rd of the value of the natural gas liquids there was of the so so of what was in lend hours per paragraph four four which applied to the them at the point of settlement t it t e p was taking processing costs of actions that were far beyond the four dollars limitation which you know they said arguably we have a right to do that so we negotiate also provided significant benefits going forward because they now are banned by the section four dollars which had previously only applied to a category category five so it was beneficial in that respect also well quickly i'd like to respond to the issues about the notice you need to sum up though because you're over time oh i didn't realize that you're on i will i will stand on our br stick to it that's very generous the record site that they cite as to t p s expert is incorrect and if you take a look at that you'll see that that is not what he was speaking to in fact what he says one question about it is i don't know i don't know how much these people are going to own right now at this point also class council's expert that was called on fed i don't know i don't know what the only person in that room that said they knew how much was mary ellen demi the expert for the objectors who was also the expert in the previous case that said these people are about to get hammered and that's in the record and they got hammered and haven't gotten world these statements because they're still paying t the all of this could have been summed up for of a settlement agreement it's a different test for it it is but he has to analyze the settlement agreement and he has to look at it and make specific factual findings so that it's clear as to the basis of why this is a fair settlement in his mind that wasn't done here if this matters remain ended and because this court finds the settlement agreement was not fair as a result of this disproportionate impact to subclass one member's counsel have their opportunity to make their additional arguments they want to make we will there will be a full record on the matter you know and that's what we asked this