of the core these these class actions are probably right he's probably right cannot be decided without all the parties at issue in the kids probably rights cases cannot be decided without looking at the underlying painting class actions are not designed to do such analysis because of the commonality issue that is required twenty three of the second the classes should not have been certified because rigorous analysis would evidence that individual issues predominate when there are thousands of tract property thousands of severance deeds alison's of leases thousands of parties no evidence of any damages of any damage model or damage  third do we know how many surface owners there are in this case we actually we don't hear out of the that's one of the problems with the dish reports analysis the rigorous analysis wasn't done even to determine how many claimants are the best guess is that there's over ten thousand  gas resurfaced we have any idea of what the language is in those severance with regard to those individuals again no you around and we don't that's one of the problems with the rigorous analysis that wasn't done in this case you can't decide property rights issues in the abstract you can't do it because you have to go to those underlying from dates you got it and you have to have all the conflicting claimants here regina gaston will act governs this case and in that in that act which was set would divide these into manageable submissions i don't think so your honor in the reason why it is twofold one is you don't have all the claimants in the case and that's why you can't drive towards subclasses because one of the things that concerns me is you've got a lot of property owners here and the production companies and co companies have been taking gas from their properties for good and you know seems to me you know you might be content just to let this escrow system go on indefinitely but how much power these many property owners ins of dollars have come out of this account of conflicting claims i'm not talking about non conflicting claims how about conflicting claims in this case because there's really real options to get this money out you can do it by agreement which is done you can do it by method is because you don't have the coal when it seemed i and it can't possibly be a superior method when the when the act requires an adjudication between the conflicting claimants that's the key crux here you don't have the conflict the claim is here in this case the plaintiffs in this case understood that when they brought this case the for the first complaint had at the gas estates as the class vs the john unknown all claims but they realize when we got into it  that you're right in terms of whether you think it separates actions of sarin in terms or whether you're you're you're paying a sufficient amount into the escrow account of the maybe some standardized mechanism why aren't those kind of moments here it the answer goes back to wal mart versus dukes you can come up with those common questions but you want to comment answers that drive this litigation so acidic to which you said your hon variables when you get underneath the rigorous analysis wasn't done when you get underneath the barrels there they're change over the course of all these thousands of planes they change over time so when i was fooled and produced in one thousand nine hundred eighty may have a different suit in state court anywhere the commonwealth as they've done there's there's a master scheduling order that we talk about in the appendix there's twenty to thirty of these cases sitting out there in the canon cameras you know thirty i think there's twenty to thirty of them that have been sitting out there really like your argument is suffering from one defect and that is you're asking us to conclude that all of these problems are fatal i mean i agree with you there are massive decision it does the litigants in swartz creek between the cole estate and the gas estate it confirms that there still is conflicts and you can't do it in the abstract you have to have these parties in the courtroom and the plaintiffs knew that the work knew that coolest state in the gas state come together make an agreement and decide to split it in a certain way and the winds of time of change what that split is whether it's fifty fifty ninety ten sixty forty the general said we acknowledge that and believe that they can come with a voluntary or arbitration or the general assembly who in the shadows of they can change the statute in determine if there's a different way but it can't be done under the rule twenty three contacts it just simply is not  set up for this issue and with all due respect the federal court system shouldn't try to change with the statute set up through the rules twenty three contract especially pleased with the record that we have where the analysis wasn't done leases and they were provided so far as i know there's been no effort to categorize an allowance by either of the plaintiffs and of course the court had allege fraudulent concealment ever ground equitably or style benefit from pleading the statute of limitations that's not suitable for class treatment those three that true in every one of these notes or cases on what what can do first of all what kind of conflict are you talking about and second of all what what kind of judicial determination are you talking about as a precondition talking to you about that's where the oil and gas board has come here and it should and oil which comes to all intents and purposes and it's convoluted got all intents and purposes the lease then this act can swear they have voluntary leases and the money flows wide wall that's not a problem so the leases don't have the same make your problem if the ownership cases courts the case is a government largely by state law this fake courts already have a number of these cases which have been brought by matter to be handled under the requisite big genius statutes and to be handled under the ginia decisions harrison why which state courts of the new year they're already dealing with a lot of these cases on an individual basis action is that the overall point your make it might get is an overall point and may i add to it a little bit this way the problem with the class action is you're going to have individual morning i really do frame the question here the overall question this is in terms of a fact pattern the antithesis of the wal mart case class actions have become case these cases these five cases are classic class actions they are local they are regional the predominant questions turn on a single decision from the you're oversimplifying it and perhaps doing a disservice to your cause because i do understand the fact that there are many small property owners surface right yes state owners who may not imply that it did and far be it for me to to try to tell you what the meaning of that piece is the point that i was making is that unlike the more sprawling class actions the ones that have come under criticism this is a classic classic case because whatever the ultimate meaning of the rat with decision and its progeny including swords creek and the one sentence codification of the coal bed methane gas ownership issue in the virginia statute there are a limited number of patterns yes your honor and what sets this litigation as a quintessential case for class action adjudication including through appropriate subclasses and through the designation of common questions is that in response to the supreme court decision and in response to the more precise language of the statute each of the defendants has systematically searched title divided up whole and gas interests made submissions under penalty of perjury under oath pursuant to title searches go on before the virginia board gotten the orders and then proceeded to extract the methane and put the payments the royalty payments in suspense you know how many severance if there would be thousands of severance teacher hon do you know how many different forms of grants grant language i mean is there any way of knowing acting and if there's there is a way of knowing that specifically by examining of those leases and it is something that can be done we would argue that if this court believes it should be done on an ongoing basis in connection with class certification then these cases as as the defendants agree should be reminded to do just that however in terms of the certification by the district court we also argue that that was not an abuse of discretion because based on the least language that worse that was submitted by both sides to the court a court was able to ascertain that with respect to the issues in this case not a dead language in toto but with respect to the issues that matter in this case for example the does the issue of who owns the methane gas the gas owner or the coal owner with respect to the breach of contract cases that class definition is restricted to leases and they are silent as to the deduction it's so while there might be many variations in non material language of those the material provisions of the of those deeds for purposes of making the determinations of the basic issues in this case the predominant common issues in this case about the absence of cola your honor the district court has addressed the absence of the coal owners in two ways first as you heard the major coal orders the four major coal owners which collectively have consolidated over half of the coal interests are name parties in the suit they participate in the briefing there interveners so the court there has used the intervention rule to deal with that now you might ask what about the remaining coal owners those coal owners are being notified by the court they are being sent direct mail notice pursuant to a notice program that the court is currently considering and that notice tells the coal owners about the litigation that there are are summary judgment motions pending and explains to them how to get more information about the suit and how to come into the suit so any coal owner who truly wants to participate in this dispute will be able to do so before there is a final  cases before the state's circuit judges i don't and there doesn't seem to me i don't understand what the federal interest is here just in conducting an class class action your honor the answer to that question is bound up in what the supreme court has said in engine most recently about rule twenty three b three and the purpose of that that that federal rule and this is a multi state state of multi step procedure so bear with me for just a moment because i'm going to answer your question as the supreme court said in engine the office of a rule twenty three b three certification ruling is not to adjudicate the case rather it is to select the method best suited to adjudication of the controversy fairly and efficiently that's an genet one thirty three supreme court page eleven ninety one and you might ask what business if you did ask what business does a federal court have applying this rule twenty three function in this case and the answer is this congress has declared that reason not in a particular subject matter statute this is not subject matter jurisdiction this is diversity jurisdiction but the diversity jurisdiction comes from the class action fairness act of two thousand and five and in that act congress said and i quote the purpose but i'm trying to i'm trying to yes which is the relatively sapir your method of of resolving this in the other class action has simply because of the variances in terms of the individual leases because of ownership disputes because of differences in damages  to visual action or differences in individual circumstances and how do we have to we have to ask ourselves why the class action uses a period methods or attack and this whole issue and that's what i want to get out yes your honor it is the superior mechanism for attacking the salafi it's not only the best mechanism it's the only mechanism here under the economics tell the tale every procedure has a price tag and when we look at superiority it's a relativistic analysis and you have to deal with fairness and you have to deal with the fish and sea and you have to deal with economy that's what the supreme court tells us that's one reason why half a let's get down to this tech all right this is a case to look out the economics are in actual your honor there are approximately ninety accounts here that are being held in these escrows a total approximately twenty six million dollars in over half of the some accounts there are less than five thousand dollars in one third of the  t sub accounts but there are less than one thousand dollars in one hundred twenty seven of the cns accounts there are less than one thousand dollars the filing fee alone to file a declaratory relief action in the virginia courts now i believe is eighty two dollars since the supreme court and the statute have teed up this issue there have been between twelve and fifteen of these individual actions that have gotten all the way through the court system the gas owners always win i would imagine that there are slightly different circumstances among those cases as to what the leases say and what the interests guess owners or the gas owners always when there are twenty or thirty of these cases you who are pending but your honor if you look at the class the minimum number of class members is nine hundred  we know it's several thousand but let's say it's a thousand in ten years fifteen have gotten through the state court system fifteen we're going to take what another seven hundred eight hundred years to go through these cases there's a reason that there are so few of these cases it's not just that the it is the the amounts are small it's at that that every procedure has a price tag in these cases cost money there are only one or two attorneys currently taking these cases and i know one of them only takes a case that's worth at least one hundred thousand dollars because under that it's not economically feasible so that means that the vast majority of the members in these defined classes are basically out of luck and out of court were it not for the fact that the class action fairness act which was was inactive to provide crocked hot recover like when the royalties had actually been paid the landowners said well the we've been looking at decades and nobody's got any money and he said that's not correct your honor there have been  individual that is is is his representation correct there there have been some sizable payments made and those are primarily due to split agreements where the oil and gas owners reach an agreement which of course is another solution to the problem but those are the larger interests where it's worth people having you know finding each other having those those negotiations which would normally involve a lawyer as well and  no one has used it your honor no one has used it up not that we know of it's why have a bully for the reasons that tend to set arbitration in force ability it wouldn't be a public it wouldn't be a public determination it wouldn't be presidential at least with the state court proceedings you're have a body of jurisprudence that develops that people can look at and they can say well this was what here is and why it was about you know this is what this other case was about now i know you know where i stand arbitration can't do that under the statute of all the parties would have to agree to arbitration and that may be another barrier so it just hasn't worked it it's an alternative but it's not an available a method in the proof is it hasn't been availed let me jump over to another other issue and that is here i really don't think there was that rigorous an to the deep dive into the factual record and familiar with familiarity with the factual scenario i do believe that the court did a more than adequate job i think the problem with the record which is clearly correct that's what the court wants to do is with respect to the relative sparsity on to breach of contract issue for example that your honor raised there there is a real argument before judge jones there's this a transcript with specific oral argument on leases in the ad can scase which releases the silent leases of the class definition the the fact that there were primarily common issues involved in the first marketable product rule and how it's applied so there is a record  conceded or done the legwork with respect to ownership by allowing these papers in court as screwing the phones and dividing up the class by what they perceive to be the true owners of gas versus coal that is that an argument that there really isn't a conflict with respect your honor that's that's like that is a common question our contention is that that as between the gas and coal owners that conflict illusory pursuant to the statute but the court didn't decide that and the court could decide that as a common question with and with coal owners who wish to be heard on that that is a complete adjudication i would note that most co owners follow the jurisprudence and they've either relinquish their rights or don't consider that they have an interest in it it would be to the benefit of the others as well to have these questions decided once and for all within of their contract they can they can intervene they can show any language of their contract that might be immaterial to the issue that sort of gets mr going and that this is what's concerns me a little bit he's saying you're going to be ending up try reasons all of the issues that you identified are not issues that relate only to individual class members or co owners for that matter they are they are issues that are recurring common issues that relate to subsets or sub classes or categories within the class that can be designated by objective means that do not rely on state of mind there aren't reliance issues in this case by i beg to differ with respect to the statute of limitations argument in the fore case the fourth circuit said no there's no categorical rule that it's an individual issue and there are scores the course of conduct by the defendants is identical it is systematic they their royalty a methodology is identical for each defendant their course of conduct in and identifying the conflicts and s growing the funds and causing the realties to be withheld the deductions that they make they don't whole procedure not really your honor because the tort claims trust pass conversion unjust enrichment are not state of mind claims they are going to flow from the adjudication of the basic predomina hundred clients there are they they all derive from the royal the royalty issue so if the if the if the improper amount of deduction has been made that can be framed as a breach of contract it can also be framed as conversion or trust passed on interest these claims are very much dependent on the same facts in area and while they may have different formal elements they really don't and in a different individualize of monies between the lesser war and the lessee and with respect to lease language your contract language with the variations can be determined they will they will fall into their e limited categories to the extent they are material the raw material is before the district court now even back in the days of scrivener's leases when these were beautifully handwritten with wonderful calligraphy back in the eighteenth century they had boilerplate that's where the  certifications and supposed managerial difficulties just get the bulk of as the case moves forward what what happens then i mean what exit ramp is there  first the butler case which was a classification for a liability only with damages to be individualized the court realized that that there were resolution drivers that were common liability or common conduct issues that would drive the classes many many variations but he said if you look at this methodically you do an accounting first which is what we've asked for in this case the equitable remedy of an accounting under b two and then the individual damages issues variations issues different documents you categorize those you create more subclasses and even if you don't do that and you need individualized to it due to cations which we don't believe will ever happen here because none of these leases and none of these scenarios is truly unique they are patterns  you determine the patterns on a categorical basis but even if you have individual issues at the end what you've done is you've advanced the litigation as a whole toward resolution that's the resolution driver in walmart and everyone in the class will be farther along than any of them would be if they had to rely on the only available alternative that defendants will posit which is an individual case asiago case in the virginia state court so it's not just a matter of in those cases your honor one of the things that has to be done at at some stage in those proceedings is to determine who those property owners or homeowners are and so the class is defined objective flee with respect to property owners within geographic meets and title searches in the course of preparing for class notice we have addresses for seven thousand nine hundred five of them there are lapsed addresses and those are being updated so we have  what we have here is the basis to we know who is in the class we know how to notify people we we will have a procedure that people will have to prove out the nature of their owners x what a class action is for you deal with the present owners and of course the membership of the class is fluid because people die property ownership changes and at the appropriate time in the case when it comes time to release the proceeds rope but it who even owns the property and your honor the ownership of the gas interests as opposed to the coal interests the best possible way to establish that has already been done and it may not be perfect but i we can be corrected in individual cases so we know that categorically so that's what we need to know with the class depth class certification a notice stage and we get direct mail to those notices to those people then what we would need to know at the payout administrative phase of a class action which occurs in all these property contamination diminution of value cases where people come in and say yes i am the record i am the record owner is as of this date i inherited that kind of education you know in the parameters it to take care that's probably right although we're only talking about a few thousand rather than several hundred thousand or a million for example your honor in the deepwater horizon settlement that's being administered now in the  non controversial aspect of that is with respect to claims based on waterfront property the class was defined as people who owned property of a certain sort within a defined geographical area but people have to come in and make claims and they have to accounting there's a motion pending now not only for the determination is between gas and and coal but for an accounting of what's going into those escrow accounts because your honor what we know is this the methodology for deductions from royalties and calculating royalties are absolutely uniform the record is there on that we also know that there is not an accounting when these monies are put in the escrow accounts there is is not  using ownership this use as a pretext for not being forthcoming with respect to what was going home with their os if you wanted a greater degree of transparency with the or you making a case that there is a significant degree of stonewalling with respect to operation of the escrow accounts and that you need a class action we need the class action to to solve this impasse and to crack everything open because it's a completely opaque system now we don't and i can't stand here and tell you royalties have been improperly deducted from x least because the owners have no the neither the coal nor gas owners have any interest have any knowledge of that because it's a black box these escrow accounts are black boxes we know that the  met method it it's clear it's not individualized but we don't know what it is we don't know whether everything that should be in those escrow accounts is in those escrow accounts if every penny that was in those escrow accounts were in them they might be a larger they might they might even justify individual litigation but probably not and that's why we have a twenty three b two class or the threshold the threshold claim which is an equity claim under virginia law for an accounting results try to respond to three issues one justice in x s are like case i don't think there is in life the closest is can't johnson's versus kansas city southern from the circuit turns to ascertain ability if you have to resort to title if you have to look at the local land records which the report recommendation says you have to do you can't get to a class or ation because of two individuals there is no common thread when you're talking about these these issues across the the common areas to your question concerned about the tort claims the conversion claim is the best one to look at look at their briefs they say to twenty two hundred sixty seven wells that they looked at that's the only record evidence that we at twenty two had a sixty seven that had a convert claim conversion of production before pooling what about the other forty five it begs the question of the individual ality of these issues of of the torts every tort claim would have a difference different fact pattern dealing with the different wells the different the different methodologies that were done the variables that go into the deductions it's one thing to say that deductions were done uniformly but over the course of this record to adequately amyas the degree of individual  the threshold issue which was put before this court which is the ownership issue if you can't get to the ownership issue you're in the individual lives ground of each of these issues and you can go back and remain your opponent suggested that you could get over the ownership issue which i think we would all agree is of a private terminations that's going to have to be made before royalties can be released because you don't want to be released to the wrong person so she says well let's have a claims ownership it goes back to what mr smith said it's individual by individual you're going to be doing in a case by case there is no real cut and dry way to do this and get to justice does in terms of the economics i should just a look at boston versus apache it's a is there is one factor the fact that you've got a large bias for if there if you lose a number of people with individual resources or with limited resources and she's well maybe eighteen or mechanisms and three mechanisms now one is a split agreement issue deals with potentially the frak or got gas and who has the right to to produce or doesn't produce but the gas act deals with that and it worked the i cited to the record where it again six hundred thousand dollars in a month was distributed two hundred thousand dollars a month this is recently petitions or pork were put to the regional gas will board all the time if there's a change that needs to be made the legislature can do that it's a virginia issue as you said judge but yet the judge certified it anyway i mean this kind of case would drive many protestant retire and if he did it anyway he must have thought at its core this was the only way the only realistic way these people could get can you answer that sure he expressed his frustration it's in the record but it doesn't it you can't get to the consume or not you've got these other places that the state legislature set out that are being used every day or not every day but over the course of the year and money's being distributed let the state courts do it let the legislat don't have the money to fund the litigation i don't mean to be presumptuous when i say this nor do i mean to be overly critical with you but one wonders why in a direct into the record question directly to both stoppel and for all and they asked for class action why do that you can look back five years and recover for five years you don't need that if you can prove if you can if you prove you climb why forensic teams haven't won plaintiff brought the first marketable product claim implied don't have to look at any of the contracts for anything why because we think the first marketable product rule applies with a no way that line i'm not saying no deeds or anything else for the modern part if this case wanted to move along why didn't somebody taken that case to the supreme court of the genius and found out whether or not it would in these circumstances apply a first marketable product ro legislature the best way to ok good but what i would say is there are some ways if you sit down and think about it and some of these issues try to do other than in federal court and class