UNITED STATES CO URT OF APPEALS FOR THE TENTH CIRCUIT

TONY R. WHISENANT, on behalf of himself and all others similarly situated, Plaintiff - Appellant,

v. SHERIDAN PRODUCTION COMPANY, LLC, Defendant - Appellee. No. 15-6154 (D.C. No. 5:15-CV-00081-M) (W.D. Okla.)

ORDER AND JUDGMENT *

Before KELLY , PORFILIO , and BALDOCK , Circuit Judges.
Tony R. Whisenant filed a class action in state court alleging that Sheridan Production Company, LLC (Sheridan) failed to pay or underpaid royalties for natural gas wells it opera ted in Beaver County, Oklahom a. Sheridan removed the suit to federal court under the Class Action Fairness Act of 2005 (CAFA), 28 U.S.C. § 1332(d), and the district court denied Mr. Whisenant’ s motion to remand. Having

* After examining the briefs and appella te record, this pa nel has determined unanimously that oral argument would not mate rially assist the de termination of this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore ordered submitted without oral argument. This order and judgment is not binding precedent, except under the doctr ines of law of the case, res judicata, and collateral estoppel. It may be cite d, however, for its persuasi ve value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1. FILED United States Court of Appeals Tenth Circuit 

### October 7, 2015
Elisabeth A. Shumaker Clerk of Court- 2 - obtained this court’s permission to appeal, see id. § 1453(c)(1); Whisenant v. Sheridan Prod. Co. , No. 15-603 (10th Cir. Aug. 12, 2015) (unpublished order), Mr. Whisenant now challenges the denial of the motion to remand. We reverse the district court’s decision and re mand for further proceedings. “CAFA gives federal courts jurisdiction over certain class actions, defined in § 1332(d)(1), if the class has more than 100 members, the pa rties are minimally diverse, and the amount in c ontroversy exceeds $5 million.” Dart Cherokee Basin Operating Co. v. Owens , 135 S. Ct. 547, 552 (2014). Importantly, however, the amount in controversy must exceed $5 million “exclusive of interest and costs.” 28 U.S.C. § 1332(d)(2). This appeal c oncerns the interpretation of the phrase “exclusive of intere st and costs.” The district court determined that the alleged unpaid royalties amounted to $3,721,797, which is less than the jurisdictional mi nimum. But the di strict court also held that, in cases involving payment of gas royalties, Oklahoma’s Production Revenue Standards Act includes as actua l damages 12% per annum interest on amounts that are not timely paid. See Okla. Stat. Ann. tit. 52, § 570.10(D)(1). The district court held that, unde r Oklahoma law, this “interes t provision is part of the total liability recovered and is compensatory in nature, thereby constituting a part of the judgment, and is to be cons idered a part of the total li ability recovered.” Jt. App., Vol. 1 at 63. Accordingly, the district court added $1,512,869 in interest to the- 3 - unpaid royalties to arrive at an amount in controversy of at le ast $5,234,666, which satisfies CAFA’s jurisd ictional threshold. Our review is de novo. See Frederick v. Hartford Underwriters Ins. Co. , 683 F.3d 1242, 1245 (10th Cir. 2012). Although we “look to state law to determine the nature and extent of the right to be en forced in a diversity case,” determining the amount in controversy ultimat ely “is a federal question to be decided under federal standards.” Horton v. Liberty Mut. Ins. Co. , 367 U.S. 348, 352-53 (1961). “[O]ur primary task in interpreting statutes [is] to determine congre ssional intent, using traditional tools of st atutory construction.” Woods v. Standard Ins. Co. , 771 F.3d 1257, 1265 (10th Ci r. 2014) (internal quotation ma rks omitted). “We begin our analysis by examining the statute’s plain language and if the meaning of that language is clear, our inqui ry is at an end.” Id. CAFA directs that the amount in cont roversy be calculate d “exclusive of interest and costs.” 28 U.S.C. § 1332(d)(2). The parties have not directed us to, nor have we found, any CAFA cas es construing this provision. But this is the same phrase that long has appeared in the ge neral diversity-juri sdiction provision, 28 U.S.C. § 1332(a). “The normal rule of statutory construction assumes that identical words used in differe nt parts of the same act ar e intended to have the same meaning.” Sorenson v. Sec’y of Treasury , 475 U.S. 851, 860 (1986) (internal quotation marks omitted); see also Nat’l Credit Union Ad min. v. First Nat’l Bank & Tr. Co. , 522 U.S. 479, 501 (1998) (noting “the es tablished canon of construction that- 4 - similar language contained within the same section of a statute must be accorded a consistent meaning”). We therefore look to § 133 2(a) cases for guidance. This court’s most inst ructive precedent is State Farm Mutual Automobile Insurance Co. v. Narvaez , 149 F.3d 1269, 1271 (10th Cir. 1998), in which the plaintiff insurance company relied on § 1332(a) to esta blish jurisdiction over its declaratory judgment action. Because the two insurance policies at issue had limits totaling exactly $50,000, rather than exceedi ng $50,000 as required for jurisdiction, the insurance company urged th e court also to consider it s claim that it did not owe the interest that the insured claimed was due on unpaid uninsured motorist benefits. See id. We rejected this suggestion, stating th at “interest is not counted if it was an incident arising solely by virtue of a dela y in payment of the underlying amount in controversy.” Id. (internal quotation marks omitted ). “[I]f [the insurer] was ultimately obligated to pay [the insured] th e uninsured motorist be nefits, the interest on the unpaid policies would ar ise solely by virtue of [the insurer’s] delay in paying the insurance claim. This is precisely the type of in terest that § 1332 prohibits us from considering.” Id. Other circuits also have adopted the vi ew that “‘[i]nterest’ for purposes of § 1332(a) is a sum that becomes due because of delay in payment,” Principal Mut. Life Ins. Co. v. Juntunen , 838 F.2d 942, 943 (7th Cir. 1988) (per curiam) (citing Velez v. Crown Life Ins. Co. , 599 F.2d 471, 473-74 (1st Cir. 1979)), and leading treatises agree, see 15 James Wm. Moore et al., Moore’s Federal Practice- 5 - § 102-106[5][b] (3d ed. 201 5) (“For purposes of calcu lating the jurisdictional amount, a federal court may not look to any amount claimed as interest by the plaintiff that is attributable solely to a de lay in payment or to a wrongful deprivation of funds.”); 14AA Charles Alan Wright et al., Federal Practice & Procedure § 3712 (2011) (“[I]nterest uniformly is excluded . . . if it is only incident al to the claim the plaintiff is asserting or if it arises solely by virtue of a delay in the payment of an obligation.” (footnote omitted)). As stated by the First Circuit: When the statute requires that the amount in controversy “exceeds the sum * * * of $10,000, exclusive of interest and costs * * *” it makes no difference whether the interest wh ich is sought accumulated upon the principal obligation sued upon because of contract, or by common law, or by statute, or whether the interest be termed a penalty or damages, so long as it is an incident arising solely by virtue of a delay in payment. Regan v. Marshall , 309 F.2d 677, 678 (1st Cir. 1962 ) (alterations in original). Under these authorities, th e district court erred in holding that Oklahoma’s statutory interest provisi on can be considered in determining the amount in controversy in this suit. As in Narvaez , if Sheridan ultimate ly is obliged to pay royalties to the class members, the interest obligation woul d arise solely by virtue of its delay in paying those roya lties. It makes no differen ce that the obligation arises from an Oklahoma statute and may, under th at statute, be te rmed damages. See Regan , 309 F.2d at 678. As Narvaez succinctly states, “[t]his is precisely the type of interest that § 1332 prohibits us fr om considering.” 149 F.3d at 1271. Offering an alternative ground to affirm the district court’s denial of remand, Sheridan argues that instead of adding the statutory inte rest, we may add reasonable- 6 - attorney’s fees to the unpaid royalties. Sheridan raised this argument before the district court, but the dist rict court did not reach the issue because it already had determined that Sheridan satisfied th e amount-in-controvers y requirement. The parties’ arguments indicate th at this issue would benefit from being considered by the district court in th e first instance. See Woods , 771 F.3d at 1270 (remanding for the district court to consider whether CAFA’s amount-in-c ontroversy requirement was met). We therefore decline to address Sher idan’s alternative gr ound for affirmance. The motion to seal Volume 2 of the jo int appendix is gran ted. The judgment of the district court is reve rsed and this matter is re manded for further proceedings, including a determination of whether any amounts other than interest under Oklahoma’s Production Revenue Standards Ac t may be added to the alleged unpaid royalties to satisfy CAFA’s am ount-in-controvers y requirement.

Entered for the Court
Paul J. Kelly, Jr. Circuit Judge