UNITED STATES COURT 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 operated in Beaver County, Oklahoma. 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 appellate record, this panel has determined 

unanimously that oral argument would not materially assist the determination 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 doctrines of law of the case, res judicata, and collateral 

estoppel. It may be cited, however, for its persuasive 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
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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 Co., No. 15-603 (10th Cir. Aug. 12, 2015) (unpublished order), 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 remand 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 parties are minimally 

diverse, and the amount in controversy 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 concerns the interpretation of the phrase 

“exclusive of interest and costs.” 

The district court determined that the alleged unpaid royalties amounted to 

$3,721,797, which is less than the jurisdictional minimum. But the district court also 

held that, in cases involving payment of gas royalties, Oklahoma’s Production 

Revenue Standards Act includes as actual 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, under Oklahoma law, this “interest provision is part of the 

total liability recovered and is compensatory in nature, thereby constituting a part of 

the judgment, and is to be considered a part of the total liability recovered.” Jt. App., 

Vol. 1 at 63. Accordingly, the district court added $1,512,869 in interest to the 
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unpaid royalties to arrive at an amount in controversy of at least $5,234,666, which 

satisfies CAFA’s jurisdictional 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 enforced in a diversity case,” determining the 

amount in controversy ultimately “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 congressional intent, using 

traditional tools of statutory construction.” Woods v. Standard Ins. Co., 771 F.3d 

1257, 1265 (10th Cir. 2014) (internal quotation marks omitted). “We begin our 

analysis by examining the statute’s plain language and if the meaning of that 

language is clear, our inquiry is at an end.” Id. 

CAFA directs that the amount in controversy be calculated “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 cases construing this provision. But this is the same 

phrase that long has appeared in the general diversity-jurisdiction provision, 

28 U.S.C. § 1332(a). “The normal rule of statutory construction assumes that 

identical words used in different parts of the same act are 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 Admin. v. First Nat’l Bank & 

Tr. Co., 522 U.S. 479, 501 (1998) (noting “the established canon of construction that 
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similar language contained within the same section of a statute must be accorded a 

consistent meaning”). We therefore look to § 1332(a) cases for guidance. 

This court’s most instructive 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 establish jurisdiction over its 

declaratory judgment action. Because the two insurance policies at issue had limits 

totaling exactly $50,000, rather than exceeding $50,000 as required for jurisdiction, 

the insurance company urged the court also to consider its 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 that “interest is not counted if it was an 

incident arising solely by virtue of a delay in payment of the underlying amount in 

controversy.” Id. (internal quotation marks omitted). “[I]f [the insurer] was 

ultimately obligated to pay [the insured] the uninsured motorist benefits, the interest 

on the unpaid policies would arise solely by virtue of [the insurer’s] delay in paying 

the insurance claim. This is precisely the type of interest that § 1332 prohibits us 

from considering.” Id. 

Other circuits also have adopted the view 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
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§ 102-106[5][b] (3d ed. 2015) (“For purposes of calculating the jurisdictional 

amount, a federal court may not look to any amount claimed as interest by the 

plaintiff that is attributable solely to a delay 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 incidental 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 which 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, the district court erred in holding that Oklahoma’s 

statutory interest provision can be considered in determining the amount in 

controversy in this suit. As in Narvaez, if Sheridan ultimately is obliged to pay 

royalties to the class members, the interest obligation would arise solely by virtue of 

its delay in paying those royalties. It makes no difference that the obligation arises 

from an Oklahoma statute and may, under that statute, be termed damages. See

Regan, 309 F.2d at 678. As Narvaez succinctly states, “[t]his is precisely the type of 

interest that § 1332 prohibits us from 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 interest, we may add reasonable 
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attorney’s fees to the unpaid royalties. Sheridan raised this argument before the 

district court, but the district court did not reach the issue because it already had 

determined that Sheridan satisfied the amount-in-controversy requirement. The 

parties’ arguments indicate that this issue would benefit from being considered by the 

district court in the first instance. See Woods, 771 F.3d at 1270 (remanding for the 

district court to consider whether CAFA’s amount-in-controversy requirement was 

met). We therefore decline to address Sheridan’s alternative ground for affirmance. 

 The motion to seal Volume 2 of the joint appendix is granted. The judgment 

of the district court is reversed and this matter is remanded for further proceedings, 

including a determination of whether any amounts other than interest under 

Oklahoma’s Production Revenue Standards Act may be added to the alleged unpaid 

royalties to satisfy CAFA’s amount-in-controversy requirement. 

 Entered for the Court 

 Paul J. Kelly, Jr. 

 Circuit Judge