Opinion ID: 3168084
Heading Depth: 2
Heading Rank: 1

Heading: Conflicting Class Definitions

Text: This jurisdictional conflict arises because the parties disagree over how to construe the class definition in Arbuckle’s petition. Arbuckle contends the class includes only current owners of mineral interests, which we will call “the narrow definition.” The defendants, however, contend the class includes all current and former owners of mineral interests since the foreclosure actions in 2004, “the broad definition,” of course. The class definition issue is critical to determine whether the local controversy exception applies. Arbuckle has presented sufficient evidence to show that, under the narrow definition, the proposed class consists of over twothirds Texas citizens. 4 Arbuckle has failed, though, to present any evidence about those owners who purchased mineral interests post-foreclosure but have since sold or otherwise relinquished their interests. During a deposition of Arbuckle’s class-citizenship expert witness, the witness conceded that he had not examined the citizenship of interim owners. It was Arbuckle’s burden, as 4 The defendants claim Arbuckle presented “unreliable” expert testimony in assessing the citizenship of the putative class under the narrow class definition. The defendants did not previously challenge Arbuckle’s proof of citizenship under the narrow definition in their petition for permission to appeal. Moreover, the argument is relegated to a footnote in the defendants’ brief. Arguments subordinated in a footnote are “insufficiently addressed in the body of the brief,” and thus are waived. Bridas S.A.P.I.C. v. Gov’t of Turkm., 345 F.3d 347, 356 n.7 (5th Cir. 2003). Our finding of waiver, even though we express it in a footnote, is nonetheless dispositive. 6 Case: 15-10955 Document: 00513334221 Page: 7 Date Filed: 01/07/2016 No. 15-10955 the party seeking remand, to “prove the statutory citizenship requirement by a preponderance of the evidence.” Preston, 485 F.3d at 797. Therefore, if the broad definition controls, Arbuckle has failed to satisfy its burden of proof in the absence of necessary class citizenship evidence. Arbuckle’s petition includes the two definitions of the putative class in separate paragraphs. The narrow definition appears in paragraph 14: Plaintiff and all class members are currently mineral interest owners (and in almost all instances also owners of the surface estate) in Johnson and Tarrant Counties, Texas. Some members of the class, and numerous third party lenders (collectively “lenders”), were prior mortgagees, i.e. mortgage owners, with valid, properly recorded mortgages on properties, and mineral interest, (“property” or “properties”) whereby those lands and mineral interests were pledged as collateral on loans to lenders (“mortgages”). The broad definition appears in paragraph 23, which is the formal description of the class that the plaintiff wishes to certify: Plaintiff seeks and requests the certification of a class (“the Class” or “Class Members”) comprised of the following: All non-excluded persons or entities, 5 in Johnson and Tarrant Counties, Texas, who are, or were, since 2004, purchasers of property, including mineral interests, at foreclosure, of valid, prior-recorded mortgages on properties, or owners who took title by, through or under such a purchaser, from Chesapeake and Total produced gas and other minerals . . . . The district court carefully analyzed these conflicting definitions on the record, eventually adopting the narrow class definition in paragraph 14. The 5 The term “non-excluded persons or entities” is defined in paragraphs 23 and 25 of the petition. Neither definition sheds any light on the questions we confront. 7 Case: 15-10955 Document: 00513334221 Page: 8 Date Filed: 01/07/2016 No. 15-10955 court characterized paragraph 23’s broader definition as a mere “pleading error,” and held “the totality of the pleadings makes it clear that [Arbuckle is] talking about current owners.” We now perform our own review. Paragraph 14 states “all class members are currently mineral interest owners.” In conflict with that, paragraph 23 sets out that the Class and Class Members include “[a]ll non-excluded persons or entities . . . who are, or were, since 2004, purchasers of property . . . or owners who took title by, through or under such a purchaser.” Paragraph 23, reasonably read, includes all nonexcluded purchasers since 2004: the initial purchasers at foreclosure who no longer are owners; purchasers from the original or later purchasers who no longer are owners; and the current owners no matter when they acquired their interests on tracts that passed through foreclosures. 6 The two paragraphs are in direct conflict with one another. Arbuckle says the narrow definition controls on the basis that paragraph 14’s definition appears earlier in the petition. We find no legal authority supporting an earlier-in-placement rule for interpreting pleadings. More important than location is purpose. Paragraph 23, containing the broad definition, begins by saying that “Plaintiff seeks and requests the certification of a class (‘the Class’ or ‘Class Members’) comprised of the following,” and then gives its definition. Thus, the broad definition appears in the paragraph that formally identifies 6 The dissent suggests paragraph 23 may be nothing more than a list of “ways that a current owner might have acquired his mineral interest.” A significant problem with that view is the use of the word all at the start of the paragraph. If the paragraph said the Class is comprised of “persons or entities” who acquired mineral interests in a specified manner, that would imply some, but not all, qualified persons or entities are actually members of the class. Paragraph 23, however, states the Class is comprised of all non-excluded persons or entities who satisfy the listed qualifications, not a subset of those who qualify. Moreover, paragraph 23 is not presented as an afterthought, i.e., a section which illuminates by examples an earlier class definition. It explicitly identifies the class that is to be certified. 8 Case: 15-10955 Document: 00513334221 Page: 9 Date Filed: 01/07/2016 No. 15-10955 the class. If either paragraph is to be given greater weight, it ought to be the paragraph that contains what the plaintiff has declared is the class definition. Arbuckle also argues paragraph 23 should be subordinate because its language is murky in relation to paragraph 14. We find no ambiguity in saying the class includes “all” who were purchasers since 2004 or acquired title through such a purchaser. Finally, Arbuckle argues that paragraph 23 is not in conflict with paragraph 14. Instead, it applies only to current owners because “all current owners were purchasers at some point in time.” Arbuckle’s proposed interpretation overlooks the beginning of paragraph 23, which expressly includes all purchasers, not merely those who still own property. We find paragraph 23 has the stronger claim to being authoritative. We now look at the petition as a whole.