Opinion ID: 2777362
Heading Depth: 2
Heading Rank: 1

Heading: Fite’s Claims On Behalf of Its Lessors

Text: Fite argues that “the only claims at issue in this matter are the claims arising under Section 30:10 for payment of the Mineral Owners’ portion of production asserted directly against SWEPI by Fite on behalf of the Mineral Owners.” In other words, Fite argues that it sued not on its own behalf, but on behalf of its lessors. As a result, Fite’s lessors effectively filed their claims before the expiration of any applicable prescription period. This argument is a difficult one to accept in light of what Fite’s complaint said and what claims it had a legal right to bring. Fite sought almost $700,000 for breach of contract and the avoidance of liability for a risk penalty, but those claims dropped out of the case. What was left was Fite’s claim that SWEPI must pay royalties to Fite’s lessors. In its amended complaint, Fite sought these two declarations from the district court: 2. Declaring that Fite has no obligation to pay royalty out of production from the Well . . . ; 3. Declaring that SWEPI is obligated to pay Fite’s royalty and overriding royalty owners that portion of production from the Well due to them under the terms of the contract creating the royalty . ... 7 Case: 13-31244 Document: 00512928554 Page: 8 Date Filed: 02/05/2015 No. 13-31244 Fite was not seeking monetary relief for its lessors. It was seeking a declaration that SWEPI was obligated to pay its lessors and that Fite was not required to do so. As a result, the district court ruled that “SWEPI is not liable to Fite” under Louisiana law, leaving Fite with the obligation to pay. But the court did not order Fite to pay its lessors. Had Fite actually sought payment for its lessors, SWEPI may have questioned its capacity to do so under Federal Rule of Civil Procedure 17. 1 That Rule requires courts to determine, based on state law, whether a party not suing on its own behalf may nevertheless sue “in the name of the real party in interest.” FED R. CIV. P. 17(a); Thomas v. N.A. Chase Manhattan Bank, 994 F.2d 236, 242-43 (5th Cir. 1993). In this case, SWEPI may have contended that Louisiana law does not permit Fite to enforce its lessors’ right to royalty payments. 2 Similarly, SWEPI may have sought dismissal based on Fite’s failure to join an indispensable party. See FED R. CIV. P. 17(a)(3), 19(b). SWEPI had no reason to raise these issues because Fite’s complaint did not attempt to bring claims on behalf of the royalty owners. We conclude that this lawsuit was strictly a contest between Fite and SWEPI, which in no way brought the claims of Fite’s lessors, to whom the royalties are said to be owed, before the district court. Consequently, the period of prescription on the royalty owners’ claims was not tolled. 1 In one case under Section 30:10(A)(3), the lessee was appointed an agent for its lessors to bring claims against the operator. Lamson Petrol. Co. v. Hallwood Petrol., Inc. 763 So.2d 40, 49 (La. App. 3d Cir. 2000). There is no suggestion that Fite’s lessors made such an appointment. 2 This issue is related to, but distinct from, those relating to standing. Standing addresses whether a party has an enforceable interest of its own, whereas capacity concerns a party’s right to sue on behalf of another; the latter may be waived, while the former may not. See Thomas, 994 F.2d at 242-43; Hous. Auth. of Kaw Tribe of Indians v. City of Ponca City, 952 F.2d 1183, 1192-93 (10th Cir. 1991); 6A CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 1559 (3d ed. 1998). 8 Case: 13-31244 Document: 00512928554 Page: 9 Date Filed: 02/05/2015 No. 13-31244