Court Opinion

ID: 162900
Source: CourtListenerOpinion
Date Created: 2010-08-14 07:42:31+00
Date Added: 2024-06-11T09:00:57.733274
License: Public Domain

F I L E D
                                                            United States Court of Appeals
                                                                    Tenth Circuit
                  UNITED STATES COURT OF APPEALS
                                                                      JAN 2 2003
                               TENTH CIRCUIT
                                                               PATRICK FISHER
                                                                        Clerk

RUTTER & WILBANKS CORP.;
ELLIOTT A. RIGGS; WILLIAM R.
THURSTON, Trustee; GORDON
TANNER; WALTER K. ARBUCKLE
TRUST; ERIC B. WELLS; KEVIN C.                     No. 02-1034
WELLS; CHARLES R. WIGGINS;
KEN KAMON,

             Plaintiffs - Appellees,
      v.                                          (D. Colorado)
SHELL OIL COMPANY; SHELL                       (D.C. No. 00-Z-1854)
WESTERN E & P, INC.; MOBIL OIL
CORPORATION; MOBIL
PRODUCING TEXAS & NEW
MEXICO, INC.; MOBIL
EXPLORATION & PRODUCING U.S.,
INC.; EXXON MOBIL, INC.; CORTEZ
PIPELINE COMPANY, a partnership;
SHELL CO 2 COMPANY, LTD., a Texas
limited partnership; KINDER
MORGAN CO 2 COMPANY, a Texas
limited partnership,

               Defendants - Appellees,
--------------------------------------
GERALD O. BAILEY and W. L.
GRAY& CO.,

             Applicants in Intervention -
             Appellants.
                             ORDER AND JUDGMENT             *

Before TACHA , Chief Judge, ANDERSON , and EBEL , Circuit Judges.

       This appeal is generally related to the appeal in    Rutter & Wilbanks Corp. v.

Shell Oil Co. , Nos. 02-1220, 02-1221 (10th Cir. filed Dec. 24, 2002), in which we

recently affirmed the district court’s approval of a settlement of a group of cases

arising out of litigation concerning the production of CO       2   contained within the

McElmo Dome Unit in Colorado. In this appeal, appellants Gerald O. Bailey and

the W. L. Gray Co. (“Gray”) appeal the denial of their motions to intervene in one

of the actions which was settled:     Rutter & Wilbanks Corp. v. Shell Oil Co.      , No.

00-Z-1854 (D. Colo. filed Sept. 22, 2000). We affirm.

       Bailey and Gray were owners of overriding royalty interests (“ORIO”s) in

the McElmo Dome Unit. The September 2001 settlement agreement settling

Rutter & Wilbanks and three related cases gave them the right to opt out of the

settlement. On January 5 and January 7 of 2002, Gray and Bailey, respectively,

opted out of the settlement. On January 10, 2002, they filed motions to intervene

       This order and judgment is not binding precedent, except under the
       *

doctrines of law of the case, res judicata, and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.

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in Rutter & Wilbanks , which the district court denied essentially on the ground

that they were untimely: “[g]iven the length of time this litigation, as an entire

matter, has endured thus far, and the late date at which the applicants move for

intervention, the Court will deny the motion.” Order at 2, Appellants’ App. at 22.

       Additionally, Gray and Bailey are also involved in litigation in Texas

involving the same defendants and claims involving CO        2   production on the

McElmo Dome Unit. In fact, Gray is a co-plaintiff in one proceeding with Harry

Ptasynski, whose appeal of the denial of virtually identical motions to intervene

we simultaneously affirm.     See Rutter & Willbanks Corp. v. Shell Oil Co.      , Nos.

01-1565, 01-1567 (10th Cir. filed Dec. 24, 2002). Bailey is a co-plaintiff and co-

defendant in various Texas proceedings with Bridwell Oil Co., whose appeal of

the denial of its motions to intervene we affirmed along with Ptasynski’s.           See id.

       Plaintiffs and Defendants argue that Bailey and Gray lack standing, having

opted out of the settlement before they filed their motions to intervene.

       It is well settled that, in order to show standing necessary to invoke
       federal court jurisdiction, a party must demonstrate three things:
              (1) “injury in fact,” by which we mean an invasion of a
              legally protected interest that is “(a) concrete and
              particularized, and (b) actual or imminent, not
              conjectural or hypothetical”; (2) a causal relationship
              between the injury and the challenged conduct, by which
              we mean that the injury “fairly can be traced to the
              challenged action of the defendant,” and has not resulted
              “from the independent action of some third party not
              before the court”; and (3) a likelihood that the injury
              will be redressed by a favorable decision, by which we

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              mean that the “prospect of obtaining relief from the
              injury as a result of a favorable ruling” is not “too
              speculative.”

In re Integra Realty Res., Inc.   , 262 F.3d 1089, 1101 (10th Cir. 2001) (quoting

Northeastern Fla. Chapter of the Associated Gen. Contractors v. City of

Jacksonville , 508 U.S. 656, 663-64 (1993)). In          In re Integra , we held that parties

who had opted out of a settlement lacked standing to challenge the settlement

because they “lack[ed] any legally protected interest that could support the ‘injury

in fact’ element necessary to demonstrate standing.”           Id. at 1102; see also In re:

Vitamins Antitrust Class Actions     , 215 F.3d 26 (D.C. Cir. 2000) (holding that

presumptive class members who had opted out of a settlement had no standing to

challenge a specific clause in the settlement). We, and other courts, have

recognized a narrow exception to this where nonsettling parties can demonstrate

that they will suffer “‘plain legal prejudice,’ as when ‘the settlement strips the

party of a legal claim or cause of action.’”         In re Integra , 262 F.3d at 1102

(quoting Mayfield v. Barr , 985 F.2d 1090, 1093 (D.C. Cir. 1993)) (further

quotation omitted).

       Bailey and Gray assert that they “have not sought ‘limited’ intervention to

challenge the proposed settlement” but rather ask only that “they be allowed to

intervene as parties in the case so that they may litigate their claims and protect

their interests.” Appellants’ Reply Br. at 5. We agree with the Plaintiffs and

                                               -4-
Defendants in this case that, once they opted out of the settlement, Bailey and

Gray lost any legally cognizable interest in the proceedings into which they wish

to intervene. Further, they do not argue that they have suffered plain legal

prejudice in that they have been stripped by the settlement of any legal claim or

cause of action; indeed, they have been actively pursuing claims against

Defendants in Texas.

       Alternatively, were they able to identify some interest sufficient to confer

standing, we would hold that the district court did not abuse its discretion in

finding their motions to intervene untimely.         See Utah Ass’n of Counties v.

Clinton , 255 F.3d 1246, 1249 (10th Cir. 2001) (“We generally review a district

court’s ruling on the timeliness of a motion to intervene under an abuse of

discretion standard.”).

       AFFIRMED.

                                                     ENTERED FOR THE COURT

                                                     Stephen H. Anderson
                                                     Circuit Judge

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