Piney Woods School v. Shell Oil Company ( 2000 )

UNITED STATES COURT OF APPEALS
For the Fifth Circuit
No. 99-60112
THE PINEY WOODS COUNTRY LIFE SCHOOL; et al,
Plaintiffs,
AMOCO; MRS. HENRY BAILEY, JR.; DAVID C. BARTON;
DAVID C. BARTON, Trustee; BLACK WARRIOR MINERALS,
INC., et al.,
Plaintiffs-Appellants,
VERSUS
SHELL OIL COMPANY,
Defendant-Appellee.
Appeal from the United States District Court
For the Southern District of Mississippi
(3:74-CV-307-WS)
May 30, 2000
Before EMILIO M. GARZA, DeMOSS, and STEWART, Circuit Judges.
PER CURIAM:*
This is an appeal of an order of the district court, Judge
Henry T. Wingate presiding, (i) granting Shell Oil's motion for
*
Pursuant to 5TH CIR. R. 47.5, the Court has determined that this
opinion should not be published and is not precedent except under
the limited circumstances set forth in 5TH CIR. R. 47.5.4.
partial summary judgment and dismissing the claims of 56 additional
claimants of class membership because the statute of limitations
had run on their claims and (ii) denying prejudgment interest.
I. BACKGROUND
This case has a tortured procedural history that spans more
than two decades and that appears on the dockets of several
district judges. On December 27, 1974, royalty owners from Rankin
County, Mississippi, filed this class action against their lessee,
Shell Oil Company, claiming that Shell had failed to pay royalty
based on the market value of their gas, as required by their oil
and gas leases. The district court tentatively certified the class
action on December 15, 1976, and the case was initially tried to
the bench before Judge Dan M. Russell, Jr., between November 7 and
December 22, 1979.
The district court entered its opinion two years later denying
virtually all of the royalty owners' claims. See Piney Woods
Country Life School v. Shell Oil Co., 539 F. Supp. 957 (S.D. Miss.
1982). Final judgment was entered on July 26, 1982, and the
royalty owners appealed. On appeal, a panel of our Court held that
the royalty owners were entitled to be paid royalties based on the
market value of the gas, and we remanded the case for a hearing on
damages. See Piney Woods Country Life School v. Shell Oil Co., 726
F.2d 225 (5th Cir. 1984).
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On October 10, 1985, the plaintiffs moved for approval of
notice to new class members, and the district court, at Shell's
urging, held the motion in abeyance. The district court tried the
case on remand between January 25 and February 10, 1988, and on
April 24, 1989, it entered an order ruling that the royalty owners
were not entitled to any damages. On May 1, 1989, the district
court dismissed the action, and the royalty owners again appealed.
On June 27, 1990, a second panel of our Court affirmed in
part, vacated in part, and remanded the case to the district court
for further findings regarding the value of deregulated gas between
1978 and 1986. See Piney Woods Country Life School v. Shell Oil
Co., 905 F.2d 840 (5th Cir. 1990). Five years later, on June 6,
1995, the district court entered an opinion ruling that the royalty
owners who had market value leases were entitled to additional
royalties for production from four wells during the years 1978
through 1982. In its order, the district court denied a request
for prejudgment interest. Both parties filed cross-appeals.
On April 21, 1997, a third panel of our Court affirmed the
judgment of the district court on the liability issue and remanded
for a determination of damages. On May 21, 1997, the plaintiffs
renewed their motion for issuance of supplemental notice to class
members, which motion was held in abeyance some twelve years
earlier. The district court granted the motion on September 17,
1997, and directed the issuance of notice to those persons whose
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damages claims had grown to a then-applicable jurisdictional
threshold of $10,000 during the course of the litigation. Notice
was sent to 56 additional royalty owners.
Shell subsequently moved, on September 30, 1998, for partial
summary judgment, arguing that the claims of the 56 additional
parties to class membership were barred by the applicable statute
of limitations. On October 1, 1998, the original plaintiffs
renewed their motion for prejudgment interest, but the district
court denied the motion on December 14, 1998. On January 11, 1999,
the district court granted Shell's motion for partial summary
judgment and dismissed the claims of the additional class members,
finding that the statute of limitations began to run on December
15, 1978, when the district court had first entered its order
granting class certification, and expired six years later in 1984.
II. DISCUSSION
Appellants raise two substantive issues on appeal: first,
whether the district court erred by holding that the statute of
limitations expired on the claims of the 56 additional class
members; and second, whether the district court erred by denying
prejudgment interest to the royalty owners on the unpaid royalties.
With respect to the first of these issues, the district court,
in determining that the statute of limitations had expired on the
56 additional class members' claims, noted that the statute of
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limitations began to run on December 15, 1978, when the district
court entered its order granting class certification. Thus,
according to the district court, the six-year statute of
limitations expired in 1984.
With respect to the standard of review, Appellants argue for
de novo consideration of the grant of partial summary judgment, but
as Shell properly points out, the district court's interpretations
of its own prior rulings and what those orders contemplated are
reviewed for an abuse of discretion. The denial of equitable
estoppel, even in the context of summary judgment, is also reviewed
for an abuse of discretion. See Fisher v. Johnson, 174 F.3d 710,
713 (5th Cir. 1999).
Shell argues that the 1978 order made no provision for the
addition of future class members and that such order finally
certified the class as those royalty owners who had already
sustained the jurisdictional damages amount of $10,000. All
others, according to Shell, were excluded by the class
certification order and should have taken steps to protect their
interests prior to the expiration of the limitations period in
1984.
Appellants contend that the statute of limitations was tolled
by an order of the district court dated December 29, 1986, in which
the court postponed considering the propriety of notice to and
expansion of the class, reasoning that it should first resolve the
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issues of market value and processing costs as well as whether
Shell was liable to the plaintiffs at all.
The district court was persuaded that the 56 additional
royalty owners were excluded by the December 1978 class
certification order and that the class action afforded their claims
no protection from the running of the statute of limitations. A
key to the district court's holding is that the order upon which
Appellants now rely as a tolling mechanism was not even entered
until December 29, 1986, some two years after the original statute
of limitations had expired (December 1984). The district court
also was unpersuaded that there was any basis for finding that
equitable toling principles could save the 56 members' claims.
With respect to the second issue presented on appeal,
Appellants next contend that the district court erred in failing to
award them prejudgment interest when it entered judgment in their
favor. According to Miss. Code Ann. § 53-3-39, and this Court's
decisions in First Nat'l Bank v. Pursue Energy Corp., 799 F.2d 149
(5th Cir. 1986), and Exxon Corp. v. Crosby-Mississippi Resources,
Ltd., 40 F.3d 1474 (5th Cir. 1995), Appellants argue that they are
entitled to per annum interest in the amount of 8%.
Shell argues first that the law of the case doctrine prohibits
the district court from addressing the issue of prejudgment
interest as this Court already affirmed the district court's
previous denial of prejudgment interest in 1984. See Piney Woods,
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726 F.2d at 242. In the alternative, Shell contends that the
district court properly determined that § 53-3-39 does not apply
and that First Nat'l Bank does not control.
Shell's distinction is based upon its contention that § 53-3-
39 addresses “held” proceeds, which are due to the royalty owners,
and that in this case, the district court determined that Shell
“should have charged higher prices” and passed the profit on to
royalty owners, but that there was no evidence that it actually did
charge more and that it withheld the fruits of doing so from the
royalty owners. Thus, the district court determined, Shell was not
obligated by § 53-3-39 to pay prejudgment interest. Additionally,
Shell argues that § 53-3-39 was passed in 1983 and should not be
applied retroactively to this case and to the royalty proceeds
allegedly due from the 1978-1982 time period.
Shell distinguished First Nat'l Bank on the basis that it
involved an actual “withholding” of royalty's shares of the
proceeds and the alternative payment of fixed rates. Here, Shell
argues that it did pay royalty's shares of proceeds. The defendant
in First Nat'l Bank was paying a sulfur royalty based on a fixed
rate per ton sold as opposed to one based on the royalty's share of
sales proceeds. Here, Shell notes that its liability, unlike the
defendant in First Nat'l Bank, was based upon a theoretical amount
of sales revenue it never actually received, but which the court
determined it should have.
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Having carefully reviewed each of the issues presented by
Appellants and having fully considered the briefs, the record
excerpts, the record, and the arguments presented at oral argument,
we are persuaded that the judgment of the district court should be
affirmed for the reasons stated therein.
III. CONCLUSION
Based upon the foregoing, the judgment of the district court
below is AFFIRMED in all respects.
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