McMahon Foundation, et al v. Amerada Hess

United States Court of Appeals
Fifth Circuit
F I L E D
February 18, 2004
Charles R. Fulbruge III
Clerk
In the
United States Court of Appeals
for the Fifth Circuit
_______________
m 02-41704
_______________
THE MCMAHON FOUNDATION; J. TOM POYNOR,
Plaintiffs-Appellees,
VERSUS
AMERADA HESS CORPORATION, ET AL.,
Defendants,
VERSUS
CHESAPEAKE EXPLORATION LIMITED PARTNERSHIP,
Movant-Appellant.
* * * * * * * * * * * * * * *

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_______________
m 03-40099
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ALL PLAINTIFFS,
Plaintiff-Appellee,
VERSUS
ALL DEFENDANTS,
LIAISON COUNSEL,
Defendant-Appellee,
VERSUS
CHESAPEAKE EXPLORATION LIMITED PARTNERSHIP,
Movant-Appellant.
* * * * * * * * * * * * * * *

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_______________
m 03-40238
_______________
THE MCMAHON FOUNDATION; J. TOM POYNOR,
Plaintiffs-Appellees,
VERSUS
AMERADA HESS CORPORATION, ET AL.,
Defendants,
VERSUS
CHESAPEAKE EXPLORATION LIMITED PARTNERSHIP,
Movant-Appellant.
* * * * * * * * * * * * * * *
THE MCMAHON FOUNDATION; J. TOM POYNOR; MARY ALMA POWELL,
Plaintiffs-Appellees,
VERSUS
OCCIDENTAL PETROLEUM; ET AL.,
Defendants,
VERSUS
CHESAPEAKE EXPLORATION LIMITED PARTNERSHIP,
Movant-Appellant.

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_________________________
Appeals from the United States District Court
for the Southern District of Texas
m C-98-CV-048
m C-98-CV-130
MDL m 1206
_________________________
Before JOLLY, SMITH, and DEMOSS,
Circuit Judges.
JERRY E. SMITH, Circuit Judge:*
Chesapeake Exploration Limited Partner-
ship (“CELP”) appeals the denial of its motion
to enforce the terms of a class action
settlement. The district court’s order is but
one action taken in its capacity as an ad-
ministrator of the settlement fund. The order
neither fully resolves the rights and liabilities of
all the parties nor fulfills the court’s mandate
to interpret and administer the settlement. It is
accordingly not a final appealable order, so we
dismiss the appeal.
I.
CELP, a wholly-owned subsidiary of
Chesapeake Energy Corporation (“CE”),
proceeding by way of motion in the Southern
District of Texas, attempts to assert its
putative rights to partake in a settlement from
which it has previously been excluded. The
settlement (the “Global Settlement”) arises
out of a series of lawsuits filed in the
mid-1990’s against numerous oil producers by
oil royalty and interest owners. The plaintiffs
sued in various state and federal courts,
charging the oil producers with the systematic
underpayment of royalties for oil purchased at
the wellhead. The litigation was consolidated
in January 1998 by the Judicial Panel on
Multi-District Litigation and assigned to the
Southern District of Texas for further
proceedings.
Thereafter, most of the original defendants
settled, reaching an agreement that divided the
parties into four classes: settling plaintiffs,
non-settling plaintiffs, settling defendants, and
non-settling defendants. Non-settling plaintiffs
and non-settling defendants are regarded as
being outside the settlement class and are
neither bound by the terms of the agreement
nor entitled to file claims under it. In addition,
the agreement excludes “affiliates” of non-
settling defendants, defined as entities in which
a non-settling defendant possessed a fifty
percent or more ownership interest at any time
between January 1, 1986, and September 30,
1998.
CE was designated a non-settling
defendant, because it did not contribute
* Pursuant to 5TH CIR. R. 47.5, the court has
determined that this opinion should not be pub-
lished and is not precedent except under the limited
circumstances set forth in 5TH CIR. R. 47.5.4.

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monies to the settlement fund. CE timely
objected to this classification and its exclusion
as a class member. The district court certified
the Global Settlement over these objections,1
and CE timely appealed, then voluntarily
abandoned the appeal.2 Despite entering a
final judgment, the district court retained
“continuing jurisdiction over the Settlement
Agreement . . . for the purposes of enforcing,
implementing, administering, construing and
interpreting [the] Settlement Agreement.”3
The present appeal arises out of a motion
by CELP asking the district court to order a
settlement disbursement in satisfaction of
claims owned by three of CELP’s newly- ac-
quired subsidiaries: DLB Oil & Gas, Inc.
(“DLB”), Hugoton Energy Corp. (“Hugo-
ton”), and Anson Corporation (“Anson”).
DLB, Hugoton, and Anson are formerly class-
action plaintiffs who asserted a right to
damages for barrels of oil they sold at
artificially deflated prices in the preceding
decade.
The district court, having previously
determined that CELP could not assert claims
on its own behalf because it is a non-settling
defendant, denied CELP’s motion, because it
concluded DLB, Hugoton, and Anson are af-
filiates of a non-settling defendant. Each of
the three companies was acquired by CELP
before the effective date specified in the Global
Settlement’s definition of “affiliates” of a non-
settling defendant. As a result, the court
concluded, the companies’ claims were exclud-
ed by the terms of the agreement and could
not be asserted by CELP.4
II.
With limited exception, this court has jur-
isdiction only over final judgments. See 28
U.S.C. § 1291; Graham v. Johnson, 168 F.3d
762, 774 (5th Cir. 1999). “A ‘final decision’
generally is one which ends the litigation on
the merits and leaves nothing for the court to
do but execute the judgment.” Catlin v.
United States, 324 U.S. 229, 233 (1945).
Where an action involves multiple parties, “a
disposition of the action as to only some of the
parties does not result in a final appealable or-
der absent a certification by the district court
under Federal Rule of Civil Procedure 54(b).”
Transit Mgmt., Inc. v. Group Ins. Admin.,
Inc., 226 F.3d 376, 381 (5th Cir. 2000).
The district court order is not a final
judgment, because it neither resolves the rights
and liabilities of all the part ies nor concludes
the district court’s role as an administrator of
the settlement. The parties do not dispute that
the original order certifying the Global
1 In re Lease Oil Antitrust Litig. (No. II), 186
F.R.D. 403 (S.D. Tex. 1999)
2 As a result, the fairness of the settlement is no
longer an issue CELP can raise on appeal.
3 See also Kokkonen v. Guardian Life Ins. Co.
of Am., 511 U.S. 375, 380-81 (1994) (providing
that courts lack inherent jurisdiction to enforce set-
tlements that they approve, but may nevertheless
retain jurisdiction for that purpose at the time of
settlement).
4 The district court misconstrued CELP’s mo-
tion as a Fed. R. Civ. P. 60(b) motion for relief
from the judgment on the basis of the court’s belief
that CELP sought to be re-designated as a class
member. To the contrary, CELP’s motion asserts
a right to collect based on an independent ground
that was not the subject of the court’s earlier rul-
ing, namely, by contesting whether DLB, Hugoton,
and Anson are affiliates of a non-settling defendant
barred from collecting in the judgment. As a
result, we agree with CELP that its motion should
not be analyzed under the standards of rule 60(b).

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Settlement was a final appealable order, or that
CE’s initial appeal of that decision was
properly initiated. Rather, the question is
whether a subsequent order interpreting that
settlement to determine the rights and
liabilities of one party is a final appealable
judgment. On the facts of this case, it is not.
Of singular importance to our conclusion is
the manner in which CELP initiated the
present dispute. Instead of pursuing a private
cause of action between itself and the plan ad-
ministrator, CELP proceeded by way of
motion in the pre-existing class action case. It
did not serve a complaint on a defendant5 or
seek to have its claims adjudicated under a
new docket number. Indeed, under Kokkonen,
511 U.S. at 380-81, for any such lawsuit to be
heard in federal court, there would need to be
an independent jurisdictional basis not found
here. As a result, the present action is a
continuing part of the original class action,
subject to the terms and conditions by which
the district court retained the subject matter
jurisdiction necessary to interpret the
settlement and issue binding orders thereunder.
Among the consequences for CELP’s deci-
sion to pursue its claim in this fashion is the
subordination of its interests to the larger ac-
tion pending in the district court, which re-
tained jurisdiction over the settled case for the
purpose of “enforcing, implementing,
administering, construing and interpreting” the
settlement. The issuance of an interpretive
order defining CELP’s rights and obligations
under the agreement may be an action that is
consistent with this retained grant of
jurisdiction, but it is not an action that marks
the termination of the court’s role as an
administrator of the settlement. So long as the
court retains its residual grant of jurisdiction
further to enforce, administer, and interpret the
settlement agreement, any action it takes in
this capacity lacks the attribute of finality that
is necessary to make the order immediately
appealable.6
As a result, we DISMISS the appeal for
want of jurisdiction and, accordingly, we do
5 And indeed, at oral argument, CELP’s attor-
ney had difficulty even identifying the defendant.
The motion to enforce the settlement is ostensibly
a claim to require the administrator of the settle-
ment fund specifically to perform its obligations as
a fiduciary, but that party, the Garden City Group,
was not sued and was not involved in the
proceedings before the district court or this court
on appeal. Rather, CELP’s actions are being op-
posed by counsel for the settling plaintiff class.
6 There are several alternative means by which
CELP could have brought this claim that would
have lent themselves to a quicker appeal: (1) by
pursuing an independent claim against the plan’s
fiduciaries in state (or with the proper jurisdictional
basis, federal) court for breach of contract, thereby
asserting its rights to a settlement distribution in a
vehicle that presents that singular issue for
adjudication; (2) by accepting its status as a non-
settling defendant and instituting a new cause of
action to prevail on the merits of the underlying
antitrust and state tort claims; or (3) having pro-
ceeded as it did by way of motion, by asking the
district court to determine that there exists no just
reason to delay an appeal of its individual rights
and to certify the issue for appellate review under
rule 54(b). See FED. R. CIV. P. 54(b); Wither-
spoon v. White, 111 F.3d 399, 402-03 (5th Cir.
1997). At oral argument, appellees’ counsel stated
their position that at least the second of these
alternatives remains open to CELP. Alternatively,
CELP may wait until the district court completes
its task as an administrator of the fund, and appeal
the order at that time.

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not reach the merits of the district court’s con-
clusion that CELP may not assert rights on be-
half of DLB, Hugoton, and Anson.

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