Phillips Petroleum Co. v. Shutts

Plaintiffs Shutts and others similarly situated were royalty owners possessing rights to leases from which Defendant produced gas. Defendant produced or purchased gas from lease land located in eleven states. Plaintiffs brought a class action against Defendant in Kansas state court to recover interest on royalty payments. The trial court certified a class of 33,000 royalty owners. All class members were sent notice that described the lawsuit, offered an opportunity to personally appear, and that they could opt out by returning a request for exclusion. The final class was 28,000 that resided in all 50 states, the District of Columbia, and some foreign countries. Class members whose notice was undeliverable were also excluded. 99% of the leases and 97% of the class members had no connection with Kansas except for the lawsuit. The trial court applied Kansas contract and equity law and found Defendant liable to all class members. Defendant appealed arguing the due process clause of the Fourteenth Amendment prevented the Kansas court from adjudicating the claims of all the class members and the full faith and credit clause prohibited application of Kansas law to all of the transactions between Defendant and the class members. The Supreme Court of Kansas affirmed the trial court’s ruling.