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Civil Procedure Keyed to Subrin
Phillips Petroleum Co. v. Shutts
Citation:472 U.S. 797, 105 S. Ct. 2965 (1985)
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During the 1970s, Defendant acquired natural gas by leasing gas-producing lands from others and paying royalties on the gas it extracted. While regulatory approval was pending regarding prices, Defendant sold the gas at higher prices, but paid royalties only on the lower approved prices. Plaintiff Shutts, on behalf of himself and 33,000 small royalty owners, filed suit in Kansas state court, claiming they were entitled to interest on the money during the period when Defendant was awaiting regulatory approval of price increases. After the class was certified, Plaintiff Shutts provided each class members with notice through first-class mail. The notice informed each member they would be represented by Shutts, the named plaintiff, unless they appeared in person or by counsel. The notice also stated that all class members would be included in the suit and bound by the judgment unless they filed a form to “opt out.” The final class as certified contained 28,100 members; 3,400 had opted out. Less than 1,000 of the class members resided in Kansas and only one quarter of one percent of the land involved in the leases were on Kansas land. The court entered judgment for Plaintiffs. The Supreme Court of Kansas affirmed.
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