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Conflict of Laws Keyed to Brilmayer
Phillips Petroleum Co. v. Shutts
Citation:
472 U.S. 797 (1985)Facts
Defendant, Phillips Petroleum Co. (Phillips), is a Delaware corporation with a principal place of business in Oklahoma. During the 1970’s it produced and/or purchased natural gas from leased land located in 11 different states, and sold most of the gas in interstate commerce. Phillips, because it sold gas in interstate commerce, was required to secure approval for price increases from the Federal Power Commission (now called the Federal Energy Regulatory Commission).
Plaintiffs, Irl Shutts, Robert Anderson, and Betty Anderson, are representatives of a class of 28,000 royalty owners that possess rights to the leases from which Phillips produces gas. Shutts is a resident of Kansas, and the Andersons live in Oklahoma. Shutts and the Andersons own gas leases in Oklahoma and Texas. The other royalty owners reside in all 50 states, Washington D.C., and foreign countries.
Plaintiffs brought suit against Defendant in Kansas state court, seeking interest payments on their suspended royalties that Phillips had withheld while it sought the approval of price increases. The trial court granted the Plaintiffs’ motion to certify the suit as a class action under Kansas law. The class was originally comprised of 33,000 royalty owners and later finalized at 28,000 royalty owners; each of the royalty owners had royalties suspended by Phillips. The average claim of each royalty owner was $100.00. The trial court found in favor of Plaintiffs. The Supreme Court of Kansas affirmed the judgment. Phillips argued that the application of Kansas law to all of the transactions between Phillips and the royalty owners violated the Due Process and Full Faith and Credit Clauses of the U.S. Constitution. The U.S. Supreme Court granted Phillips’ petition for certiorari.
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