Appeals Court Upholds Nearly $6M in Fees in EnerVest Royalty Case
A nearly $6 million attorneys’ fee award tied to a long-running oil and gas royalty dispute between Oklahoma mineral owners and EnerVest Energy has been upheld by the 10th U.S. Court of Appeals, marking the third appellate ruling in the case.
The dispute dates back to a 2011 lawsuit filed by Oklahoma royalty owners represented by Chieftain Royalty Company, alleging underpayment of oil and gas royalties following EnerVest’s acquisition of the wells from a previous operator. After years of litigation, the case resulted in a $52 million class-action settlement reached in 2015, with funds to be distributed to the royalty owners after expenses and legal fees.
Dispute Over Attorneys’ Fees and Incentive Awards
Following the settlement, class counsel requested 40% of the settlement fund as attorneys’ fees, along with reimbursement of expenses and an incentive award for the class representative. Two class members objected, challenging both the size of the fee request and the incentive payment.
The U.S. District Court for the Western District of Oklahoma ultimately approved the settlement but reduced the attorneys’ fee award to 33.33% of the common fund and approved a 0.5% incentive award for the class representative.
Appeals Trigger Oklahoma Law Review
On the first appeal, the 10th Circuit Court of Appeals affirmed the settlement itself but reversed the attorneys’ fee and incentive awards. The court ruled that Oklahoma law, not federal law, governed the fee analysis and required use of a lodestar calculation rather than reliance solely on a percentage-of-the-fund approach. The court also held that incentive awards must be tied directly to documented time spent performing case-related services.
District Court Reapplies Fees After State Court Guidance
After the case was remanded, the Oklahoma Supreme Court issued guidance in Strack v. Continental Resources, Inc., clarifying how courts should evaluate attorneys’ fees in royalty class actions under state law. Relying on that decision, the district court reapplied Oklahoma’s statutory factors and again concluded that a 33.33% fee was reasonable, supported by a 2.15 lodestar multiplier. The court also adjusted the incentive award to reflect the representative’s documented service to the class.
A second appeal followed, in which the 10th Circuit vacated the fee award—not on its substance—but due to procedural notice deficiencies. After correcting the notice issue, the district court reinstated the same fee award.
Third Appeal Affirms Fee Award
In the third appeal, the 10th Circuit upheld the district court’s ruling in full. The appellate court concluded that Oklahoma law does not impose a strict cap on percentage-based attorneys’ fees or lodestar multipliers and found that the district court had properly applied the statutory factors and conducted a thorough reasonableness analysis.
The court ruled that awarding 33.33% of the $52 million settlement fund, totaling $17,333,333.33 in attorneys’ fees, did not constitute an abuse of discretion. As a result, the nearly $6 million net fee award was affirmed.