On May 5, 2026, the United States Court of Appeals for the Tenth Circuit reversed the district court in Rider v. OXY USA, Inc., Case No. 25-3142. The panel held that the United States District Court for the District of Kansas erred in denying class certification of royalty interest owners who alleged that Merit Energy Company, LLC and Merit Hugoton, L.P. (“Merit”) and Oxy USA, Inc. (“Oxy,” and together with Merit, “Defendants”) breached a 2008 class action settlement agreement governing royalty deductions in the Kansas Hugoton Gas Field. Applying its recently clarified ascertainability standard from Cline v. Sunoco, Inc., 159 F.4th 1171 (10th Cir. 2025), the panel found the proposed class plainly ascertainable and reversed with instructions to certify the class.
Background
In 1998, a group of plaintiffs filed the Littell v. OXY USA, Inc. class action in Kansas state court, alleging that Oxy was underpaying royalties on lease agreements in the Kansas Hugoton Gas Field. The court certified the class, and in January 2008, the parties entered into a settlement. Under the settlement, Oxy agreed to provide $16.7 million to a settlement fund and to limit gathering charges on future royalty payments to $0.15 per mmbtu. The settlement stated that it would be binding on the parties’ successors, assigns, and any entity into which a party may merge or consolidate.
Merit acquired Oxy’s assets in the Kansas Hugoton Gas Field in May 2014. At that time, Oxy informed Merit about the identity of royalty owners it had been paying under the Littell settlement and its methodology for calculating royalty payments. Merit, however, determined that it was not bound by the settlement’s future royalty provisions and began taking deductions that Plaintiffs allege violate the settlement.
Plaintiffs filed a putative class action in December 2023, asserting breach of contract claims against Defendants. After the district court denied Defendants’ motions to dismiss, the court denied class certification, finding the class was not ascertainable because determining which payees owned mineral interests in land burdened by leases acquired from Oxy was not “administratively feasible.” The court then concluded that Plaintiffs could not satisfy any other Rule 23 requirement.
The Tenth Circuit’s Analysis
A panel of the Tenth Circuit reversed, applying its intervening decision in Cline v. Sunoco, which rejected the “administrative feasibility” requirement for ascertainability. Under Cline, a class definition need only be (1) clearly defined and not vague, and (2) defined by objective criteria. The court found both requirements satisfied: Merit can identify each person or entity it has paid from its own records, and when Merit acquired Oxy’s assets, Oxy provided Merit with the identities of settlement payees.
The panel rejected Defendants’ arguments that individualized title searches would be required to connect payees to the Littell settlement. Citing Cline, the panel held that a defendant cannot defeat class certification by pointing to deficiencies in its own records or by arguing that it must individually review a large number of records. The panel observed that if Merit’s records are adequate for it to rely on to make regular payments, they are adequate for it to rely on to make additional payments should Plaintiffs have a meritorious claim.
Turning to the remaining Rule 23 requirements, the panel found the district court’s ascertainability error “tainted” the rest of its analysis. The panel held that commonality was satisfied because the central issue, i.e., whether Merit breached the settlement by deducting more than the permitted limit, applied to all leases and all wells under the settlement. Typicality and adequacy of representation were likewise met because the named plaintiffs’ claims were based on the same legal theory as the class. On predominance, the panel found that Defendants’ alleged systematic breach was the predominant issue, and that individualized damages questions do not defeat predominance as a matter of law. Finally, the panel concluded that superiority was satisfied, noting that a class action is the ideal method to litigate breach of a class action settlement.
The case is Rider v. OXY USA, Inc., No. 25-3142, __F.4th__ (10th Cir. 2026). The decision was authored by Judge Kelly, joined by Judges Bacharach and Federico.