Removal and Remand in an Oil and Gas Lease Case
Business Law Articles
By Paul R. Yagelski, Esquire
Rothman Gordon
Pittsburgh, Pennsylvania
When an oil and gas lease case is removed to federal district court on the basis of diversity, how does the district court determine the amount in controversy?
In Kopko v. Range Resources-Appalachia, LLC, 2020 WL 3496277 (W.D. Pa. June 29, 2020), the Plaintiff, Michael J. Kopko, brought an action against Range Resources-Appalachia, LLC (“Range) in the Court of Common Pleas of Washington County, Pennsylvania, for rescission of his oil and gas lease with Range. Range filed a Notice of Removal to the United States District Court for the Western District of Pennsylvania on the basis of diversity jurisdiction. Kopko then filed a Motion for Remand arguing that the amount in controversy required for diversity jurisdiction had not been met.
In asserting diversity jurisdiction, Range averred that the parties maintained diverse citizenship, because it is a limited liability company organized in Delaware and Kopko is a resident of Pennsylvania. As to the remaining diversity jurisdiction component, the amount in controversy was alleged to be in excess of $75,000. Specifically, Range averred that pursuant to their lease, Range paid Kopko and his co-lessors $176,550 as an upfront bonus plus $155,386.45 in royalties. Accordingly, Range asserted that the amount-in-controversy exceeded the $75,000 threshold.