A&B Campbell Family LLC, et al. v. Williams Partners, L.P., et al.

Summary

The United States District Court for the Middle District of Pennsylvania addresses three motions to dismiss claims arising from alleged underpayment of royalties and anti-competitive conduct related to natural-gas gathering services in the Marcellus Shale. The court holds that the plaintiffs lack antitrust standing because they did not allege injury to competition and were not consumers or competitors in the relevant market. The court also concludes that the complaint insufficiently alleges an agreement among the defendants and grants the motions to dismiss the Sherman Act claims with prejudice.

Holdings

1. Plaintiffs lacked antitrust standing because they did not plead an injury resulting from a reduction in competition in a relevant market, were not consumers or competitors in that market, and did not show that their royalty injury was inextricably intertwined with the alleged anticompetitive scheme.
2. Even if plaintiffs had antitrust standing, their Section 1 and Section 2 Sherman Act claims failed because the second amended complaint did not allege facts establishing an actual agreement among all defendants.
3. Plaintiffs failed to plead an association-in-fact RICO enterprise because they alleged only ordinary business relationships and conclusory assertions of a common purpose, without descriptive facts showing relationships and coordinated activity among all defendants.
4. Plaintiffs' RICO conspiracy claim failed because the underlying RICO claim was deficient.
5. Plaintiffs did not state a breach-of-contract claim because the leases permitted calculation of royalties at the wellhead using the net-back method, including deduction of post-production costs.
6. Further leave to amend was denied because plaintiffs had already had ample opportunity to cure the pleading deficiencies and another amendment would be futile or inequitable.

Questions Presented

1. Whether plaintiffs pleaded antitrust injury sufficient to confer standing under Sections 1 and 2 of the Sherman Act.
2. Whether plaintiffs adequately pleaded an agreement or conspiracy among the defendants to restrain trade or monopolize commerce.
3. Whether plaintiffs adequately pleaded an association-in-fact RICO enterprise.
4. Whether plaintiffs adequately pleaded a RICO conspiracy under 18 U.S.C. § 1962(d).
5. Whether the alleged deductions of post-production costs breached the oil and gas leases under Pennsylvania law.
6. Whether plaintiffs should receive further leave to amend.

Disposition

dismissed