What happened
The Eighth Circuit on Wednesday affirmed attorneys' fee awards totaling more than $793,000 to North Dakota surface landowners who sued Continental Resources Inc. over drilling and oil-production operations, rejecting the company's challenge to the size of the awards and to the lack of oral argument on the fee motions.
The panel said the district court did not abuse its discretion in awarding $424,046.11 to Sheila and Ben Murphy and $369,003.90 to Keith, Omer and Roselyn Rychner after the landowners settled their underlying claims. Continental had argued that the awards were unreasonable and that the court should have capped recovery at the discounted amounts the landowners requested, but the Eighth Circuit said, "Finding no error, we affirm."
The dispute arose under North Dakota's Oil and Gas Production Damage Compensation Act, which creates a process to compensate surface landowners whose property is subject to mineral development. The Murphys and Rychners sued after compensation negotiations with Continental failed, and the cases produced years of litigation over discovery, experts, scheduling, dispositive motions and attorneys' fees before stipulated judgments resolved the underlying claims.
After those judgments, the landowners moved for fees and expenses. They requested $415,346.10 for the Murphys and $360,714.33 for the Rychners, explaining that the requests discounted some fees and omitted fees incurred after August 2023. The district court instead examined the full amounts incurred, found the hourly rates reasonable, considered North Dakota fee factors and then deducted about $91,000 from each case before entering the final fee awards.
Continental argued on appeal that the requested amounts should have served as caps and that any deductions should have been taken from those figures rather than from the fees actually incurred. The Eighth Circuit disagreed, saying the lodestar analysis allowed the district court to use the full record and that the court did not err by beginning with the fees actually incurred before making reductions.
The panel also rejected Continental's bid for a hearing on the fee motions. Although fee disputes can require a hearing when serious factual disputes exist, the Eighth Circuit said Continental's objections about the amount of fees, the length of the litigation, the volume of evidence and the number of billing entries did not require oral argument, and the district court could resolve the issues from the invoices and competing evidence.
Judge Kobes concurred in part and in the judgment, agreeing the awards should stand but faulting the majority's analysis of the lodestar issue. He wrote that the district court erred by confirming the rates and moving to the North Dakota factors without first calculating the reasonable number of hours worked, but he concluded the error was not reversible because Continental had invited the calculation method and the district court used that method with a different percentage reduction.