PHILLIPS PETROLEUM CO. v. SHUTTS 472 U.S. 797 (1985) CASE BRIEF

PHILLIPS PETROLEUM CO. V. SHUTTS

472 U.S. 797 (1985).

NATURE OF THE CASE: This was an appeal from a class action suit for breach of contract with a dispute over whether the process due for a class action requires an opt in procedure instead of an opt out one.

FACTS: A class action was filed against Phillips Petroleum (D) on behalf of about 33,000 royalty owners. The action was taken in Kansas. D had obtained natural gas from leased land in eleven different states. About 97% of the plaintiffs had no contacts with Kansas. The class was certified. Shutts (P) and other lessors sought to recovery interest on royalty payments due under their leases. Notice of the action was sent by first-class mail to each plaintiff, with an explanation that each plaintiff would be bound unless he opted out of the suit. The final class consisted of 28,000 class members residing in 50 states and overseas. The trial court asserted personal jurisdiction. During trial it applied only Kansas contract law. Damages were awarded against D. D sought certiorari to the Supreme Court; the Due Process Clause prevented Kansas courts from exercising jurisdiction over plaintiffs who had no contacts with Kansas and Full Faith and Credit prohibited application of Kansas law to all the claims. The Supreme Court of Kansas affirmed and the Supreme Court granted certiorari. D's argument is that unless out-of-state Ps affirmatively opt in to the class, the Kansas courts may not exert jurisdiction over their claims.

ISSUE:

RULE OF LAW:

HOLDING AND DECISION:

LEGAL ANALYSIS:

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