Fawcett v. Oil Producers, Inc. of Kansas
Kansas Supreme Court
352 P.3d 1032 (2015)
The L. Ruth Fawcett Trust (Fawcett) (plaintiff) represented a group of mineral-rights owners. Oil Producers, Inc. of Kansas (Producers) (defendant) entered into a series of leases with Fawcett to extract gas from Fawcett’s land in exchange for royalty payments. The lease language required Producers to pay Fawcett a royalty on gas sold at the wellhead. Producers sold the raw natural gas at the wellhead to third parties. The third parties processed the gas before the gas entered the interstate pipeline system. The price that Producers was paid by the third parties was based on a formula that started with the price the third parties received for the processed gas; the formula then deducted certain costs incurred or adjustments made by the third party. The royalties Fawcett received from Producers was also based on this formula. Fawcett argued the subtracted costs and adjustments were Producers’ sole responsibility. Fawcett contended that raw natural gas was not marketable until it entered an interstate pipeline. Thus, Fawcett stated that under the marketable-condition rule, the royalties Fawcett received were less than they should be. Producers argued that it fulfilled its duty to market by entering into purchase agreements for sale of the gas at the wellhead. The trial court granted summary judgment to Fawcett. The appeals court affirmed. Producers then appealed to the state supreme court.
Rule of Law
Holding and Reasoning (Biles, J.)
What to do next…
Unlock this case brief with a free (no-commitment) trial membership of Quimbee.
You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 725,000 law students since 2011. Some law schools—such as Yale, Berkeley, and Northwestern—even subscribe directly to Quimbee for all their law students.Unlock this case briefRead our student testimonials
Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.
Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students.Learn about our approachRead more about Quimbee
Here's why 725,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 45,700 briefs, keyed to 983 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.