JAMES P. JONES, District Judge.
The defendant CNX Gas Company LLC ("CNX") has filed a Motion to Dismiss Plaintiff's First Amended Class Action Complaint Pursuant to Federal Rules of Civil Procedure 12(b)(6) and 12(b)(7). The motion has been fully briefed by the parties.
The court granted leave to file the Amended Complaint over the objections of CNX. Addison v. CNX Gas Co., No. 1:10CV00065, 2012 WL 4127614 (W.D. Va. Aug. 1, 2012). CNX now moves to dismiss the Amended Complaint on the grounds that (1) it fails to join indispensable parties; (2) its claims are barred by the applicable statute of limitations; (3) the plaintiff's request for a court-appointed expert is premature; (4) the injunctive relief sought is contrary to the Virginia Gas and Oil Act; (5) the breach of contract claim is barred because of a failure to adequately allege a notice of breach as required under the applicable coal bed methane lease; and (6) the claim that royalties due under the lease were improperly calculated fails to state a cognizable basis for relief.
Upon careful consideration of the parties' arguments, I find that the motion should be denied.
The court has previously considered and rejected CNX's arguments concerning the failure to add as parties the applicable coal owners. Id. at *3. The statute of limitations defense has similarly been considered and overruled in the court's ruling on a prior motion to dismiss. Addison v. CNX Gas Co., No. 1:10cv00065, 2011 WL 4553090, at *12-13 (W.D. Va. May 13, 2011), report and recommendations accepted, 2011 WL 4527812 (W.D. Va. Sept. 28, 2011).
I also find that at this pleading stage of the case, the requests for a court-appointed expert and for injunctive relief are at least plausible. In addition, I find adequate at this point the notice of breach allegations.
One of the plaintiff's claims is that the royalties paid were improperly calculated in that they did not reflect the actual price for which the gas was sold. She alleges that CNX "used gas prices that were less than the actual proceeds received by CNX, including prices and proceeds CNX realized/received through swap contracts and other hedging and marketing activities." (Am. Compl. ¶ 59.)
The Oil, Gas and Coalseam Gas Lease, an exhibit to the Amended Complaint, provides for the following royalties to be paid to the plaintiff:
(Am. Compl., Ex. A ¶ 3(a). CNX argues that this provision ties the royalty to the production and sale of specific gas, less certain post-productions deductions, and not to any "market speculation" or "financial hedging activity" which may be engaged in by CNX. (Mem. in Supp. of Mot. to Dismiss 14.) The plaintiff responds that because CNX was obligated under the law to obtain the highest price for the gas, to the extent it was rewarded by related derivative arrangements, those arrangements may be considered in determining whether CNX has met its obligation.
While CNX may be ultimately correct on the merits, I find that as a pleading matter, the claim cannot be dismissed at this stage of the case.
For these reasons, it is