Justia Energy, Oil & Gas Law Opinion Summaries

Sunpin Energy Services, LLC and Ralph P. Lapinkas, Jr. sought to construct a large-scale ground-mounted solar energy system on a parcel of undeveloped, mostly forested land in Petersham, Massachusetts. Because the proposed site was outside the town’s designated solar electric overlay district, Sunpin applied for a special permit from the Zoning Board of Appeals. The project would require clearing trees from approximately 14.3 acres, and Sunpin secured an order of conditions from the town conservation commission under the Wetlands Protection Act. The permit application was denied after one of three board members voted against it, citing concerns about deforestation and referencing the town’s bylaw goals of maintaining the town’s beauty and proper land use.The plaintiffs challenged the board’s denial in the Land Court Department. The Land Court judge granted summary judgment in favor of the board, concluding that the board member properly applied the zoning bylaw criteria, including the protection of public health, safety, and welfare, and concerns about tree removal. The plaintiffs appealed, and the Massachusetts Appeals Court vacated the judgment, holding that the board’s decision was arbitrary and capricious, improperly favoring forest preservation over solar energy siting and relying on speculation about future development.The Supreme Judicial Court of Massachusetts reviewed the case and held that, under the Dover Amendment’s solar provision (G. L. c. 40A, § 3, ninth paragraph), municipalities must provide reasonable opportunities for solar energy systems and may not deny a special permit unless it is necessary to protect public health, safety, or welfare. The Court found that the denial, based on general concerns about tree cutting, amounted to a blanket prohibition in a town that is ninety-seven percent forested, which was improper. The Court vacated the Land Court’s judgment and remanded for further proceedings consistent with its opinion. View "Sunpin Energy Services, LLC v. Zoning Board of Appeals of Petersham" on Justia Law

The case concerns disputes between two groups of North Dakota surface landowners and an oil and gas company with rights to drill on their land. After the company gave statutory notice and commenced drilling, the landowners and the company were unable to reach an agreement on compensation for damages to the land, as required by North Dakota’s Oil and Gas Production Damage Compensation Act. Both sets of landowners, represented by the same law firm, filed separate lawsuits in federal court seeking compensation for damages. The cases involved substantial litigation over discovery, scheduling, expert witnesses, and attorneys’ fees, with mediation attempts failing. Eventually, the parties reached stipulated judgments settling the claims for monetary amounts.After settlement, the landowners sought attorneys’ fees under North Dakota law, submitting discounted requests and supporting invoices. The company objected, arguing that the requests were excessive given the simplicity of the dispute and raising concerns such as alleged excessive billing, duplicative work, and poor documentation. The company also requested an in-person hearing on the fee motions, which was denied.The United States District Court for the District of North Dakota applied the lodestar method to determine reasonable attorneys’ fees, starting with the actual fees incurred, then reducing the amounts based on factors such as poor documentation and litigation conduct. The court awarded the landowners more than they requested, after finding the hourly rates and the time expended reasonable, but applying a 10% reduction for documentation issues and delays. The court also denied the company’s motion for oral argument.On appeal, the United States Court of Appeals for the Eighth Circuit affirmed. The court held that the district court did not abuse its discretion in its fee award calculations, its consideration of relevant factors, or in denying an oral argument. The court found that the district court’s approach and reductions were consistent with precedent and North Dakota law. View "Murphy v. Continental Resources, Inc." on Justia Law

A group of Kansas residential natural gas consumers, who purchase gas from local distributors, sued several interstate wholesalers. They alleged that during Winter Storm Uri, the wholesalers manipulated the market and sold natural gas to local distributors at exorbitant prices, leading to unprecedented increases in retail gas prices. The plaintiffs claimed these actions violated the Kansas Consumer Protection Act (KCPA) by forcing local distributors into the high-priced spot market and passing the excessive costs on to consumers. The plaintiffs contended that even though the alleged misconduct occurred in the wholesale market, it had a direct and significant impact on retail customers.The United States District Court for the District of Kansas consolidated five class actions and reviewed the claims. The district court granted the defendants’ joint motion to dismiss, finding that the Federal Energy Regulatory Commission (FERC) has exclusive jurisdiction over interstate wholesale natural gas rates under the Natural Gas Act (NGA), and that the plaintiffs’ state-law claims were preempted. The court concluded that the challenged conduct concerned wholesale transactions, which are subject to comprehensive federal regulation.The United States Court of Appeals for the Tenth Circuit reviewed the case. It affirmed the district court’s decision, holding that the NGA field-preempts the plaintiffs’ KCPA claims because the claims are aimed directly at, and challenge, transactions and practices in the interstate wholesale natural gas market, an area reserved for federal oversight. The Tenth Circuit distinguished this case from Supreme Court precedent where state-law claims were not preempted, emphasizing that these plaintiffs’ claims targeted wholesale sales rather than background marketplace conditions. The court concluded that the exclusive jurisdiction of FERC over wholesale sales foreclosed state-law consumer protection claims based on those transactions. View "Mehl v. BP Energy Company" on Justia Law

A company with a lease in the Brentwood Oil Field, Contra Costa County, proposed to convert an inactive oil and gas extraction well into a water injection well for disposing of treated wastewater, a byproduct of oil and gas drilling. The well in question had been built in 1963, used for extraction until 1984, and then plugged. The company currently disposed of wastewater by trucking it offsite but sought to inject it underground instead. Regulatory agencies, including CalGEM, the State Water Board, and the Regional Water Board, expressed concerns about potential contamination of local clean water sources due to possible migration of wastewater. After additional technical analysis and the imposition of specific project conditions, these concerns were resolved, and CalGEM approved the project, issuing a notice of exemption (NOE) under the California Environmental Quality Act (CEQA), relying on the “class 1” categorical exemption for minor alterations of existing facilities with negligible expansion of use.The Contra Costa County Superior Court found substantial evidence did not support CalGEM’s determination that the project fell within the class 1 exemption, concluding that converting an oil and gas well into a water injection well did not constitute negligible or no expansion of former use. CalGEM agreed to comply with the writ. On appeal, the First Appellate District, Division Five, reversed, holding that the exemption applied because the environmental risks of the new use were negligible.The Supreme Court of California reviewed the case and reversed the Court of Appeal’s judgment. The Supreme Court held that the phrase “negligible or no expansion of existing or former use” in the class 1 exemption refers to the nature or degree of a structure or facility’s use, not to the risk of environmental harm caused by such a change. The court remanded the case for reconsideration under this proper framework and did not reach the additional question regarding project conditions as mitigation. View "Sunflower Alliance v. Dept. of Conservation" on Justia Law

An energy company, seeking to address disposal challenges associated with wastewater from its hydraulic fracturing operations, engaged a water technology firm to design and construct a specialized treatment facility. The two sides entered into a series of agreements, culminating in a comprehensive contract for the facility’s construction. Before this final contract was executed, the water technology firm discovered that its design would not meet the energy consumption requirements critical to the energy company, but did not disclose this information. The firm also failed to reveal risks associated with a proposed design change that could affect the quality of the facility’s waste byproduct. Relying on the firm’s representations, the energy company signed the contract and later approved the design change. When the facility failed to meet contractual specifications—producing unusable waste and exceeding power limits—the energy company terminated the contract and sued for breach and fraud.The case was tried in the Denver District Court, which found that the water technology firm had fraudulently induced the energy company into signing the contract by concealing and failing to disclose material facts. The trial court held that the economic loss rule did not bar the fraud claim because the misconduct occurred prior to contract formation. The court awarded the energy company substantial damages and attorney fees. On appeal, the Colorado Court of Appeals affirmed, though it reasoned that the contracts were interrelated but found an independent tort duty still existed.The Supreme Court of Colorado reviewed whether the economic loss rule barred the fraud claim. The Court held that the interrelated contracts doctrine does not apply when each contract is a stand-alone transaction and that the fraudulent conduct occurred before the governing contract was executed, inducing its formation. Therefore, the economic loss rule does not bar the fraud claim. The judgment was affirmed, and the case was remanded for a determination of reasonable attorney fees. View "Veolia Water Techs. v. Antero Treatment LLC" on Justia Law

A resident of Treasure County, Montana, submitted a petition for a citizen initiative proposing a county ordinance to establish a permitting process and regulatory standards for wind energy conversion systems (WECS) exceeding certain size thresholds. The ordinance sought to regulate various aspects of WECS, including setbacks, noise, wildlife impacts, and penalties for non-compliance, and would have required the county commissioners to administer and enforce the permitting regime. After the petition’s form was approved, the petitioner made minor revisions and resubmitted it.Following these events, the Board of County Commissioners of Treasure County filed a complaint in the Montana Sixteenth Judicial District Court, seeking a declaratory judgment that the proposed ordinance was invalid and unconstitutional. The County argued that specific Montana statutes—namely, Title 76, chapter 2—set forth exclusive processes and requirements for county land-use and zoning regulation, with which the proposed ordinance did not comply. The petitioner responded, generally denying the allegations and seeking a declaration that the ordinance was valid, or that invalid provisions could be severed.The District Court construed the parties’ motions for summary judgment as addressing the validity and constitutionality of the ordinance. It concluded that the ordinance was invalid under § 7-5-135, MCA, because it purported to regulate land use under the county’s general powers when specific statutes governed such regulations, and its provisions exceeded the county’s legislative authority. The court did not reach the constitutional question.On appeal, the Supreme Court of the State of Montana affirmed, holding that this particular proposed ordinance was invalid because it created a permitting and enforcement regime outside the authority delegated to the county by the Legislature. The court clarified that its holding was narrow and did not foreclose all citizen initiatives affecting land use, but only invalidated this ordinance as drafted. View "Treasure County v. Edlund" on Justia Law

A Barbados-based company acquired an 18 percent share in a Venezuelan oil company, alongside two state-owned shareholders. When dividends were distributed in 2008 and 2009, the state-owned entities received their share, but the Barbados-based company did not. In 2013, the company initiated arbitration proceedings against Venezuela in The Hague, seeking damages for not receiving its dividends. The arbitral tribunal, after a jurisdictional and merits phase, eventually awarded the company $59 million plus costs, fees, and interest. During the proceedings, a dispute arose about which government and legal counsel represented Venezuela, given the contested presidency between Nicolás Maduro and Juan Guaidó.The company sought to enforce the arbitration award in the United States District Court for the District of Columbia. Venezuela argued that enforcement would violate U.S. public policy by contradicting the U.S. President’s official recognition of the Guaidó government, as the tribunal had allowed the Maduro regime to change legal counsel during the arbitration. The district court rejected Venezuela’s argument, concluding that the President’s recognition power was not a cognizable public policy under the New York Convention, and even if it were, enforcement would not violate it. The court granted the company’s petition to enforce the award.On appeal, the United States Court of Appeals for the District of Columbia Circuit affirmed the district court’s judgment. The appellate court held that none of the exceptions in the New York Convention, including the public policy exception, applied to prevent recognition and enforcement of the arbitral award. The court found that enforcing the award did not undermine the President’s exclusive recognition power or express any view on the legitimacy of either Venezuelan government, and thus did not violate fundamental U.S. public policy. View "Venezuela US SRL v. Bolivarian Republic of Venezuela" on Justia Law

At an oil and gas wellsite in Texas, a contractor, TCP Specialists, LLC, provided wireline services alongside other companies that managed the well’s pressure and equipment. During a maintenance operation, a pressurized pipe ruptured while the well was being depressurized, causing fatal injuries to two workers and serious injury to a TCP employee. Although TCP did not control the depressurization or supply the faulty pipe, its employees were standing near the wellhead at the time of the accident. The Department of Labor alleged that TCP exposed its employees to known hazards by not establishing a buffer zone around the well during depressurization.An administrative law judge (ALJ) of the Occupational Safety and Health Review Commission held a hearing and found that TCP had violated the General Duty Clause of the Occupational Safety and Health Act. The ALJ determined that TCP had control over its employees’ proximity to the hazard and that a buffer zone would have been a feasible and effective abatement measure. The ALJ concluded that TCP failed to implement adequate safety policies and upheld the citation, imposing a penalty. The full Commission declined to review the ALJ’s decision, making it a final order.The United States Court of Appeals for the District of Columbia Circuit reviewed TCP’s petition and denied it. The court held that the hazard was properly defined by reference to the physical agents (the frac stack and pressurized piping) and that TCP had control over its employees’ exposure to that hazard. The court found substantial evidence supported the ALJ’s conclusions regarding the feasibility and effectiveness of a buffer zone, and rejected TCP’s constitutional and procedural arguments. The order upholding the citation and penalty was affirmed. View "TCP Specialists, LLC v. Secretary of Labor" on Justia Law

SWN Production Company, LLC sought to drill multiple horizontal natural gas wells on a 301-acre tract within the City of Weirton, West Virginia. The City required a conditional use permit for oil and gas extraction under its zoning ordinance. SWN applied for such a permit, and the City’s Board of Zoning Appeals (BZA) held hearings where community members raised concerns about traffic, noise, and the effect on local development. The BZA denied SWN’s application, citing incompatibility with the City’s comprehensive development plan and other adverse impacts. Afterward, SWN obtained a drilling permit from the West Virginia Department of Environmental Protection (DEP).SWN filed two actions in the Circuit Court of Brooke County: a petition for a writ of certiorari challenging the BZA’s decision and a complaint seeking a declaration that the City’s zoning ordinance was preempted by state law, especially the Natural Gas Horizontal Well Control Act. The circuit court rejected SWN’s preemption argument and affirmed the BZA’s denial of the permit. SWN appealed both rulings to the Intermediate Court of Appeals of West Virginia (ICA). The ICA reversed the circuit court on the preemption issue, finding the City’s ordinance conflicted with state law, but dismissed SWN’s appeal of the certiorari ruling for lack of jurisdiction.The Supreme Court of Appeals of West Virginia reviewed both appeals. It held that there was no irreconcilable conflict between the City’s zoning ordinance and the state’s environmental statutes; rather, any overlap was incidental and not preempted. The Court reversed the ICA’s decision on preemption and reinstated the circuit court’s order dismissing SWN’s facial preemption challenge. Regarding the certiorari appeal, the Court affirmed the ICA’s dismissal, holding that the ICA lacked subject-matter jurisdiction to review extraordinary remedies such as certiorari. View "City of Weirton v. SWN Production Company, LLC" on Justia Law

The dispute centers on land in Calcasieu Parish, Louisiana, owned by a public entity, where oil and gas exploration occurred for decades under a mineral lease originally granted in 1943. The plaintiff acquired several tracts of this land between 1968 and 1987, with prior owners reserving mineral rights. The mineral lease was assigned multiple times before terminating in 2020. The plaintiff alleged that the defendants, or their predecessors, caused environmental damage to the property through oil and gas operations predating the plaintiff’s ownership, and sought damages under both tort and contract theories.Defendants filed exceptions of no right of action, arguing that under the “subsequent purchaser rule” articulated in Eagle Pipe and Supply, Inc. v. Amerada Hess Corp., a property owner cannot recover for damage inflicted before their purchase unless assigned the prior owner’s rights. The trial court denied these exceptions. On appeal, the Louisiana Court of Appeal, Third Circuit, reversed in part. It dismissed all claims against one defendant (Honeywell) for preacquisition damage, and limited claims against the other (Texas Pacific) to an 87-day period when both the plaintiff and Texas Pacific’s predecessor simultaneously held interests in one tract.The Supreme Court of Louisiana granted review. It extended the subsequent purchaser rule from Eagle Pipe to cases involving mineral leases, holding that a purchaser of property, absent an assignment or subrogation, has no right of action for preacquisition property damage caused by mineral lessees. However, the court recognized an exception for damages occurring during the period when the plaintiff owned the property and the defendant held lease rights. Additionally, the court held that a current surface owner may enforce the prudent operator standard under Mineral Code article 122 for end-of-lease obligations that become due upon termination, but not for historic operational damage. The judgment was affirmed in part, reversed in part, and remanded. View "VINTON HARBOR & TERMINAL DISTRICT VS. REUNION ENERGY COMPANY" on Justia Law