Justia Energy, Oil & Gas Law Opinion Summaries

Antero Resources Company and South Jersey Gas Company entered into an eight-year contract for Antero to deliver natural gas from the Marcellus Shale formation to gas meters located on the Columbia Pipeline in West Virginia. The parties tied gas pricing to the Columbia Appalachia Index.During performance of the contract, the price of natural gas linked to the Index increased. South Jersey contested the higher prices, arguing that modifications to the Index materially changed the pricing methodology, and that the Index should be replaced with one that reflected the original agreement. Antero disagreed. South Jersey then sued Antero in New Jersey state court for failing to negotiate a replacement index, and began paying a lower price based on a different index. Antero then sued South Jersey in federal district court in Colorado, where its principal place of business was located, for breach of contract for its failure to pay the Index price. The lawsuits were consolidated in Colorado and the case proceeded to trial. The jury rejected South Jersey’s claims, finding South Jersey breached the contract and Antero was entitled to $60 million damages. South Jersey argued on appeal the district court erred in denying its motion for judgment in its favor as a matter of law, or, alternatively, that the court erred in instructing the jury. After review, the Tenth Circuit affirmed, finding a reasonable jury could find South Jersey breached its contract with Antero because the Index was not discontinued nor did it materially change. Furthermore, the Court found no defects in the jury instructions. View "Antero Resources Corp. v. South Jersey Resources Group" on Justia Law

After JME filed five claims for compensation with the Settlement Program, the Settlement Program determined that JME was a "failed business" under the meaning of the Settlement Agreement and calculated JME's compensation according to the Failed Business Economic Loss framework. The district court then granted discretionary review and agreed that JME was a failed business under the Settlement Agreement.Applying de novo review, the Fifth Circuit vacated and remanded, holding that the district court misinterpreted the Settlement Agreement's first and third definition of a "failed business" and erroneously concluded that the Settlement Program correctly classified JME as a failed business because JME ceased operations and wound down, or otherwise initiated or completed a liquidation of substantially all of its assets. View "Claimant ID 100081155 v. BP Exploration & Production, Inc." on Justia Law

The Supreme Court affirmed the district court’s order on summary judgment motions and order after bench trial in this dispute arising from an ill-conceived business conveyance plan during a downturn in the oil market, holding that the district court did not err or abuse its discretion in any respect.Three Garland brothers, who had separate entities providing specialized services to the oil industry, formed a company with their companies as members and the Garlands individually as members. Alex Mantle was president of the company. Mantle and the Garlands later entered into a memorandum of understanding (MOU) providing that Mantle and his wife would buy the company, but Mantle backed out of the deal. The Garlands liquidated the company, and this litigation followed. The district court disposed of some claims on summary judgment and resolved the remainder after a bench trial. The Supreme Court affirmed, holding (1) the Garlands and their entities did not abandon their counterclaims; (2) the MOU was an enforceable contract; (3) the district court correctly dismissed the Mantles’ fraud claim; (4) the district court correctly concluded that some conveyances by the Garlands fit the definitions of a fraudulent conveyance; (5) the elements for LLC veil-piercing were absent; and (6) the Garlands did not owe Mantle a duty of good faith. View "Garland v. Mantle" on Justia Law

Husky Ventures, Inc. (“Husky”) sued B55 Investments Ltd. (“B55”) and its president, Christopher McArthur, for breach of contract and tortious interference under Oklahoma law. In response, B55 filed counterclaims against Husky. A jury reached a verdict in Husky’s favor, awarding $4 million in compensatory damages against both B55 and McArthur and $2 million in punitive damages against just McArthur; the jury also rejected the counterclaims. In further proceedings, the district court entered a permanent injunction and a declaratory judgment in Husky’s favor. After the court entered final judgment, B55 and McArthur appealed, and moved for a new trial under Federal Rule of Civil Procedure 59(a) or, in the alternative, to certify a question of state law to the Oklahoma Supreme Court. The court denied the motion in all respects. On appeal, B55 and McArthur contended the district court erred in denying their motion for a new trial and again moved to certify a question of state law to the Oklahoma Supreme Court. In addition, they appealed the permanent injunction and declaratory judgment and argue that the district court erred in refusing to grant leave to amend the counterclaims. The Tenth Circuit dismissed B55 and McArthur’s claims relating to the motion for a new trial for lack of appellate jurisdiction and denied their motion to certify the state law question as moot. The Court otherwise affirmed the district court’s judgment on the remaining issues. View "Husky Ventures v. B55 Investments" on Justia Law

Borsheim Builders Supply, Inc., doing business as Borsheim Crane Service, ("Borsheim") appealed a declaratory judgment granting summary judgment to Mid-Continent Casualty Company and dismissing Borsheim's claims for coverage. After review of the facts presented, the North Dakota Supreme Court concluded the district court erred in concluding Construction Services, Inc. ("CSI"), and Whiting Oil and Gas Corporation were not insureds entitled to defense and indemnity under the "additional insured" endorsement in the commercial general liability ("CGL") policy Mid-Continent issued to Borsheim. Furthermore, the Court concluded the court erred in holding Mid-Continent had no duty to defend or indemnify Borsheim, CSI, and Whiting under the CGL policy for the underlying bodily injury lawsuit. View "Borsheim Builders Supply, Inc. v. Manger Insurance, Inc." on Justia Law

The Eighth Circuit affirmed the district court's grant of summary judgment to defendant in an action alleging claims of negligent misrepresentation, unjust enrichment, and denial of equitable relief. The court held that the district court did not err in granting defendant's summary judgment motion on the negligent misrepresentation claim because Lonesome Dove had not alleged any specific damage from the misrepresentation; the district court did not err by granting summary judgment as to the unjust enrichment claim because Lonesome Dove failed to present specific facts to illustrate any benefit to defendant other than the list of things in the contract; the district court did not abuse its discretion by denying Lonesome Dove equitable relief where Lonesome Dove had an adequate remedy at law in this case; and the district court did not err by denying Lonesome Dove's motion for a new trial where the verdict was not against the clear weight of the evidence. View "Lonesome Dove Petroleum, Inc. v. Holt" on Justia Law

Enduro Operating, LLC and Echo Production, Inc. were two of several parties to a joint operating agreement (JOA). Under the JOA, Echo, as a party wishing to undertake a new drilling project, had to provide notice of the proposed project to the other parties to the JOA, who then had thirty days to decide whether to opt in or out of the project. By opting in, a party agreed to share in the cost and risk of the project. If a party opted out of the project (as Enduro did in this case), then the party was deemed “non-consenting,” and exempt from any of the cost or risk associated with the new project, but could not share in any of the profits from the new project until the consenting parties recovered four-hundred percent of the labor and equipment costs invested in the new project. The question before us is what activities are adequate as a matter of law to 6 satisfy the contractual requirement that a consenting party actually commence the 7 drilling operation. The Court of Appeals concluded that the language in Johnson v. Yates Petroleum Corp., 981 P.2d 288, indicating that “any” preparatory activities would be sufficient was too permissive. The Court of Appeals was persuaded that Echo’s lack of on-site activity at the proposed well site, other than surveying and staking, and lack of a permit to commence drilling was evidence as a matter of law that Echo had not actually commenced drilling operations. The Court of Appeals reversed the district court’s grant of summary judgment in favor of Echo and remanded for an entry of summary judgment in favor of Enduro. The New Mexico Supreme Court reversed, holding that the failure to obtain an approved drilling permit within the relevant commencement period was not dispositive; “[a] party may prove that it has actually commenced drilling operations with evidence that it committed resources, whether on-site or off-site, that demonstrate its present good-faith intent to diligently carry on drilling activities until completion. “ View "Enduro Operating LLC v. Echo Prod., Inc." on Justia Law

The plaintiffs were four companies with common owners and operators: Halifax-American Energy Company, LLC; PNE Energy Supply, LLC (PNE); Resident Power Natural Gas & Electric Solutions, LLC (Resident Power); and Freedom Logistics, LLC d/b/a Freedom Energy Logistics, LLC (collectively, the “Freedom Companies”). The defendants were three companies and their owners: Provider Power, LLC; Electricity N.H., LLC d/b/a E.N.H. Power; Electricity Maine, LLC; Emile Clavet; and Kevin Dean (collectively, the “Provider Power Companies”). The Freedom Companies and the Provider Power Companies were engaged in the same business, arranging for the supply of electricity and natural gas to commercial and residential customers in New Hampshire and other New England states. The parties’ current dispute centered on a Freedom Company employee whom the defendants hired, without the plaintiffs’ knowledge, allegedly to misappropriate the plaintiffs’ confidential and proprietary information. According to plaintiffs, defendants used the information obtained from the employee to harm the plaintiffs’ business by improperly interfering with their relationships with their customers and the employee. A jury returned verdicts in plaintiffs’ favor on many of their claims, including those for tortious interference with customer contracts, tortious interference with economic relations with customers, tortious interference with the employee’s contract, and misappropriation of trade secrets. The jury awarded compensatory damages to plaintiffs on each of these claims, except the misappropriation of trade secrets claim, and included in the damages award attorney’s fees incurred by plaintiffs in prior litigation against the employee for his wrongful conduct. Subsequently, the trial court awarded attorney’s fees to the plaintiffs under the New Hampshire Uniform Trade Secrets Act (NHUTSA). On appeal, defendants challenged: (1) the jury’s verdicts on plaintiffs’ claims for tortious interference with customer contracts and the employee’s contract; (2) the jury’s award of damages for tortious interference with customer contracts and tortious interference with economic relations, and its inclusion in that award of the attorney’s fees incurred in the plaintiffs’ prior litigation against the employee; and (3) the trial court’s award of attorney’s fees to plaintiffs under the NHUTSA. Finding no reversible error, the New Hampshire Supreme Court affirmed. View "Halifax-American Energy Company, LLC v. Provider Power, LLC" on Justia Law

P&P Industries, LLC, d/b/a United Oilfield Services, and Pauper Industries, Inc., appealed a judgment entered in favor of Continental Resources, Inc., after a jury returned a verdict finding United and Pauper's conduct constituted fraud but they did not breach their contracts with Continental. Continental was an oil producer; United and Pauper provided transportation, water hauling, and related services and materials to Continental in North Dakota. Pauper signed a Master Service Contract with Continental, and United signed a Master Service Contract. Continental sued United and Pauper, seeking damages for claims of breach of contract, tortious breach of contract, breach of fiduciary duty, fraud, and deceit. Continental alleged United and Pauper violated state and federal limits and regulations on the number of hours a truck driver may drive; they violated Continental's employee policies, and engaged in improper and fraudulent billing. After a hearing, the district court denied United's motion for summary judgment on Continental's claims; denied Continental's motion for summary judgment on United's breach of contract, promissory estoppel, and tortious breach of contract counterclaims; and denied Continental's motion for summary judgment on its fraud and breach of contract claims. The court granted Continental's motion for summary judgment against United's breach of fiduciary duty and constructive fraud counterclaims. The court also granted summary judgment on Continental's motion related to damages and ruled, if United prevailed at trial, its damages would be limited to the net profits it could have earned during the 30-day termination notice period, overall expenses of preparation, and its expenses in pursuit of reasonable efforts to avoid or minimize the damaging effects of the breach. United unsuccessfully moved for reconsideration of the damages issue. A jury trial was held. In deciding Continental's claims, the jury found neither United nor Pauper breached its contract obligations to Continental, both United and Pauper's conduct was fraudulent or accompanied by fraud, both United and Pauper's conduct was deceitful or accompanied by deceit, and the jury awarded Continental $2,415,000 in damages for its claims against United but did not award Continental any damages for its claims against Pauper. In deciding United's counterclaims, the jury found Continental breached its contract with United, but Continental was excused from performing based on United's prior material breach, United's failure to perform a condition precedent, United's fraud or deceit, and equitable estoppel. Judgment on the jury's findings was entered against Pauper. Continental was awarded its costs and disbursements against United and Pauper, jointly and severally. United and Pauper argued on appeal to the North Dakota Supreme Court that the verdicts were inconsistent and the district court erred in limiting the amount of damages United could seek on its counterclaim. The Supreme Court reversed, finding the "verdict is inconsistent and perverse and cannot be reconciled." The matter was remanded for a new trial. View "Continental Resources, Inc. v. P&P Industries, LLC I" on Justia Law

Counce Energy BC #1, LLC, appealed the judgment entered on a jury verdict awarding Continental Resources, Inc., $153,666.50 plus costs and disbursements for breaching its contract with Continental by failing to pay its share of expenses to drill an oil and gas well, and dismissing with prejudice Counce's counterclaims. Because the district court lacked subject matter jurisdiction over Continental's breach of contract action and Counce's counterclaims, the North Dakota Supreme Court vacated the judgment. View "Continental Resources, Inc. v. Counce Energy BC #1, LLC" on Justia Law