Justia Energy, Oil & Gas Law Opinion Summaries

Chesapeake Exploration, LLC (Chesapeake) and Morton Production Company, LLC (Morton) entered into a joint operating agreement for oil and gas development in Converse County, Wyoming. Morton sued Chesapeake for breach of contract, violation of the Wyoming Royalty Payment Act (WRPA), and conversion after Chesapeake adjusted Morton’s ownership interest and withheld production proceeds. Chesapeake counterclaimed for breach of contract, unjust enrichment, and breach of the implied covenant of good faith and fair dealing. The district court granted summary judgment in favor of Morton.Chesapeake appealed, challenging the district court’s summary judgment on Morton’s breach of contract claim, the supplemental decision on Chesapeake’s counterclaims and affirmative defenses, and the determination that Chesapeake violated the WRPA. The Wyoming Supreme Court reviewed the case.The Wyoming Supreme Court affirmed the district court’s decision. It held that Chesapeake breached the contract by adjusting Morton’s ownership interest and billing for costs beyond the twenty-four-month limitation period specified in the 1985 COPAS Form, which was incorporated into the joint operating agreement. The court found the language in the COPAS Form unambiguous and declined to consider extrinsic evidence. The court also upheld the district court’s use of Rule 60(a) to correct a clerical error in its original order and found that Chesapeake’s counterclaims were properly dismissed as they were rendered moot by the summary judgment on Morton’s claims. Additionally, the court ruled that Chesapeake violated the WRPA by withholding production proceeds without placing the disputed funds in escrow, as required by the statute. View "Chesapeake Exploration, LLC, v. Morton Production Company, LLC" on Justia Law

The City of New Orleans filed a lawsuit against several pipeline operators and Entergy New Orleans LLC, alleging that their oil and gas production and transportation activities caused damage to the City's coastal zone. The City claimed that Entergy allowed its pipeline canals to widen and erode, threatening the City's storm buffer. The lawsuit was filed under Louisiana’s State and Local Coastal Resources Management Act of 1978 (SLCRMA).The defendants removed the case to federal court, arguing that Entergy, the only in-state defendant, was improperly joined to defeat diversity jurisdiction. Entergy consented to the removal and argued that it was exempt from SLCRMA’s permit requirements because its activities commenced before the statute's effective date. The City moved to remand the case to state court, but the United States District Court for the Eastern District of Louisiana denied the motion, dismissed Entergy as a party, and stayed the case pending appeal.The United States Court of Appeals for the Fifth Circuit reviewed the case and affirmed the district court's judgment. The appellate court held that Entergy was improperly joined because its activities were exempt under SLCRMA’s Historical-Use Exception, which applies to uses legally commenced before the statute's effective date. The court found no reasonable basis for the City to recover against Entergy, thus disregarding Entergy's citizenship and establishing complete diversity among the parties. The court also rejected the City's argument that it was merely a nominal party representing Louisiana, concluding that the City filed the suit on its own behalf and stood to benefit from a favorable ruling. Consequently, the appellate court affirmed the district court's denial of the City's motion to remand. View "New Orleans City v. Aspect Energy" on Justia Law

Petitioners sought review of the Federal Energy Regulatory Commission's (FERC) grant of an abandonment incentive to ITC Midwest, LLC (ITC). This incentive allows ITC to recover 100% of its prudently incurred costs if a planned transmission project is abandoned for reasons beyond its control. Petitioners, a group of organizations whose members purchase electricity, argued that ITC's ownership of the project was uncertain due to ongoing litigation challenging the Iowa Right of First Refusal statute.The Federal Energy Regulatory Commission approved ITC's request for the abandonment incentive, finding that the project met the necessary criteria, including enhancing reliability and reducing congestion. Petitioners filed a protest, which FERC rejected, stating that regulatory or litigation uncertainty does not preclude granting an abandonment incentive. Petitioners then sought rehearing, which FERC also denied, reiterating that the approval was consistent with its precedent.The United States Court of Appeals for the District of Columbia Circuit reviewed the case. The court determined that petitioners lacked Article III standing because they failed to show imminent injury from FERC's orders. The court noted that petitioners' claims of potential future higher rates were speculative and not concrete or imminent. The court also found that petitioners' interest in the proper application of the law and potential collateral estoppel effects did not constitute a cognizable injury. Consequently, the court dismissed the petition for lack of jurisdiction. View "Industrial Energy Consumers of America v. FERC" on Justia Law

Sentinel Energy Center, LLC owns a power plant in North Palm Springs and hired DGC Operations, LLC (OPS) to manage and operate the plant. In 2017, during annual maintenance, five OPS employees failed to follow the new depressurization protocol for the fuel filter skid, leading to an explosion that killed Daniel Collins. Collins's family sued Diamond Generating Corporation (DGC), which has a 50% indirect ownership in Sentinel and is the parent company of OPS, claiming DGC's negligence in safety oversight led to Collins's death.The Superior Court of Riverside County denied DGC's request to instruct the jury on the Privette doctrine, which generally shields a hirer from liability for injuries to an independent contractor's employees. The jury found DGC 97% at fault and awarded the plaintiffs over $150 million. DGC's motions for nonsuit and judgment notwithstanding the verdict, based on the Privette doctrine, were also denied.The Court of Appeal of the State of California, Fourth Appellate District, Division Three, reviewed the case. The court declined to grant judgment notwithstanding the verdict to DGC, citing unresolved factual questions about whether DGC retained control over the plant and negligently exercised that control. However, the court found that the trial court erred in not instructing the jury on the Privette doctrine and its exceptions, which could have led to a more favorable outcome for DGC. Consequently, the appellate court reversed the judgment and remanded the case for a new trial with instructions to include the Privette doctrine and its exceptions. View "Collins v. Diamond Generating Corp." on Justia Law

Kenny Savoie, a former employee of Pritchard Energy Advisors, LLC (PGA), filed a breach-of-contract lawsuit against Thomas Pritchard, his former boss, in the United States District Court for the Western District of Louisiana. Savoie, a Louisiana resident, claimed that Pritchard, a Virginia resident, owed him compensation under a 2017 offer letter for work done on behalf of Empire Petroleum Corporation. Savoie alleged that Pritchard fraudulently informed him that PGA had not received any payments for his projects, thus denying him due compensation.The district court dismissed the case against Pritchard for lack of personal jurisdiction, concluding that Pritchard's contacts with Louisiana were made in his corporate capacity and were protected by the fiduciary shield doctrine. The court found that Savoie failed to establish any exceptions to this doctrine that would allow Pritchard's corporate contacts to be attributed to him personally.The United States Court of Appeals for the Fifth Circuit reviewed the case and affirmed the district court's decision. The appellate court held that the fiduciary shield doctrine, which prevents the exercise of personal jurisdiction based solely on a defendant's corporate acts, applied in this case. The court noted that Louisiana law recognizes the fiduciary shield doctrine and that Savoie did not establish any exceptions, such as piercing the corporate veil or alleging a tort for which Pritchard could be personally liable. Consequently, the court concluded that Pritchard's corporate contacts could not be used to establish personal jurisdiction over him in Louisiana. View "Savoie v. Pritchard" on Justia Law

A landowner in Hardin County, Iowa, refused to allow a surveyor for a pipeline developer to enter his private property. The developer, Summit Carbon Solutions, LLC, sought access under Iowa Code section 479B.15, which governs hazardous liquid pipelines. The district court ordered the landowner to allow the surveyor temporary access, rejecting the landowner’s claims that the statute was unconstitutional under the “takings” clauses of the U.S. and Iowa Constitutions and that carbon dioxide in a supercritical state is not a “hazardous liquid.”The Iowa District Court for Hardin County ruled that the statute was facially constitutional and that Summit was a “pipeline company” with access rights under section 479B.15. The court found that Summit had provided proper statutory notice to the landowner and that the landowner’s claim of having a tenant who did not receive notice was not credible. The court granted Summit’s request for injunctive relief to compel access for surveying.The Iowa Supreme Court reviewed the case and affirmed the district court’s judgment. The court held that section 479B.15 is a lawful pre-existing limitation on the landowner’s title, consistent with longstanding background restrictions on property rights, and does not constitute a taking under the Federal or Iowa Constitutions. The court also held that supercritical carbon dioxide is a “hazardous liquid” within the meaning of section 479B.2, making Summit a pipeline company with access rights under the statute. The court found that Summit had complied with the statutory notice requirements and that no additional showing of irreparable harm was required for the injunction. The judgment and injunctive relief granted by the district court were affirmed. View "Summit Carbon Solutions, LLC v. Kasischke" on Justia Law

Appellee filed a complaint against Appellant alleging breach of written agreements for the lease of oil storage tanks. During the bench trial, the district court amended the complaint to include an oral guarantee to pay for the leases, which Appellant was not allowed to rebut. The court found Appellant breached the oral guarantee and awarded damages to Appellee.The District Court of Campbell County initially found in favor of Appellee, determining that Appellant breached the oral guarantee and awarded $114,537.56 in damages. Appellant raised multiple issues on appeal, including the admission of evidence, the application of the statute of frauds, and the effect of a settlement with a co-defendant.The Supreme Court of Wyoming reviewed the case and found that the district court did not abuse its discretion in admitting various exhibits into evidence. The court also held that the statute of frauds defense was waived as it was not raised at trial. Additionally, the court found that the settlement with the co-defendant did not preclude Appellee from pursuing claims against Appellant.However, the Supreme Court of Wyoming determined that the district court abused its discretion by not allowing Appellant to testify regarding the oral guarantee. The court affirmed the district court's rulings on the other issues but reversed and remanded the case for the limited purpose of allowing Appellant to testify about the oral guarantee. The remand is specifically for reconsideration of the personal guarantee and to provide both parties an opportunity to introduce evidence on that issue. View "Sorum v. Sikorski" on Justia Law

Gasoline consumers alleged that various oil producers colluded with the U.S. government, including then-President Trump, to negotiate with Russia and Saudi Arabia to cut oil production, limit future oil exploration, and end a price war on oil. Plaintiffs claimed this agreement fixed gas prices in violation of Sherman Act § 1, suppressed competition in violation of Sherman Act § 2, and involved anticompetitive mergers in violation of Clayton Act § 7.The United States District Court for the Northern District of California dismissed the case, finding it lacked subject-matter jurisdiction under the political question and act of state doctrines. The court also found that Plaintiffs failed to adequately plead an antitrust conspiracy. Additionally, the court dismissed Defendant Energy Transfer for lack of personal jurisdiction and denied Plaintiffs leave to amend their complaint, as well as requests for additional discovery and oral argument.The United States Court of Appeals for the Ninth Circuit affirmed the district court’s dismissal. The court held that the political question doctrine barred judicial review of the President’s foreign policy decisions, as these decisions are committed to the political branches of government. The court also found no judicially manageable standards to resolve the claims under antitrust laws. Additionally, the act of state doctrine barred the claims because they involved evaluating the petroleum policies of foreign nations. The court further held that Plaintiffs failed to state a plausible antitrust conspiracy claim regarding Defendants’ private conduct. Finally, the court found no abuse of discretion in the district court’s procedural rulings. View "D'Augusta v. American Petroleum Institute" on Justia Law

The plaintiffs, property owners in West Virginia, filed a lawsuit against the current and former owners of abandoned oil and gas wells on their properties. They sought damages for the defendants' failure to plug the wells, alleging common law nuisance, trespass, and negligence. The defendants argued that the West Virginia Department of Environmental Protection (WVDEP) was responsible for well plugging and that WVDEP had approved transactions between the defendants, which purportedly relaxed their statutory duty to plug the wells. They claimed WVDEP was an indispensable party under Federal Rule of Civil Procedure 19 and, because it could not be joined due to sovereign immunity, sought judgment in their favor under Rule 12(c).The United States District Court for the Northern District of West Virginia denied the defendants' motion, ruling that WVDEP was not a necessary and indispensable party under Rule 19. The court concluded that it could grant the plaintiffs damages on their common law claims without implicating the State’s interests. The defendants then filed an interlocutory appeal, arguing that the district court's order was reviewable under the collateral order doctrine, as it effectively denied WVDEP sovereign immunity.The United States Court of Appeals for the Fourth Circuit reviewed the case and determined that the district court's order did not rule on any immunity issue but only on whether WVDEP was a necessary and indispensable party under Rule 19. The appellate court found that the order did not satisfy the requirements of the collateral order doctrine and was not a final decision. Consequently, the court granted the plaintiffs' motion to dismiss the appeal for lack of jurisdiction. View "McEvoy v. Diversified Energy Company PLC" on Justia Law

The case involves Transcontinental Gas Pipe Line Company, LLC (Transco), a natural gas company that sought to abandon and expand its pipeline facilities in Pennsylvania and New Jersey. To do so, Transco needed a Certificate of Public Convenience and Necessity from the Federal Energy Regulatory Commission (FERC), which it obtained. However, the certificate was subject to conditions, including that Transco receive three additional permits from the Pennsylvania Department of Environmental Protection (PADEP). After receiving these permits, Transco began its pipeline project. However, three environmental advocates filed an administrative appeal with the Environmental Hearing Board (EHB) challenging PADEP's issuance of the permits. In response, Transco initiated a lawsuit in the District Court seeking to enjoin the administrative appeal, arguing that the Natural Gas Act preempts the state law allowing the appeal.The District Court rejected Transco's preemption arguments and denied its motion for a preliminary injunction. Transco appealed this decision to the United States Court of Appeals for the Third Circuit. The Court of Appeals affirmed the District Court's decision, finding that none of the theories of preemption advanced by Transco or the state agency applied in this case. The Court held that the Natural Gas Act does not expressly preempt administrative appeals to the EHB, nor does it field preempt such appeals. The Court also found that the possibility of multiple challenges in different fora to PADEP permitting decisions under the Clean Water Act for interstate natural gas pipelines does not impose an obstacle to the purposes of the Natural Gas Act. Therefore, the Court concluded that Transco's motion for a preliminary injunction was correctly denied. View "Transcontinental Gas Pipe Line Co LLC v. Pennsylvania Environmental Hearing Board" on Justia Law