Justia Energy, Oil & Gas Law Opinion Summaries

Petitioner power companies sought a writ of prohibition in connection with a ruling of the circuit court denying petitioners' motion to dismiss a breach of contract complaint filed against them by respondents, Shell Equipment and Shell Energy, as being barred by the statute of limitations. Petitioners argued that the trial court erred in ruling that the limitations period applicable to contracts for the sale of goods under the UCC does not apply to the coal sales agreement they entered into with Shell Equipment. The Supreme Court granted the writ of prohibition, finding that petitioners demonstrated clear legal error for which they were entitled to relief. The Court determined that the subject agreement constituted a sale of goods under W.V. Code 46-2-107(1), and, as a result, the four-year statute of limitations established by the UCC for the sales of goods was controlling. Because respondents did not initiate the lawsuit until after the limitations period had expired, the trial court committed error in failing to grant petitioners' motion to dismiss.

Franchisees, operating gas stations in Puerto Rico, alleged violations of the Petroleum Marketing Practices Act (PMPA), 15 U.S.C. 2801, based on the Esso's plan to leave the market and terminate their contracts. Esso sold its assets to Total and most of the franchisees eventually contracted with Total. The district court found some of the terms of the Total franchise contract invalid, but severable, and denied injunctive relief and damages against Esso. The First Circuit affirmed, first holding that PMPA does not require that terms offered by a substitute franchisor be identical for each franchisee and that there was no evidence that Total acted other than in good faith or intended that its offers would be rejected. That Total's franchise contract, consisting of more than 100 pages, contained five provisions found partially invalid under state law, did not render it "per se" in violation of PMPA.