Justia Energy, Oil & Gas Law Opinion Summaries

Exxon Mobil Corporation owned subsidiaries in Cuba that had various oil and gas assets. In 1960, the Cuban government expropriated these assets without compensating Exxon. In 1996, Congress enacted the Cuban Liberty and Democratic Solidarity Act, which allows U.S. nationals to sue those who traffic in property confiscated by the Cuban government. Exxon sued three state-owned defendants, alleging they trafficked in the confiscated property by participating in the oil industry and operating service stations.The United States District Court for the District of Columbia denied one defendant's motion to dismiss based on foreign sovereign immunity. The court held that the Cuban Liberty and Democratic Solidarity Act does not override the Foreign Sovereign Immunities Act (FSIA), and jurisdiction depends on an FSIA exception. The court found that the FSIA’s expropriation exception did not apply but that the commercial-activity exception did. The court allowed limited jurisdictional discovery for the other two defendants and later denied their motion for reconsideration.The United States Court of Appeals for the District of Columbia Circuit reviewed the case. The court agreed with the district court that the Cuban Liberty and Democratic Solidarity Act does not confer jurisdiction and that the FSIA’s expropriation exception is inapplicable. However, the court concluded that the district court needed to undertake additional analysis before determining that jurisdiction exists under the FSIA’s commercial-activity exception. The court vacated the district court’s decision and remanded the case for further analysis on the applicability of the FSIA’s commercial-activity exception. View "Exxon Mobil Corporation v. Corporacion CIMEX, S.A. (Cuba)" on Justia Law

The case involves SCS Carbon Transport LLC ("Summit") and a group of landowners. Summit plans to construct an interstate pipeline to transport carbon dioxide to sequestration sites in North Dakota and four other states. To determine the appropriate pipeline route, Summit needs to access the landowners' properties. However, the landowners denied Summit permission to enter their lands. Consequently, Summit filed lawsuits against the landowners, seeking a court order confirming its right under North Dakota law to enter the lands to conduct pre-condemnation surveys and examinations. The landowners counterclaimed, arguing that the statute authorizing entry is unconstitutional.The district courts granted summary judgment to Summit, concluding that the statute does not constitute an unconstitutional per se taking, Summit is a common carrier authorized to exercise eminent domain, and the proposed surveys and examinations are the type of minimally invasive surveys and examinations allowed under the statute. The courts confirmed Summit's right to enter the lands to complete civil, environmental, and archaeological/cultural surveys and examinations, including any necessary geotechnical/soil borings, archaeological/cultural resource surveys and examinations, and including any necessary core or water sampling activities subject to any conditions.The landowners appealed the judgments and order granting summary judgment, arguing that the statute is unconstitutional on its face and as applied to them under the Takings Clause of the Fifth Amendment and article I, § 16 of the North Dakota Constitution.The Supreme Court of North Dakota affirmed the lower courts' decisions. The court concluded that the landowners have not established a constitutional violation on the face of the entry statute or as applied to them, and the judgments and order do not exceed the scope of the entry statute. The court also found that the district court's judgment does not grant Summit an indefinite or perpetual right of access. The court held that a constitutionally permissible entry may not be longer or more invasive than necessary to complete the examination or survey needed to confirm and minimize the scope of the anticipated taking of private property. View "SCS Carbon Transport v. Malloy" on Justia Law

The case involves a dispute arising from the financial fallout of Winter Storm Uri, which severely impacted Texas's electrical grid in 2021. The Electric Reliability Council of Texas (ERCOT), responsible for managing the grid, took measures including manipulating energy prices to incentivize production. This resulted in Entrust Energy, Inc., receiving an electricity bill from ERCOT of nearly $300 million, leading to Entrust's insolvency and subsequent bankruptcy filing. ERCOT filed a claim seeking payment of the invoice, which was challenged by Anna Phillips, the trustee of the Entrust Liquidating Trust. The trustee argued that ERCOT's price manipulation violated Texas law, that ERCOT was grossly negligent in its handling of the grid during the storm, and that ERCOT's transitioning of Entrust’s customers to another utility was an uncompensated taking in violation of the Fifth Amendment.The bankruptcy court declined to abstain from the case and denied ERCOT’s motion to dismiss all claims except for the takings claim. ERCOT appealed to the United States Court of Appeals for the Fifth Circuit, arguing that the bankruptcy court should have abstained under the Burford doctrine, which allows federal courts to abstain from complex state law issues to avoid disrupting state policies.The Fifth Circuit found that the bankruptcy court erred in refusing to abstain under the Burford doctrine. The court reversed the bankruptcy court's denial of ERCOT’s motion to abstain and its denial of ERCOT’s motion to dismiss the trustee’s complaint. The court also vacated the bankruptcy court’s order dismissing the takings claim with prejudice. The court remanded the case with instructions to dismiss certain counts and stay others pending the resolution of related state proceedings. View "Electric Reliability Council of Texas v. Phillips" on Justia Law

Whitetail Wave LLC, a Montana Limited Liability Company, sued XTO Energy, Inc., a Delaware corporation, the Board of University and School Lands of the State of North Dakota, the State of North Dakota, and the Department of Water Resources and its Director. Whitetail Wave claimed ownership of certain property in McKenzie County, North Dakota, and alleged that XTO Energy had breached their lease agreement by failing to make required royalty payments. Whitetail Wave also claimed that the State's assertion of an interest in the mineral interests associated with the property constituted an unconstitutional taking without just compensation.The District Court of McKenzie County granted summary judgment in favor of the State and XTO Energy. The court concluded that the State owned certain mineral interests within the ordinary high watermark as defined by North Dakota law. The court also found that XTO Energy was within the safe harbor provision provided by North Dakota law and did not breach the parties’ lease agreement when it withheld the royalty payments. The court awarded XTO Energy recovery of its attorney’s fees.On appeal, the Supreme Court of North Dakota affirmed the judgment of the district court. The Supreme Court found that the district court did not err in dismissing Whitetail Wave's claim of an unconstitutional taking against the State, as the State's actions were limited to a title dispute. The Supreme Court also found that the district court did not err in dismissing Whitetail Wave's claim against XTO Energy for the non-payment of royalties, as XTO Energy fell within the safe harbor provision of North Dakota law. Finally, the Supreme Court found that the district court did not err in awarding XTO Energy a recovery of its attorney’s fees as the prevailing party. View "Whitetail Wave v. XTO Energy" on Justia Law

The plaintiff, Great Northern Properties, L.P. ("GNP"), filed a lawsuit against the United States, alleging a Fifth Amendment taking of its coal leases on the Otter Creek property in Montana. GNP claimed that the federal government, through the Montana state regulatory authority, denied the necessary permits for coal mining. The United States Court of Appeals for the Federal Circuit affirmed the decision of the Court of Federal Claims, which dismissed the case for lack of subject matter jurisdiction. The court held that GNP could not establish that Montana's actions were coerced by the federal government or that Montana acted as an agent of the federal government. The court also noted that the federal government did not dictate the outcome in individual permitting cases and that state law governed the permitting process. Therefore, the federal government was not responsible for the permit denial, as Montana was not coerced to enact its own regulatory program following the passage of the Surface Mining Control and Reclamation Act. Furthermore, the court rejected GNP's claim that the existence of federal standards created an agency relationship between the federal government and Montana. View "GREAT NORTHERN PROPERTIES, L.P. v. US " on Justia Law

In the case before the United States Court of Appeals for the Fourth Circuit, plaintiffs Scott Sonda and Brian Corwin, both mineral rights owners in West Virginia, challenged Senate Bill 694, which amended the State's oil and gas conservation law to permit the unitization of interests in horizontal well drilling units, even for nonconsenting mineral rights owners. The plaintiffs claimed that this law constituted a taking of their property and deprived them of property without due process, in violation of the Fifth and Fourteenth Amendments of the U.S. Constitution. The West Virginia Oil and Gas Conservation Commission filed a motion to dismiss, asserting that the plaintiffs lacked standing, that the Commission was immune under the Eleventh Amendment, and that the complaint failed to state a claim upon which relief could be granted.However, the district court abstained from ruling on the federal constitutional claims, citing the Pullman abstention doctrine, and ordered the proceeding stayed pending the outcome of a state court action that the plaintiffs may file. The Commission appealed the district court's abstention order.The Fourth Circuit Court of Appeals reversed the district court's order and remanded for further proceedings, noting that the district court had erred by applying the Pullman abstention doctrine without first ensuring it had jurisdiction. The court directed the district court to first address the Commission's argument challenging the plaintiffs' Article III standing. The court did not express an opinion about the merits of the standing issue or any others before the district court. View "Sonda v. West Virginia Oil & Gas Conservation Commission" on Justia Law

EEE Minerals, LLC, and a Trustee for The Vohs Family Revocable Living Trust, sued the State of North Dakota, the Board of University and School Lands, and the Board’s commissioner in a dispute over mineral interests in McKenzie County, North Dakota. Plaintiffs alleged that state law related to mineral ownership was preempted by federal law and that the defendants had engaged in an unconstitutional taking of the plaintiffs’ mineral interests. Plaintiffs sought damages, an injunction, and declaratory relief. The district court dismissed the action.   The Eighth Circuit affirmed. Plaintiffs contend that the Flood Control Act impliedly preempts the North Dakota statute because the state law “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” The court explained that it is not convinced that the State’s determination of a high-water mark, and the attendant settling of property rights under state law, stands as an obstacle to accomplishing the objectives of the Flood Control Act. The court wrote that the interests of the United States and the goals of the Flood Control Act are unaffected by a dispute between the State and a private party over mineral rights that were not acquired by the federal government.   Further, the court explained that Plaintiffs have not established that the United States will be prevented from flooding or inundating any land covered by the 1957 deed in which the State claims ownership of mineral interests under state law. The Flood Control Act would not dictate that property rights be assigned to Plaintiffs. View "EEE Minerals, LLC v. State of North Dakota" on Justia Law

The Supreme Court quashed the order of the district court granting the motion to dismiss filed by the State of Rhode Island, acting by and through the Division of Taxation (Division), in this appeal stemming from a series of transactions for the purchase and sale of gasoline, holding that the district court erred in granting the Division's motion to dismiss based on Plaintiff's failure to exhaust its administrative remedies.The tax at issue was levied on a transaction between Plaintiff and another party and was the subject of several transactions between various entities. Plaintiff reimbursed a third-party for the tax assessed on the sale of 300,000 barrels of gasoline and then initiated this action alleging constitutional violations and violations of the Motor Fuel Tax. The trial judge dismissed the case for Plaintiff's failure to exhaust administrative remedies. The Supreme Court reversed, holding that the trial judge erroneously dismissed the action based on Plaintiff's failure to exhaust its administrative remedies. View "Gunvor USA, LLC v. State, ex rel. Division of Taxation" on Justia Law

The Supreme Court quashed the order of the district court dismissing two actions challenging the State Division of Taxation's denial of Plaintiff's claim for a refund of $4,280,039 paid for Motor Fuel Tax assessed on the purchase and sale of 300,000 barrels of gasoline, holding that the the district court erred.Plaintiff purchased 300,000 barrels of gasoline from Defendant. The Division imposed a motor fuel taxes on the gasoline that was charged to Defendant, as the seller of the gas. Defendant sought reimbursement from Plaintiff, which sought a refund from the Division under R.I. Gen. Stat. 31-36-13. The Division denied Plaintiff's claim for a refund on the grounds that Plaintiff did not have a right to pursue a refund. Plaintiff then filed a complaint alleging constitutional violations and violations of the Motor Fuel Tax, among other claims. Plaintiff then appealed the Division's denial of its request for a refund. The hearing officer concluded that Plaintiff's claim was barred by both res judicata and administrative finality. Ultimately, both cases were dismissed. The Supreme Court quashed the decisions below, holding (1) Plaintiff had standing; (2) the trial judge erred in concluding that res judicata barred Plaintiff's appeal; and (3) the doctrine of administrative finality did not apply to bar Plaintiff's claims. View "Apex Oil Co. v. State, ex rel. Division of Taxation" on Justia Law

This case was one of many lawsuits concerning Act 13 of 2012, which amended Pennsylvania’s Oil and Gas Act. Act 13 included the grant of authority by the General Assembly to the Agencies to promulgate regulations for unconventional gas wells. In October 2016, the Marcellus Shale Coalition (the “MSC”) filed a Petition seeking declaratory and injunctive relief, raising seven counts, only one of which was at issue in this appeal. That count pertained to portions of the regulations set forth at Sections 78a.1 and 78a.15. Each challenged regulatory provision interacted to some degree with Section 3215 of the Oil and Gas Act of 2012, titled “Well location restrictions.” In this appeal as of right, the Pennsylvania Supreme Court was asked to pass upon the breadth of the legislative rulemaking authority given to the Department of Environmental Protection (the “Department”) and the Environmental Quality Board (the “Board”) (collectively, the “Agencies”) by the General Assembly in the Pennsylvania Oil and Gas Act of 1984. The Agencies contended the Commonwealth Court erroneously concluded that they exceeded their authority and consequently struck down certain regulations designed to aid the Agencies in information gathering attendant to the issuance of permits for new unconventional gas wells. The Supreme Court found the General Assembly intended to give the Agencies the leeway to promulgate the challenged regulations and that those regulations were reasonable. The Court therefore reversed the Commonwealth Court. View "Marcellus Shale Coalition v. Dept. of Environmental Protection, et al." on Justia Law