Justia Energy, Oil & Gas Law Opinion Summaries

The Pennsylvania Environmental Defense Foundation (“PEDF”) challenged for the third time, the use of proceeds from oil and gas leasing on the Commonwealth’s forest and park lands as violative of Article I, Section 27 of the Pennsylvania Constitution, also known as the Environmental Rights Amendment. (“Section 27” or “ERA”). In previous trips before the Pennsylvania Supreme Court, PEDF challenged several 2009-2025 budgetary provisions enacted challenging the use of proceeds from oil and gas leasing on the Commonwealth’s forest and park lands as violative of Article I, Section 27 of the Pennsylvania Constitution, also known as the Environmental Rights Amendment. (“Section 27” or “ERA”). In the first two cases, PEDF challenged several 2009-2015 budgetary provisions enacted in the wake of dramatic increases in oil and gas revenue resulting from Marcellus Shale exploration in Pennsylvania. Applying trust principles, the Pennsylvania Supreme Court held that the budgetary provisions violated Section 27 by utilizing the oil and gas revenue for non-trust purposes via transfers to the General Fund. PEDF v. Commonwealth, 161 A.3d 911 (Pa. 2017) (“PEDF II”); PEDF v. Commonwealth, 255 A.3d 289 (Pa. 2021) (“PEDF V”). The underlying case here was one for a declaratory judgment, and named the Commonwealth and Governor as parties. Here, PEDF raised numerous constitutional challenges to provisions of the General Appropriations Act of 2017 and 2018, as well as the 2017 Fiscal Code amendments, all of which were enacted after the Supreme Court’s decision in PEDF II. After review , the Supreme Court affirmed the Commonwealth Court, whilst rejecting that court;s analysis derived from PEDF III. View "PA Enviro Defense Fdn, Aplt. v. Commonwealth" on Justia Law

Defendants, ERR, LLC; Evergreen Resource Recovery, LLC (collectively “ERR”), owns and operates a wastewater treatment facility. One of ERR’s spill contractors, Oil Mop, performed oil removal and soil remediation. Oil Mop submitted a claim to the National Pollution Funds Center (“NPFC”) for reimbursement of removal costs after ERR refused to pay. The NPFC reimbursed Oil Mop and billed ERR for what it paid Oil Mop.   ERR refused to pay and the Government then sued ERR for what it paid Oil Mop. The Government moved to strike ERR’s demand for a jury trial.  The district court held a bench trial after concluding that the Government’s Oil Pollution Act (“OPA”) claims sound not in law but in equity.   On appeal, the Fifth Circuit addressed ERR’s Seventh Amendment challenge and held that the Seventh Amendment guarantees ERR’s right to a jury trial of the Government’s OPA claims. The court explained that it must consider two factors when determining whether a right of action requires a jury trial. First, the court compared the statutory action to 18th-century actions brought in the courts of England prior to the merger of the courts of law and equity. Second, the court examined the remedy sought and determined whether it is legal or equitable in nature.   Here, the court concluded that the Recoupment Claim sounds in law and hence triggers ERR’s Seventh Amendment right to a jury. Next, the court held that both the nature of the Government’s action and the type of remedy sound in law. View "USA v. E.R.R." on Justia Law

The district court dismissed a suit alleging that a price plan adopted by Salt River Project Agricultural Improvement and Power District (SRP) unlawfully discriminated against customers with solar-energy systems and was designed to stifle competition in the electricity market.The Ninth Circuit affirmed in part, applying Arizona’s notice-of-claim statute, which provides that persons who have claims against a public entity, such as SRP, must file with the entity a claim containing a specific amount for which the claim can be settled.The district court erred in dismissing plaintiffs’ equal protection claim as barred by Arizona’s two-year statute of limitations. The claim did not accrue when SRP approved the price plan, but rather when plaintiffs received a bill under the new rate structure. The plaintiffs alleged a series of violations, each of which gave rise to a new claim and began a new limitations period.Monopolization and attempted monopolization claims under the Sherman Act were not barred by the filed-rate doctrine, which bars individuals from asserting civil antitrust challenges to an entity’s agency-approved rates. SRP was not entitled to state-action immunity because Arizona had not articulated a policy to displace competition.The Local Government Antitrust Act shielded SRP from federal antitrust damages because SRP is a special functioning governmental unit but the Act does not bar declaratory or injunctive relief. The district court erred in concluding that plaintiffs failed to adequately allege antitrust injury based on the court’s finding that the price plan actually encouraged competition in alternative energy investment. View "Ellis v. Salt River Project Agricultural Improvement and Power District" on Justia Law

The Supreme Court affirmed the judgment of the court of appeal concluding that a municipality does not violate Ohio Const. art. XVIII, 6 by selling a surplus of electricity to customers outside the municipality's boundaries, holding that the court of appeals did not err.The City of Cleveland sold outside its boundaries approximately four percent of the electricity it sold inside its boundaries. Cleveland Electric Illuminating Company (CEI) brought this complaint arguing that the electricity the City sold extraterritorially as surplus violated this Court's decision in Toledo Edison Co. v. Bryan, 737 N.E.2d 529 (2000) and the Ohio Constitution. The trial court granted summary judgment for the City. The court of appeals reversed, determining (1) Article XVIII, Section 6 does not require a municipality to buy the precise amount of electricity required by its inhabitants at any given time, and (2) questions of material fact existed as to whether the City obtained surplus electricity for the sole purpose of selling it to a neighboring city. The Supreme Court affirmed, holding that while a municipality may not acquire excess capacity for the sole purpose of reselling it outside the municipality's territorial boundaries, the municipality is not required to purchase the exact amount of electricity necessary to satisfy the current needs of its territorial customers. View "Cleveland Electric Illuminating Co. v. Cleveland" on Justia Law

In consolidated appeals, the issue presented for the Pennsylvania Supreme Court's review centered on the Commonwealth Court’s holding that, to be held liable for damages under Pennsylvania’s inverse condemnation statute, an entity had to be "clothed with the power of eminent domain" to the property at issue. In 2009, Appellee, UGI Storage Company filed an application with the Federal Energy Regulatory Commission (the “Commission” or “FERC”), seeking a certificate of public convenience and necessity to enable it to acquire and operate certain natural gas facilities. Appellee wished to acquire and operate underground natural gas storage facilities, which the company referred to as the Meeker storage field. Appellee also sought to include within the certificated facilities a 2,980-acre proposed "buffer zone." FERC ultimately granted the application for Appellee to acquire and assume the operation of the Meeker storage field, but denied Appellee’s request to certificate the buffer zone. Appellants petitioned for the appointment of a board of viewers to assess damages for an alleged de facto condemnation of their property, alleging that though their properties had been excluded by FERC from the certificated buffer zone, they interpreted Appellee’s response to the Commission’s order as signaling its intention to apply for additional certifications to obtain property rights relative to the entire buffer zone. The common pleas court initially found that a de facto taking had occurred and appointed a board of viewers to assess damages. Appellee lodged preliminary objections asserting Appellants’ petition was insufficient to support a de facto taking claim. The Supreme Court reversed the Commonwealth Court: "we do not presently discern a constitutional requirement that a quasi-public entity alleged to have invoked governmental power to deprive landowners of the use and enjoyment of their property for a public purpose must be invested with a power of eminent domain in order to be held to account for a de facto condemnation. ... a public or quasi-public entity need not possess a property-specific power of eminent domain in order to implicate inverse condemnation principles." The case was remanded for the Commonwealth Court to address Appellants’ challenge to the common pleas court’s alternative disposition (based upon the landowners’ purported off-the-record waiver of any entitlement to an evidentiary hearing), which had been obviated by the intermediate court’s initial remand decision and that court’s ensuing affirmance of the re-dismissal of Appellants’ petitions. View "Albrecht, et al. v. UGI Storage Co. et al." on Justia Law

Ordinances banning “land uses in support of” new oil and gas wells and “land uses in support of” wastewater injection in unincorporated areas of Monterey County were enacted as part of Measure Z, an initiative sponsored by PMC and passed by Monterey County voters.The trial court upheld, in part, a challenge to Measure Z by oil companies and other mineral rights holders. The court of appeal affirmed. Components of Measure Z are preempted by state laws. Public Resources Code section 3106 explicitly provides that the State of California’s oil and gas supervisor has the authority to decide whether to permit an oil and gas drilling operation to drill a new well or to utilize wastewater injection in its operations. Those operational aspects of oil drilling operations are committed by section 3106 to the state’s discretion and local regulation of these aspects would conflict with section 3106. View "Chevron U.S.A., Inc. v. County of Monterey" on Justia Law

The issue this case presented for the Alaska Supreme Court's review centered on a challenge to the lieutenant governor’s decision that the sponsors of an initiative, “An Act changing the oil and gas production tax for certain fields, units, and nonunitized reservoirs on the North Slope,” had collected enough signatures to allow the initiative to appear on the ballot in the 2020 general election. Entities opposed to the initiative argued that signatures should not have been counted because the signature gatherers (the circulators) falsely certified that their compensation complied with Alaska election law. The statute governing circulator compensation allows them to be paid no more than “$1 a signature.” The superior court decided that this statute was unconstitutional because it imposed an unreasonable burden on core political speech — “interactive communication concerning political change.” It therefore concluded that the lieutenant governor properly counted the challenged signatures and properly certified the initiative petition for the ballot. The entities opposed to the initiative filed this appeal. The Supreme Court heard oral argument in August 2020, and on August 31 issued a summary order affirming the superior court’s judgment. This opinion explained the Court's decision. View "In re Resource Development Council for Alaska, Inc., et al." on Justia Law

Under the Natural Gas Act, to build an interstate pipeline, a natural gas company must obtain from the Federal Energy Regulatory Commission (FERC) a certificate of "public convenience and necessity,” 15 U.S.C. 717f(e). A 1947 amendment, section 717f(h), authorized certificate holders to exercise the federal eminent domain power. FERC granted PennEast a certificate of public convenience and necessity for a 116-mile pipeline from Pennsylvania to New Jersey. Challenges to that authorization remain pending. PennEast sought to exercise the federal eminent domain power to obtain rights-of-way along the pipeline route, including land in which New Jersey asserts a property interest. New Jersey asserted sovereign immunity. The Third Circuit concluded that PennEast was not authorized to condemn New Jersey’s property.The Supreme Court reversed, first holding that New Jersey’s appeal is not a collateral attack on the FERC order. Section 717f(h) authorizes FERC certificate holders to condemn all necessary rights-of-way, whether owned by private parties or states, and is consistent with established federal government practice for the construction of infrastructure, whether by government or through a private company.States may be sued only in limited circumstances: where the state expressly consents; where Congress clearly abrogates the state’s immunity under the Fourteenth Amendment; or if it has implicitly agreed to suit in “the structure of the original Constitution.” The states implicitly consented to private condemnation suits when they ratified the Constitution, including the eminent domain power, which is inextricably intertwined with condemnation authority. Separating the two would diminish the federal eminent domain power, which the states may not do. View "PennEast Pipeline Co. v. New Jersey" on Justia Law

The issue presented for the Louisiana Supreme Court’s review in this case centered on whether an award of attorney fees and other litigation costs to defendant landowners in an expropriation proceeding could be upheld under current law. The underlying matter arose from the construction of the Bayou Bridge Pipeline. As part of the project, Bayou Bridge Pipeline, LLC (“BBP”), sought to acquire servitudes on the property of various landowners. The specific piece of property at the center of this litigation is approximately 38 acres of land (“the property”). Prior to reaching servitude agreements with all individuals with an ownership interest in this particular parcel of land, BBP began pipeline construction. Peter Aaslestad, one of the property owners, filed suit against BBP in order to enjoin BBP from further construction. BBP later stipulated that it would remain off the property as of September 10, 2018. However, the pipeline construction was more than 90% complete at that time. Meanwhile, in late July 2018, after it had begun construction on the property, BBP filed expropriation litigation against hundreds of property owners with whom servitude agreements could not be reached, including Mr. Aaslestad, Katherine Aaslestad, and Theda Larson Wright (collectively referred to as “defendants”). In response, defendants filed a reconventional demand against BBP, alleging BPP trespassed on their property and violated due process by proceeding with construction of the pipeline prior to a judgment of expropriation. The matter proceeded to a trial wherein the trial court granted BBP’s petition for expropriation, finding the expropriation served a public and necessary purpose. The trial court also granted defendants’ reconventional demand, finding that BBP trespassed on defendants’ property prior to obtaining permission or legal authority. The trial court ultimately awarded each defendant $75.00 for the expropriation and another $75.00 in trespass damages. The court of appeal reversed in part: upholding the constitutionality of the expropriation process, but finding that BBP violated defendants’ due process rights and awarded $10,000.00 to each defendant for trespass, and granted attorney fees. The Supreme Court determined the award of fees was constitutional, and upheld the Court of Appeal. View "Bayou Bridge Pipeline, LLC v. 38.00 Acres, More or Less, Located in St. Martin Parish et al." on Justia Law

The Pennsylvania Supreme Court granted the Pennsylvania Department of Transportation (“PennDOT”)’s petition seeking review of a Commonwealth Court holding that a de facto taking of an unmined coal estate, owned by Penn Pocahontas and leased to PBS Coals, Inc. (collectively “the Coal Companies”), occurred under the Eminent Domain Code, 26 Pa.C.S. sections 101-1106 (“Code”), when PennDOT’s construction of Highway 219 on an adjoining parcel destroyed options for constructing rights-of-ways to the coal estate’s surface. In reaching that conclusion, the Commonwealth Court held that the feasibility of mining the coal, as measured by the probability of obtaining a legally required permit from the Department of Environmental Protection (“DEP”), was relevant only to damages. The Supreme Court reversed the Commonwealth Court’s decision, agreeing with PennDOT that the legality of extracting the coal went directly to the trial court’s duty to determine whether a taking occurred. Furthermore, the Court held the Commonwealth Court erred by failing to remand the case for consideration of whether consequential damages are available to the Coal Companies. The matter was remanded to the Commonwealth Court with instructions to remand to the trial court with respect to the Coal Companies’ consequential damages claim. View "PBS Coals, et al v. PennDOT" on Justia Law