Justia Energy, Oil & Gas Law Opinion Summaries

WPX Energy, a non-Indian oil and gas company, obtained rights-of-way from the Bureau of Indian Affairs to access land owned by members of the Three Affiliated Tribes on the Fort Berthold Reservation. The Fettigs, tribal members and landowners, consented to the grants and also entered into side letter agreements with WPX Energy, imposing conditions such as prohibiting smoking and hunting, and specifying fines for violations. In 2020, the Fettigs filed suit in the Three Affiliated Tribes District Court, alleging WPX Energy violated the no-smoking provision. WPX Energy argued that the tribal court lacked jurisdiction, as it is a non-Indian entity, but the tribal district court, through Judge Jones, found it had jurisdiction under the Montana consensual relationship exception. The Fettigs also pursued an administrative claim with the Bureau, which was denied on the basis that the side letter agreements were not incorporated into the grants.WPX Energy sought a preliminary injunction in the United States District Court for the District of North Dakota, claiming the tribal court lacked jurisdiction. The district court granted the injunction, but the United States Court of Appeals for the Eighth Circuit previously vacated it, requiring exhaustion of tribal remedies. After the Three Affiliated Tribes Supreme Court affirmed tribal jurisdiction, WPX Energy again sought relief in federal court, which again granted a preliminary injunction. Judge Jones appealed this second grant.On review, the United States Court of Appeals for the Eighth Circuit held that the tribal court had jurisdiction under the first Montana exception because the dispute arose from a commercial relationship created by the side letter agreements, which were independently negotiated and not governed by federal law. The court also found that normal litigation costs did not constitute irreparable harm. The Eighth Circuit vacated the preliminary injunction and remanded for further proceedings. View "WPX Energy Williston, LLC v. Jones" on Justia Law

This case concerns a dispute between two sophisticated energy companies over a merger agreement. In December 2017, Trireme entered into an agreement with Innogy Renewables US, LLC, a subsidiary of a German energy company, to transfer valuable development companies related to wind and solar projects in exchange for an upfront payment and the possibility of future milestone payments. The agreement included provisions restricting Innogy from transferring these assets without Trireme’s consent. After a complex asset swap and corporate restructuring involving Innogy’s parent company and other entities, Trireme alleged that the assets were transferred within the corporate family in violation of the agreement.Previously, Trireme filed a lawsuit—referred to as Trireme I—in the United States District Court for the Southern District of New York, alleging breaches of other sections of the merger agreement but not the section concerning asset transfers. Later, Trireme sought to amend its complaint to add this new breach-of-contract claim. The district court denied the motion to amend, finding that Trireme had not acted diligently to discover the claim and was on notice of the potential breach before filing the initial action. Trireme did not pursue an appeal of this denial but instead filed a new lawsuit asserting the same claim. The district court dismissed the new case on grounds of res judicata.The United States Court of Appeals for the Second Circuit reviewed the case and affirmed the district court’s dismissal. The court held that when a party seeks to assert a claim in a new action after unsuccessfully moving to amend its complaint in a prior action, courts should consider several factors, including whether the denial was on the merits, whether the plaintiff failed to appeal, the timing of the claim, the plaintiff’s diligence, and whether the plaintiff was represented by counsel. Applying these factors, the Second Circuit concluded that res judicata barred Trireme’s new claim and affirmed the judgment. View "Trireme Energy Development v. RWE Renewables" on Justia Law

A company operating a gas station in Washington entered into a series of agreements with a petroleum refiner and a logistics company. The agreements allowed the company to rebrand its station and market motor fuel under the refiner’s trademarks, even though the refiner did not supply the actual fuel. Instead, the logistics company served as an intermediary, and fuel was sourced from a third party. Later, the refiner and logistics company claimed the agreements were terminated, demanding the removal of the trademarks. The gas station operator refused, alleging that the termination violated the Petroleum Marketing Practices Act (PMPA), which regulates the termination and nonrenewal of petroleum marketing franchises.The United States District Court for the Western District of Washington dismissed the gas station operator’s PMPA claim. The court held that no PMPA franchise existed because the refiner did not supply the fuel to either the operator or the logistics company. The court reasoned that the statute required the refiner to be the supplier of the fuel for a franchise relationship to exist under the PMPA.The United States Court of Appeals for the Ninth Circuit reviewed the dismissal de novo. It held that the PMPA does not require the refiner to supply the actual fuel; rather, a franchise exists if there is a contract authorizing the use of the refiner’s trademark in connection with the sale of motor fuel. The court determined that the operator plausibly alleged franchise relationships with both the refiner and the logistics company, based on the mutual obligations in the agreements and the statutory definitions. The Ninth Circuit reversed the district court’s dismissal of the PMPA claims and remanded the case for further proceedings. View "CAN-AM FUEL DISTRIBUTION, LLC V. SINCLAIR OIL, LLC" on Justia Law

An energy company, seeking to address disposal challenges associated with wastewater from its hydraulic fracturing operations, engaged a water technology firm to design and construct a specialized treatment facility. The two sides entered into a series of agreements, culminating in a comprehensive contract for the facility’s construction. Before this final contract was executed, the water technology firm discovered that its design would not meet the energy consumption requirements critical to the energy company, but did not disclose this information. The firm also failed to reveal risks associated with a proposed design change that could affect the quality of the facility’s waste byproduct. Relying on the firm’s representations, the energy company signed the contract and later approved the design change. When the facility failed to meet contractual specifications—producing unusable waste and exceeding power limits—the energy company terminated the contract and sued for breach and fraud.The case was tried in the Denver District Court, which found that the water technology firm had fraudulently induced the energy company into signing the contract by concealing and failing to disclose material facts. The trial court held that the economic loss rule did not bar the fraud claim because the misconduct occurred prior to contract formation. The court awarded the energy company substantial damages and attorney fees. On appeal, the Colorado Court of Appeals affirmed, though it reasoned that the contracts were interrelated but found an independent tort duty still existed.The Supreme Court of Colorado reviewed whether the economic loss rule barred the fraud claim. The Court held that the interrelated contracts doctrine does not apply when each contract is a stand-alone transaction and that the fraudulent conduct occurred before the governing contract was executed, inducing its formation. Therefore, the economic loss rule does not bar the fraud claim. The judgment was affirmed, and the case was remanded for a determination of reasonable attorney fees. View "Veolia Water Techs. v. Antero Treatment LLC" on Justia Law

Several individuals who own royalty interests in the Kansas Hugoton Gas Field brought a putative class action against two energy companies. Their claims are based on an alleged breach of a 2008 class action settlement agreement, which had resolved earlier disputes about underpayment of royalties by one of the companies. The 2008 settlement required limits on certain deductions from royalty payments and specified that its terms would bind successors, assigns, and related entities. In 2014, one defendant acquired assets from the other and continued making royalty payments. Plaintiffs allege the acquiring company violated the settlement by taking improper deductions after the acquisition.The plaintiffs initially sought to enforce the settlement in Kansas state court, but the District Court of Stevens County determined the judgment had become dormant and unenforceable. Plaintiffs appealed that ruling, and while the appeal was pending, they filed this federal class action complaint in the United States District Court for the District of Kansas. The district court denied defendants’ motions to dismiss but later denied class certification. The district court found that the proposed class was not ascertainable because identifying class members would require individualized title review and that other Rule 23 requirements were not satisfied.The United States Court of Appeals for the Tenth Circuit reviewed the district court’s decision. The appellate court clarified that, under its recent precedent, class ascertainability does not require administrative feasibility—only an objectively and clearly defined class. The court found the proposed class ascertainable, that common questions predominated, and that the plaintiffs satisfied all Rule 23 requirements. The Tenth Circuit reversed the district court’s denial of class certification and remanded with instructions to certify the putative class. View "Rider v. Oxy USA" on Justia Law

Minority shareholders of an Argentine oil and gas company, previously privatized in 1993, became involved in litigation after the Argentine government expropriated a majority stake in the company in 2012. The government’s acquisition of shares was conducted without making a public tender offer to minority shareholders, a process that was explicitly required by the company’s bylaws to protect such shareholders in the event of a takeover. The plaintiffs, consisting of Spanish entities and a New York hedge fund, had acquired significant stakes in the company, and after the expropriation, they claimed that they suffered substantial financial losses due to the government’s failure to comply with the tender offer requirement.The plaintiffs sued in the United States District Court for the Southern District of New York, asserting breach of contract and promissory estoppel claims under Argentine law against both the Argentine Republic and the company. After extensive litigation, the district court found in favor of the plaintiffs on their breach of contract claims against the Argentine Republic, awarding over $16 billion in damages, but granted summary judgment to the company, finding it had no obligation to enforce the tender offer provision. The court also dismissed the promissory estoppel claims.On appeal, the United States Court of Appeals for the Second Circuit held that the plaintiffs' breach of contract damages claims against the Argentine Republic and the company were not cognizable under Argentine law, reasoning that the bylaws did not create enforceable bilateral obligations between shareholders and that Argentine public law governing expropriation precluded such claims. The court affirmed the dismissal of the promissory estoppel claims and judgment in favor of the company, but reversed the judgment against the Argentine Republic, remanding for further proceedings consistent with its opinion. View "Petersen Energía v. Argentine Republic" on Justia Law

A renewable energy developer was awarded a standard-offer contract in 2014 to build a solar facility in Bennington, Vermont, with a requirement to commission the project by 2016. The developer repeatedly sought and received extensions to this deadline, while simultaneously pursuing a certificate of public good (CPG), which is also required for construction. The Public Utility Commission (PUC) granted the CPG in 2018, but it was appealed, reversed, and ultimately denied on remand due to violations of local land conservation measures and adverse impacts on aesthetics. The Vermont Supreme Court affirmed the final CPG denial in 2023.While litigation over the CPG was ongoing, the developer continued to seek extensions of its standard-offer contract’s commissioning milestone. The fifth extension request, filed in 2021, asked for a deadline twelve months after the Supreme Court’s mandate in the CPG appeal. The hearing officer recommended granting it, but the PUC did not act on the request until 2024, by which time the developer’s CPG had been finally denied. The PUC dismissed the fifth extension request as moot, finding the contract had expired by its own terms. The PUC also denied the developer’s motion for reconsideration and a sixth extension request, on the same grounds.On appeal, the Vermont Supreme Court reviewed the PUC’s actions with deference, upholding its factual findings unless clearly erroneous and its discretionary decisions unless there was an abuse of discretion. The Court held that the PUC properly concluded the requested extension was moot, the contract was null and void by its terms, and there was no abuse of discretion. The Court also rejected arguments that the PUC’s actions were inconsistent with other cases or violated constitutional rights. The orders of the PUC were affirmed. View "In re Petition of Apple Hill Solar LLC" on Justia Law

Fieldwood Energy operated an offshore platform near Louisiana and contracted with United Fire and Safety to provide fire watch services for repairs. Fieldwood also separately chartered a liftboat from Aries Marine to support the work, which included housing and crane services for the contractors. During the project, the liftboat listed and capsized, leading to personal injuries for a United Fire employee. Aries Marine, facing liability claims, sought indemnification from United Fire based on a cross-indemnification clause in the 2013 Master Services Contract (MSC) between Fieldwood and United Fire.The United States District Court for the Eastern District of Louisiana considered cross-motions for summary judgment on whether the MSC was a maritime contract. The district court found that the contract was not maritime in nature, applying Louisiana law via the Outer Continental Shelf Lands Act (OCSLA), which incorporates the law of the adjacent state unless federal maritime law applies. Louisiana’s Oilfield Anti-Indemnity Act invalidated the indemnity provisions. Aries’s motions for reconsideration were denied, leading to this appeal.The United States Court of Appeals for the Fifth Circuit reviewed the district court’s grant of summary judgment de novo. The appellate court agreed that the MSC did not require or contemplate that a vessel would play a substantial role in the contracted fire watch services. It found that only Fieldwood, not United Fire, expected the liftboat’s substantial involvement, and that such a shared expectation was necessary under circuit precedent to create a maritime contract. Because the parties did not share this expectation, the contract was not maritime, and Louisiana law voided the indemnity provisions. The Fifth Circuit affirmed the district court’s judgment. View "Aries Marine v. United Fire & Safety" on Justia Law

Two companies, Gulf Coast Investments, LLC and Trigger Energy Holdings, LLC, sold their membership interests in Blueprint Energy Partners, LLC to TCU Holdings, LLC. Blueprint, formed in 2017 for shale oil operations in Wyoming, originally had three equal members: Gulf Coast, Trigger, and TCU, with Aladdin Capital, Inc. as the manager and primary creditor. After financial struggles and interpersonal conflicts, the parties negotiated the buyout in 2019. TCU’s principal, Kent Stevens, threatened to leave and take staff and clients unless Gulf Coast and Trigger agreed to a set price, known as the “dynamite option.” Despite these threats, the plaintiffs were represented by counsel who advised them of alternatives, and negotiations spanned several months, culminating in a signed purchase agreement.The Circuit Court of the Second Judicial Circuit, Minnehaha County, South Dakota, reviewed the plaintiffs’ post-sale lawsuit alleging economic duress, breach of operating agreement, breach of fiduciary duty, tortious interference, shareholder oppression, unjust enrichment, and sought accounting and injunctive relief. The circuit court granted summary judgment for the defendants on all counts, reasoning that the plaintiffs voluntarily entered the agreement, had legal alternatives, and that the contract itself contained a waiver of further claims. The court also addressed each substantive claim on its merits, finding no legal basis for recovery.On appeal, the Supreme Court of the State of South Dakota affirmed the circuit court’s grant of summary judgment. The Supreme Court held that, under either the three-part or two-part test for economic duress, the plaintiffs failed to show involuntary acceptance or lack of reasonable alternatives. The court also found no breach of the operating agreement or fiduciary duties, no tortious interference or shareholder oppression, and no basis for unjust enrichment or usurpation. The holding confirms the validity and enforceability of the purchase agreement and disposes of all claims against the defendants. View "Trigger Energy Holdings v. Stevens" on Justia Law

This case concerns a contractual dispute between two companies engaged in the purchase and sale of natural gas. In 2010, the parties entered into a base contract using a standard industry form that governed their future transactions, with specific delivery obligations detailed in transaction confirmations executed in October 2020. Under these confirmations, one party was required to deliver fixed and variable amounts of gas to the other at agreed prices. During Winter Storm Uri in February 2021, significant disruptions in natural gas supply occurred, and the seller delivered far less gas than contracted over a six-day period. The seller invoked the contract’s force majeure provision, citing weather-related supply loss and declarations by its affiliates. The buyer, however, disputed the sufficiency and applicability of this claim, asserting the seller could have obtained gas from other sources.After the seller initiated a declaratory judgment action in Texas state court, the case was removed to the United States District Court for the Southern District of Texas. The district court granted partial summary judgment to the seller, holding that force majeure excused its nonperformance, and found the contract did not require the purchase of replacement gas. The question of how to allocate delivered gas between the two contracts (with differing prices) went to a jury, which found for the buyer, concluding that available gas should be allocated first to the fixed-price contract.Upon appeal, the United States Court of Appeals for the Fifth Circuit reviewed the case. The court reversed the district court’s summary judgment on force majeure, finding factual disputes about the seller’s gas supply and its reasonable efforts to avoid nonperformance. The court affirmed the jury’s verdict regarding allocation, holding that trade usage could supplement the contract and sufficient evidence supported the jury’s finding. The case was remanded for further proceedings on force majeure. View "MIECO v. Targa Gas Marketing" on Justia Law