Justia Energy, Oil & Gas Law Opinion Summaries

Noble Energy and other lessees sued in the Court of Federal Claims, alleging that application of the Coastal Zone Management Act, 16 U.S.C. 1451-1464, suspension requests constituted a material breach of their lease agreements to drill for, develop, and produce oil and natural gas on submerged lands off the coast of California. The Court of Federal Claims agreed; on appeal the Federal Circuit affirmed. One year after the Federal Circuit's decision in the breach-of-contract litigation, the Minerals Management Service (MMS), sent a letter to Noble ordering it to plug and abandon Well 320-2 permanently. The district court ruled that the common law doctrine of discharge did not relieve Noble of the regulatory obligation to plug its well permanently, an obligation that the lease did not itself create. Resolution of the dispute depended on what the plugging regulations meant. The court held that it was up to MMS's successor to interpret its regulation in the first instance and to determine whether they apply in situations like Noble's. If they do, the agency must explain why. Therefore, the court vacated the judgment and sent the case back to the district court with instructions to vacate Interior's order and to remand to the Secretary for further proceedings. View "Noble Energy, Inc. v. Salazar, et al." on Justia Law

Plaintiff Arnold Oil Properties, LLC hired Defendant Schlumberger Technology Corp. to perform a specialized cement job on its deep-zone gas well. After Schlumberger poured too much cement into the well, Arnold sued for breach of contract and negligence. The district court concluded as a matter of law that an alleged exculpatory provision in the parties' contract was an indemnification provision and therefore did not bar Arnold's recovery. After a jury found the parties were in unequal bargaining positions, the district court denied Schlumberger's request to enforce the contractual limitation-of-liability provision. Schlumberger appealed the district court's denial of summary judgment and its denial of judgment as a matter of law. Finding that the evidence supported the jury's finding, the Tenth Circuit affirmed the district court's grant of summary judgment in favor of Arnold. View "Arnold Oil Properties LLC v. Schlumberger Technology Corp." on Justia Law

In 2008 the district court calculated damages for the government's partial breach of the Standard Contract for disposal of spent nuclear fuel using the 1991 Annual Capacity Report and the duty of good faith and fair dealing. The Federal Circuit, having set the 1987 ACR as the appropriate acceptance rate for a causation analysis under the Standard Contract, remanded. On remand, the district court set the amount of damages at $89,004,415. The Federal Circuit affirmed, holding that the new judgment accounts for the proper causation times and principle. View "Pacific Gas & Elec. Co. v. United States" on Justia Law

The Industrial Commission and Slawson Exploration Company appealed a district court judgment that reversed the Commission's assessment of a risk penalty against Gadeco, LLC. The issue in this case arose from a challenge to the validity of an invitation to participate in the cost of drilling a well which resulted in the Commission's assessment of a 200 percent risk penalty. Because the Supreme Court was unable to discern the basis for the Commission's decision, the Court reversed the judgment and remanded the case back to the Commission for the preparation of findings that explain the reasons for its decision. View "Gadeco v. Industrial Commission" on Justia Law

Appellant, Whitney Holding Corporation, challenged a decision of the district court quieting title in a certain mineral estate in favor of Appellees, Clarence and Peggy Terry. The Supreme Court affirmed, holding (1) the district court did not err in concluding that the parties intended, and the limited warranty deed conveying the property from Whitney to the Terrys reflected, that Whitney did not reserve a mineral interest in the property; (2) the district court properly determined that the deed was ambiguous and did not err in considering extrinsic evidence to interpret the deed; and (3) the Terrys' quiet title action was not barred by the statute of limitations. View "Whitney Holding Corp. v. Terry" on Justia Law

BP appealed a district court order granting summary judgment in favor of Charles V. Stanley, Jr., and his business (defendants), in BP's action seeking to enforce a restrictive covenant in a deed. BP also appealed the district court's award of attorneys' fees and costs. The court held that the district court erred in finding the Petroleum Restriction (PR), in the Special Warranty Deed that was attached to the Purchase and Sale Agreement (PSA) at issue, was overbroad and unenforceable where the PR did not prohibit Stanley from operating a non-BP-branded vehicle repair business on his property so long as the business did not also sell non-BP-branded gasoline. The court also concluded that the PR's prohibition of the sale of certain enumerated items was too inconsequential to invalidate the entire PR. Therefore, the PR on the whole "afford[s] a fair protection" to BP's interest without being "so large as to interfere with the interests of the public." Therefore, the court reversed the district court's grant of summary judgment to defendants, vacated the fee and cost award, remanding for further proceedings. View "BP Products North America, Inc. v. Stanley, Jr." on Justia Law

Plaintiffs appealed the district court's entry of judgment in favor of defendants on defendants' statute of frauds defense to plaintiffs' lawsuit demanding specific performance on three Purchase and Sale Agreements (PSAs) entered between the parties for the sale/purchase of certain oil and gas leases. The court held that the trial court erred in holding that the lack of finality prevented consideration of the exhibits attached to the PSAs as a part of the contract to convey the property. The exhibits were specifically incorporated into the contract, the exhibits contained a sufficient legal description to meet the statute of frauds, and thus, the PSAs were enforceable by specific performance. View "Preston Exploration Co., et al. v. GSF, L.L.C., et al." on Justia Law

In a bankruptcy adversary proceeding, Capco brought claims of fraud and various business torts against Ryder, Tana, TRT, and Tristone. The claims arose out of a transaction in which Capco purchased from Tana certain oil and gas reserves located in the Gulf of Mexico (the Properties). The bankruptcy court granted summary judgment in favor of Ryder, Tana, TRT, and Tristone and dismissed the claims. The court held that Capco failed to present evidence to demonstrate a genuine issue of material fact about whether Ryder was contracted to provide an independent reevaluation of the Properties and advice at the meeting regarding Capco's decision to close on the Properties. The court also held that because the purchase and sale agreement contained a clear intent to disclaim reliance, the lower courts correctly held that Capco was unable to claim fraudulent inducement based on the prior representations of Tana, TRT, and Tristone. Accordingly, the judgment was affirmed. View "Amco Energy, Inc., et al. v. Tana Exploration Co., et al." on Justia Law

Plaintiff sued Shell for breach of contract, unjust enrichment, and fraud, based on claims that Shell underpaid royalty due under a mineral lease to plaintiff's grandmother. At issue was whether limitations barred a royalty owner's claims against the operator of the field. The court held that the fraudulent concealment doctrine did not apply to extend limitations as a matter of law when the royalty underpayments could have been discovered from readily accessible and publicly available information before the limitations period expired. When, as in this case, the information was publicly available and readily accessible to the royalty owner during the applicable time period, a royalty owner who failed to take action did not use reasonable diligence as a matter of law. Accordingly, because the parties did not dispute that the pertinent information was readily accessible and publicly available, plaintiff's claims were time-barred as a matter of law. View "Shell Oil Co., et al. v. Ross" on Justia Law

Independence County and the City of Clarksville entered into a power purchase and sale agreement that included an arbitration provision. After the City informed the County that it was going to terminate the agreement, the County filed a motion to compel arbitration. The circuit court denied the motion, ruling that the arbitration agreement was unenforceable because (1) the City validly exercised its right to terminate the agreement, and without the revocation of the entire agreement, the City was released from the obligation to arbitrate; and (2) the arbitration agreement lacked mutuality of obligation. The Supreme Court affirmed, holding that the circuit court did not err in ruling that the arbitration agreement was unenforceable due to the absence of mutuality of obligation, and the arbitration agreement was void on that basis. View "Independence County v. City of Clarksville" on Justia Law