Justia Energy, Oil & Gas Law Opinion Summaries

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

Several trusts owned by the Garaas family hold mineral interests in McKenzie County, North Dakota. Petro-Hunt, L.L.C. operates a well on these lands, which are subject to two distinct spacing units created by orders of the North Dakota Industrial Commission (NDIC): a base unit and an overlapping unit. NDIC issued an order allocating production from the well in the overlapping unit to Section 20, which is part of the base unit but not wholly contained within the overlapping unit. This allocation reduced the Trusts’ royalty interests, prompting them to seek declaratory relief and damages.The Trusts first brought their claims in the District Court of McKenzie County, but the court dismissed the case. The North Dakota Supreme Court affirmed the dismissal, holding that the Trusts were required to exhaust administrative remedies before the NDIC. Subsequently, Petro-Hunt applied to NDIC for clarification on production allocation, and NDIC issued Order No. 33453, allocating production from the overlapping unit to the base unit. The Trusts appealed NDIC’s order to the district court, which affirmed NDIC’s order. The Trusts then appealed to the North Dakota Supreme Court.The Supreme Court of North Dakota held that NDIC had legal authority under statute to allocate oil and gas production among spacing units. However, the court concluded that NDIC did not regularly pursue its authority because it failed to follow proper procedures, including providing notice and opportunity to participate to all affected interest owners. As a result, the Supreme Court reversed the district court’s judgment and vacated NDIC Order No. 33453. The request for attorney’s fees by the Trusts was denied, as the record did not show NDIC acted without substantial justification. View "Garaas v. NDIC" on Justia Law

A solar energy developer sought to build a facility in Maine with an initial capacity of 4.98 megawatts, later reduced to 1.99 megawatts after changes to state law. The developer submitted an interconnection application to the local utility, obtained necessary permits, made payments, and began construction. During the project’s development, delays occurred in procuring key equipment, such as the meter and voltage regulator, resulting in a projected completion date after the statutory deadline of December 31, 2024. Despite the developer’s efforts, the facility was not operational by the required date.The developer petitioned the Maine Public Utilities Commission for a good cause exemption from the Commercial Operation Date deadline under Maine’s Net Energy Billing statute. After discovery and intervention by the Office of the Public Advocate, a Commission staff report recommended granting the exemption. However, the Commission ultimately denied the exemption, finding insufficient evidence that the developer ever received an initial construction schedule projecting completion within the 2024 deadline. The developer subsequently petitioned to reopen the record to submit additional evidence, but the Commission did not act on the petition within the required timeframe, resulting in a deemed denial. The developer appealed to the Maine Supreme Judicial Court.The Maine Supreme Judicial Court affirmed the Commission’s orders. The Court held that the Commission’s factual finding—that the developer failed to prove receipt of an initial schedule with a timely completion date—was supported by substantial evidence. The Court also found the Commission’s interpretation of the statute reasonable, its decision not arbitrary, and its refusal to reopen the record not an abuse of discretion. The judgment of the Commission was affirmed. View "Ellsworth ME Solar, LLC v. Public Utilities Comission" on Justia Law

A group of individuals with beneficial interests in Indian trust lands on the Fort Berthold Reservation in North Dakota challenged the continued operation of an oil pipeline by Andeavor Logistics and related entities after the expiration of a federally granted right-of-way in 2013. Despite the expiration, Andeavor continued to operate the pipeline while negotiating for renewals with both the tribal government and individual landowners, but was unable to secure agreements with all landowners. The plaintiffs, known as the Allottees, alleged ongoing trespass, breach of the expired easement agreement, and unjust enrichment, seeking monetary damages, injunctive relief, and removal of the pipeline.The United States District Court for the District of North Dakota twice dismissed the Allottees’ case, first for failure to exhaust administrative remedies, a decision reversed by the United States Court of Appeals for the Eighth Circuit in a prior appeal (Chase I), which instructed a stay for further agency action. After further BIA proceedings and related litigation (including the Tesoro case), the district court again dismissed all of the Allottees’ claims with prejudice, finding no individual federal common law cause of action for trespass, breach of contract, or unjust enrichment, and denied their motion to intervene in the Tesoro case, concluding the United States adequately represented their interests.On appeal, the United States Court of Appeals for the Eighth Circuit affirmed the district court’s dismissal of the Allottees’ claims for trespass, breach of contract, and unjust enrichment, holding that individual Indian allottees with only equitable interests in land held in trust by the United States lack standing to bring these claims under federal common law. The court also affirmed denial of intervention in the Tesoro litigation. However, the Eighth Circuit remanded for further consideration of whether consolidation of the two related cases is appropriate under Rule 42(a) of the Federal Rules of Civil Procedure. View "Chase v. Andeavor Logistics, L.P." on Justia Law

A group of oil-and-gas royalty owners in Oklahoma, represented by Chieftain Royalty Company, sued EnerVest Energy’s predecessor in 2011 for allegedly underpaying royalties. After EnerVest acquired the wells, the parties reached a $52 million settlement in 2015 to be paid to the class after expenses and attorneys’ fees. Class counsel sought 40% of the fund as fees, plus expenses and an incentive award for the class representative. Two class members objected to the fee and incentive awards.The United States District Court for the Western District of Oklahoma approved the settlement, awarding 33.33% of the fund for attorneys’ fees and a 0.5% incentive award. On appeal, the United States Court of Appeals for the Tenth Circuit affirmed the settlement but reversed the fee and incentive awards, holding that Oklahoma law applied and required a lodestar analysis (not solely a percentage-of-the-fund), and that incentive awards must be based on time spent on case-related services. Following remand and a clarifying decision from the Oklahoma Supreme Court in Strack v. Continental Resources, Inc., the district court reapplied the statutory factors, found a 33.33% fee reasonable (supported by a 2.15 lodestar multiplier), and adjusted the incentive award based on the representative’s service. A subsequent Tenth Circuit appeal led to vacatur of the fee award on procedural notice grounds, then the district court reinstated the same fee after proper notice.On this third appeal, the United States Court of Appeals for the Tenth Circuit held that Oklahoma law does not impose a hard ceiling on percentage fees or lodestar multipliers. The district court properly applied Oklahoma’s statutory factors, conducted a thorough reasonableness analysis, and did not abuse its discretion by awarding 33.33% of the fund ($17,333,333.33) as attorneys’ fees. The fee award was affirmed. View "Chieftain Royalty Company v. Enervest Energy Institutional Fund XIII-A" on Justia Law

The case centers on the Trans Alaska Pipeline System (TAPS), which transports crude oil from Alaska’s North Slope, with oil from different shippers being commingled in the pipeline. To address variations in oil quality, a “Quality Bank” compensates shippers who inject higher-quality oil and charges those with lower-quality oil. The valuation of one particular oil component, Resid—the heaviest and least valuable cut—has been disputed for decades. Petro Star, a shipper whose refineries lack specialized units to further process Resid, argued that Resid was undervalued, while ConocoPhillips contended it was overvalued. The TAPS owners, who administer the Quality Bank, also challenged a Federal Energy Regulatory Commission (FERC) finding that the Bank’s administrator violated tariff provisions.Following a 2013 FERC investigation into the Resid valuation formula, both Petro Star and ConocoPhillips intervened, seeking changes. After initial FERC findings were remanded for further explanation by the United States Court of Appeals for the District of Columbia Circuit, FERC held additional hearings. An administrative law judge (ALJ) concluded the formula was just and reasonable, and FERC largely affirmed this result, also finding a tariff violation by the Quality Bank administrator for failing to update formula yields based on monthly Resid testing.On review, the United States Court of Appeals for the District of Columbia Circuit held that FERC’s formula for valuing Resid remains just and reasonable, as neither Petro Star nor ConocoPhillips demonstrated the formula to be unjust or unreasonable. The court also upheld FERC’s finding that the Quality Bank administrator violated the tariff by not updating formula yields with each test, but found FERC’s prospective remedy—requiring monthly testing and annual yield updates—was appropriate. The court denied all three petitions. View "Petro Star Inc. v. FERC" on Justia Law

A businessman from Kazakhstan alleged that he was wrongfully detained and psychologically coerced by the country’s National Security Committee into signing unfavorable business agreements, including waivers of legal claims and a forced transfer of valuable company shares. The business at issue, CAPEC, operated in Kazakhstan’s energy sector and held significant assets, some of which were allegedly misappropriated by fellow shareholders and transferred through U.S. financial institutions. The plaintiff claimed these actions harmed him economically, including the loss of potential U.S.-based legal claims.Following unsuccessful litigation in Kazakhstan, the plaintiff initiated suit in the United States District Court for the Eastern District of New York, seeking to invalidate the coerced agreements and recover damages under the Racketeer Influenced and Corrupt Organizations Act (RICO), the Alien Tort Statute, and other state and federal laws. The district court dismissed the complaint for lack of subject-matter jurisdiction, finding that the plaintiff, as a permanent resident alien, could not establish diversity jurisdiction against foreign defendants, that the alleged torts occurred outside the U.S., and that the plaintiff failed to allege a domestic injury required for civil RICO claims. The court denied leave to amend, determining that any amendment would be futile.The United States Court of Appeals for the Second Circuit reviewed the matter de novo, affirming the district court’s judgment. The Second Circuit held that claims against the National Security Committee were barred by the Foreign Sovereign Immunities Act, as its conduct was sovereign rather than commercial. For the individual defendants, the court found that the plaintiff failed to allege a domestic injury under RICO, as the harm and racketeering activity occurred primarily in Kazakhstan. The court further concluded that amendment of the complaint would have been futile. The judgment was affirmed. View "Yerkyn v. Yakovlevich" on Justia Law

PJM Interconnection LLC manages an extensive electrical grid across thirteen states and the District of Columbia. To ensure competitive market conditions and compliance with regulatory standards, PJM employs Market Monitoring Analytics LLP as its independent market monitor (IMM). For several years, IMM attended meetings between PJM’s Board of Managers and the Liaison Committee, a nonvoting body designed to facilitate communication between PJM Members and the Board. However, PJM began enforcing the Liaison Committee’s charter provision, restricting attendance to end-use customers and regulated utilities, thereby excluding IMM from future meetings.After this exclusion, IMM filed a complaint with the Federal Energy Regulatory Commission (FERC), arguing that PJM’s action violated Section IV.G of its tariff, which IMM interpreted as granting it the right to participate in such stakeholder processes. FERC reviewed the complaint and dismissed it. The Commission determined that Section IV.G only applied to decision-making bodies within PJM that handle proposed revisions to tariffs or market rules, not to the Liaison Committee, which functions solely as a communication forum and does not engage in decision-making or voting.IMM subsequently petitioned the United States Court of Appeals for the District of Columbia Circuit for review of FERC’s decision. The Court, before addressing the merits, examined whether IMM had standing to challenge its exclusion. The Court held that IMM failed to demonstrate a concrete or particularized injury resulting from its inability to attend the Liaison Committee meetings, as IMM retained access to all market data required for its monitoring functions and had alternative avenues for communication with the Board. The Court further found that IMM had not shown any expenditure of resources to counteract the alleged harm. Consequently, the petition was dismissed for lack of jurisdiction due to IMM’s lack of standing. View "Independent Market Monitor for PJM v. FERC" on Justia Law

South Branch Solar, L.L.C. sought approval to build a 130-megawatt solar-powered electric generation facility in Hancock County, Ohio, on approximately 700 acres of agricultural land. The project included solar panels, related equipment, and infrastructure. Local government officials and residents had varied reactions, with some supporting the facility for its economic and environmental benefits and others expressing concerns about impacts on land use, aesthetics, property values, wildlife, and local drainage systems. Travis Bohn, who lives near the project site, opposed the project and intervened in the proceedings.The Ohio Power Siting Board reviewed South Branch’s application, which included environmental studies and mitigation plans. After a public hearing and extensive opportunity for public input, the board staff recommended approval subject to 50 conditions. A joint stipulation was agreed to by South Branch, the board staff, the county commissioners, and the Ohio Farm Bureau Federation, but not by Bohn. Following an adjudicatory hearing, the Board issued an order granting the certificate. Bohn unsuccessfully sought rehearing, arguing that the Board misapplied statutory criteria, failed to require adequate wildlife and flood analysis, and improperly weighed local opposition and economic impacts.The Supreme Court of Ohio reviewed the Board’s order using a standard that allows reversal only if the order was unlawful or unreasonable. The court held that the Board’s determinations under R.C. 4906.10(A)(2), (A)(3), and (A)(6)—concerning environmental impact, minimum adverse impact, and public interest—were supported by sufficient probative evidence and complied with statutory and regulatory requirements. The court found no reversible error in the Board’s approval of South Branch’s application and affirmed the order granting the certificate. View "In re Application of S. Branch Solar, L.L.C." 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