Justia Energy, Oil & Gas Law Opinion Summaries

Plaintiffs appealed the district court's grant of summary judgment to Alabama Power on their complaint alleging that Alabama Power unreasonably lowered the water levels of Smith Lake. Determining that Article III's standing requirements have been met, the court concluded that the district court did not abuse its discretion in declining to issue a declaratory judgment concerning plaintiffs' purported riparian rights. Plaintiffs did not have a right to a declaratory judgment and the district court did not abuse its substantial discretion by assuming plaintiffs had riparian rights and then resolving their claims on an alternative basis. The court agreed with the district court that plaintiffs' claims were a collateral attack on the FERC's final relicensing determination. Plaintiffs' argument that they were not subject to the exclusive judicial review provision of section 825l(b) of the Federal Power Act, 16 U.S.C. 825l(b), because they are distinct parties from Smith Lake Improvement and Stakeholders Association (SLISA) and did not participate in the proceedings before the FERC was unavailing. Section 821 of the Federal Power Act, 16 U.S.C. 821, did not allow plaintiffs to veto the operation of a project that was approved and licensed by the FERC. Accordingly, the court affirmed the district court's judgment denying plaintiffs' motion for partial summary judgment and granting summary judgment to Alabama Power.View "Otwell, Sr., et al. v. Alabama Power Co." on Justia Law

This case stemmed from Pioneer's efforts to seek insurance coverage under Steadfast's umbrella policy for costs and expenses incurred in cleaning up and remediating some property. Applying Louisiana's choice-of-law rules, the court concluded that Texas law applied because the insurance policy at issue was issued and delivered under Texas insurance statutes. The district court found that Texas and Louisiana law do not conflict on the issue of insurance policy interpretation and applied Louisiana law. Because neither party challenged this determination, the court did the same. On the merits, the court concluded that the district court did not err by holding that the exclusions within the Property Damage exclusion and the Blended Pollution endorsement were applicable, thus precluding coverage for the costs of remediating the Meaux property and containment; the costs of containment were precluded by the clear language of the policy; the costs of remediating the Rutherford property were unavailable due to its inability to allocate remediation costs; the costs of settling the lawsuits were unavailable due to the retained limit; and the costs of plugging the well were precluded by the OIL endorsement. Accordingly, the court affirmed the judgment of the district court. View "Pioneer Exploration, L.L.C. v. Steadfast Ins. Co." on Justia Law

Mid-Continent Casualty Company brought a declaratory judgment action to settle an issue with its commercial commercial general liability (CGL) policy issued to Pennant Service Company. In 2001, True Oil Company, an owner and operator of oil and gas wells, entered into a master service contract (MSC) with Pennant for work on a well in Wyoming. The MSC included a provision whereby Pennant agreed to indemnify True Oil resulting from either Pennant or True Oil's negligence. In July 2001, Christopher Van Norman, a Pennant employee, was injured in an accident at True Oil's well. Van Norman sued True Oil in Wyoming state court for negligence. In accordance with the MSC's indemnity provision, counsel for True Oil wrote to Pennant requesting indemnification for its defense costs, attorney fees, and any award that Van Norman might recover against it. Mid-Continent refused to defend or indemnify True Oil based on Wyoming's Anti-Indemnity Statute, which invalidates agreements related to oil or gas wells that "indemnify the indemnitee against loss or liability for damages for . . . bodily injury to persons." In May 2002, True Oil brought a federal action against Mid-Continent for declaratory relief, breach of contract (CGL policy), and other related claims. In February 2005, the district court granted Mid-Continent summary judgment, determining that the MSC's indemnity provision, when invoked with respect to claims of the indemnitee's own negligence was unenforceable as a matter of public policy. The court held that Mid-Continent was not required to defend or indemnify True Oil in the underlying suit as it then existed because "where an indemnification provision in a MSC is void and unenforceable, the insurer never actually assumed any of the indemnitee's liabilities under the policy." The district court granted summary judgment to True Oil, determining Mid-Continent breached its duty to defend and indemnify True Oil. As damages, the court awarded True Oil the amount it paid to settle the underlying suit and the attorney fees and costs incurred in defending itself. Mid-Continent appealed the district court's judgment. Finding no reversible error, the Tenth Circuit affirmed. View "Mid-Continent v. True Oil Company" on Justia Law

In consolidated appeals, two groups challenged the BPA's decision to forgo refunds after the court invalidated three sets of contractual arrangements in which BPA agreed to subsidize certain longtime industrial customers rather than sell them power directly. The court held that these subsidy arrangements were unreasonable and were contrary to BPA's authority. The court remanded to BPA regarding whether it could or should seek refunds of the improper subsidies. BPA concluded that it was contractually barred from seeking refunds as to some of the invalidated contracts; it had no legal or equitable basis for seeking refunds as to the others; and if it did pursue recovery of the subsidies, it might become mired in counterproductive, protracted litigation. Petitioners' core argument is that their power costs have been impermissibly raised by BPA's decision because, if BPA did seek refunds of the subsidies, it could pass the recovered funds to its customers as lower rates. The court rejected petitioners' contention that BPA has a duty, under either the Constitution's Appropriations Clause or BPA's governing statutes, to seek all refunds to which it may be entitled. The court concluded that BPA's decisions in most respects sufficiently and reasonably balanced its competing obligations to merit the court's deference, except in one respect. The court denied the petition for review with regard to the decision not to seek refunds with respect to the 2007 Block Contracts and the Port Townsend Contract. The court granted the petition and remanded to BPA for further proceedings with regard to recovery of subsidies paid under the Alcoa Amendment. View "ICNU v. BPA" on Justia Law

The Smiths appealed from the district court's order condemning portions of their property for the construction of a natural gas pipeline owned and operated by Alliance and granting Alliance immediate use and possession of the condemned land. The court concluded that it lacked jurisdiction to consider the Smiths' statutory challenges based on 18 C.F.R. 157.6(d) and North Dakota Administrative Code (NDAC) 69-06-08-01. The court also concluded that the Smiths received reasonable notice that Alliance was applying to FERC for the right to condemn their land; the court rejected the Smiths' allegation that Alliance violated several state procedural rules in bringing the condemnation action because Federal Rule of Civil Procedure 71.1 preempted all of these state procedures; Alliance satisfied any duty to negotiate with the Smiths in good faith pursuant to the Natural Gas Act, 15 U.S.C. 717f(h); and the district court did not abuse its discretion in holding that Alliance was entitled to immediate use and possession pursuant to Dataphase Sys., Inc. v. C L Sys., Inc. Accordingly, the court affirmed the judgment of the district court.View "Alliance Pipeline L.P. v. 4.360 Acres of Land, et al." on Justia Law

BNE Energy, Inc. submitted two petitions for declaratory rulings seeking the Connecticut Siting Council’s approval for the construction and operation of three electric generating wind turbines on two separate properties in the town of Colebrook. Plaintiffs intervened in the proceedings. The Council approved the petitions with conditions, and Plaintiffs appealed. The trial court dismissed Plaintiffs’ appeals. The Supreme Court affirmed, holding that the trial court did not err in concluding that the Council (1) had jurisdiction over BNE’s petitions; (2) was authorized to attach conditions to its approval of the petitions; (3) was authorized to approve the petitions even though it had not determined that the proposed projects comply with state noise law; (4) properly approved of shorter hub heights for one of the projects; and (5) did not deprive Plaintiffs of their right to fundamental fairness during the hearings on the petitions. View "FairwindCT, Inc. v. Conn. Siting Council" on Justia Law

The Federal Power Act, 16 U.S.C. 791a., authorizes federal regulation of transmitting and selling electric power in interstate commerce and grants the Federal Energy Regulatory Commission (FERC) jurisdiction over transmission of electric energy in interstate commerce and sale of such energy at wholesale in interstate commerce. The “filed rate doctrine” requires that interstate power rates filed with or fixed by FERC be given binding effect by state utility commissions determining intrastate rates. The electric companies suffered $250 million in “line losses,” energy lost when electricity travels over power lines, and interest related to those costs. Their line losses had increased under a mandate by FERC relating to calculation. The companies attempted to recover those costs on their customers’ utility bills. The Pennsylvania Public Utility Commission (PUC) rejected their proposal to classify line-loss costs as a cost of transmission (as opposed to a cost of electricity generation), preventing them from passing those costs through to their customers. The companies lost in Pennsylvania state courts; the U.S. Supreme Court denied review. The companies then sought declaratory judgment and injunctive relief in federal court against the PUC. The district court held that their unsuccessful state efforts precluded relief in federal court under the doctrine of issue preclusion. The Third Circuit affirmed.View "Metro. Edison Co. v. PA Pub. Util. Co." on Justia Law

The issue this case presented for the Supreme Court's review centered on whether payees who are entitled to interest on suspended oil and gas royalty payments could contract away their statutorily mandated interest payments. The district court awarded interest payments from Defendant Yates Petroleum Company to Petitioners on the basis that NMSA 1978, Section 70-10-4 (1991) mandated that payees be paid interest on funds to which they are entitled. The district court found that this provision of Yates’ form division order was unenforceable because it contravened Section 70-10-4, and therefore Yates owed the interest to Petitioners. Yates appealed and the Court of Appeals reversed, holding that the parties could contract around the provisions of the statute. According to Yates, its form division order allowed it to withhold payment of oil and gas royalties pending the resolution of title issues, and when it eventually disburses royalties, to pay the proceeds without interest. After review of the record, the Supreme Court reversed the Court of Appeals and affirmed the district court’s ruling. View "First Baptist Church of Roswell v. Yates Petroleum Corp." on Justia Law

Forester was awarded benefits under the Black Lung Benefits Act, 30 U.S.C. 901-944, as amended by the Patient Protection and Affordable Care Act, 124 Stat. 119, after the ALJ determined that Forester’s five years of private coal mine employment with Navistar’s predecessor, combined with his16 years of employment as a mine inspector with the U.S. Department of Labor’s Mine Safety and Health Administration , rendered him eligible for the rebuttable presumption that, having been employed for at least 15 years in underground coal mines, and having a totally disabling respiratory or pulmonary impairment, he was totally disabled due to pneumoconiosis, commonly known as black lung disease. The Benefits Review Board upheld the award. The Sixth Circuit vacated, holding that a federal mine inspector is not a “miner” for purposes of the BLBA, and remanding for determination of whether Forester is entitled to an award of BLBA benefits without the benefit of the 15-year presumption. View "Navistar, Inc. v. Forester" on Justia Law

Dissatisfied with the stock and reliability of power-generating facilities in New Jersey, the state adopted the Long Term Capacity Pilot Program Act (LCAPP), instructing New Jersey’s Board of Public Utilities to promote construction of new power-generating facilities in the state. Rather than pay for the construction of these plants directly, the Board of Public Utilities crafted a set of contracts, called Standard Offer Capacity Agreements, which assured new electric energy generators 15years of revenue from local utilities and, ultimately, New Jersey ratepayers. LCAPP guaranteed revenue to new generators by fixing the rates those generators would receive for supplying electrical capacity, that is, the ability to make energy when called upon. The district court found LCAPP invalid. The Third Circuit affirmed. With the Federal Power Act, Congress placed “the transmission of electric energy in interstate commerce and the sale of such energy at wholesale in interstate commerce” under federal control, 16 U.S.C. 824(a). When New Jersey arranged for LCAPP generators to receive preferential capacity rates, the state entered into a field of regulation beyond its authority. Federal law preempts, and invalidates, LCAPP and the related Standard Offer Capacity Agreements.View "PPL EnergyPlus, LLC v. Solomon" on Justia Law