Justia Energy, Oil & Gas Law Opinion Summaries

The Supreme Court reversed the judgment of the court of appeals in this case concerning whether Apache Corporation breached its purchase-and-sale agreements (PSAs) with Sellers, holding the court of appeals erred by failing to apply the default common-law rule of contractual construction to the parties' dispute and incorrectly construed other contractual provisions at issue.In the PSAs at issue, Sellers sold seventy-five percent of their working interests in 109 oil-and-gas leases to Apache. The trial court rendered final judgment for Apache on the grounds that Sellers had no evidence of damages and could not prevail on their claims. The court of appeals reversed in part. At issue was whether the default rule for treating contracts that use the words "from" or "after" a specified date to measure a length of time should be applied in this case. The Supreme Court reversed the judgment of the court of appeals as to the issues that the parties presented for review, holding that the parties' agreement in this case implicated the default rule without displacing it. View "Apache Corp. v. Apollo Exploration, LLC" on Justia Law

Utility companies responsible for a planned electric transmission line asked the Fish and Wildlife Service (FWS) to allow construction across the Upper Mississippi River National Wildlife and Fish Refuge alongside an existing road and railroad. Rural Utilities Service completed an environmental impact statement under the National Environmental Policy Act (NEPA), 42 U.S.C. 4332(2)(C). FWS adopted the statement and issued a right-of-way permit.While litigation was pending, the utility companies sought to slightly alter the route and asked FWS to consider a land exchange. FWS discovered that it had relied on incorrect easement documents in issuing its original determination. It revoked the determination and permit but promised to consider the proposed land exchange. The district court ruled in favor of the environmental groups but declined to enjoin ongoing construction of the project on private land outside the Refuge.The Seventh Circuit vacated in part, first rejecting a mootness argument. FWS has revoked the compatibility determination but has not promised never to issue a new permit. However, FWS’s current position does not meet the criteria of finality. Whatever hardship the plaintiffs face comes not from FWS’s promise to consider a land exchange but from the Utilities’ decision to build on their own land, so the district court erred in reviewing the merits of the proposed land exchange. Plaintiffs’ request for relief against the Utilities under NEPA likewise is premature. Adopting the environmental impact statement did not “consummate” the decisionmaking process. View "Driftless Area Land Conservancy v. Rural Utilities Service" on Justia Law

Marvin and Mildred Bay (“the Bays”) challenged a court order dismissing their trespass claim against Anadarko E&P Onshore LLC and Anadarko Land Corporation (collectively, “Anadarko”). Anadarko, an oil and gas company, owned the mineral rights under the Bays’ farm. The Bays brought a putative class action along with other surface landowners against Anadarko, alleging that Anadarko’s mineral lessees had exceeded the scope of their mineral rights by drilling multiple vertical wells on the surface owners’ land when it was possible to drill fewer wells of the “directional” type. At the conclusion of the Bays’ presentation of evidence, the district court found that the Bays’ evidence failed as a matter of law to demonstrate that Anadarko’s activities amounted to a trespass and dismissed the case. Finding that the district court applied the wrong legal standard, the Tenth Circuit reversed the dismissal in "Bay I," finding that Colorado’s common law of trespass required the Bays to show that Anadarko’s lessees had “materially interfered” with the Bays’ farming operations. The appellate court questioned whether the record demonstrated that the Bays met this standard in their trial, but because Anadarko had not raised this specific issue, the case was remanded to the district court for further proceedings. On remand, the district court again granted judgment as a matter of law to Anadarko on the material interference issue. Specifically, the court first held that it was bound by the Tenth Circuit's interpretation in Bay I of the material interference standard, then found that the Bays showed only that Anadarko’s conduct inconvenienced them—which was insufficient to satisfy the material interference standard. The Bays again appealed, arguing that the Tenth Circuit's discussion of the material interference standard in Bay I was dictum; thus, the district court incorrectly determined that it was bound to apply that standard. They further argued the material interference standard applied by the district court was inconsistent with the Colorado standard for trespass outlined in Gerrity Oil & Gas Corp. v. Magness, 946 P.2d 913 (Colo. 1997), and that the evidence they presented in their trial established a prima facie case of material interference under Gerrity. The Tenth Circuit determined the district court did not err in its second dismissal and affirmed judgment. View "Bay, et al. v. Anadarko E&P Onshore, et al." on Justia Law

In June 1949, Axel Anderson conveyed to L.S. Youngblood a ½ mineral interest in several tracts of land in Mountrail County, North Dakota (“the Disputed Lands”)In 2011, with the Andersons and Henry Johnson now deceased, grantee Johnson’s successors filed a quiet title action in state court against Nancy Finkle and grantor Andersons’ other successors to resolve the over conveyance, seeking title to a ½ mineral interest in the Disputed Lands (“the Finkle Litigation”).inkle appealed the quiet title order and judgment, arguing that an exception to the Duhig rule that is not at issue in this appeal applied and therefore the trial court should have awarded each side a 1/4 mineral interest in the Disputed Lands. In January 2008, Finkle, a successor to grantor Andersons’ mineral interests, conveyed by oil and gas lease her mineral interest leasehold and operating rights in the Disputed Lands to Montana Oil Properties, Inc. Northern Oil did not participate while Finkle defended the Johnson successors’ quiet title claim and asserted her own deed reformation counterclaim in state court.   The Eighth Circuit affirmed, holding that the district court correctly granted summary judgment to the defendant on the ground that due to an over-conveyance of rights, Plaintiff had not obtained any mineral rights in the subject property when it acquired its interest in a leasehold. Further, the court held that the district court granted summary judgment dismissing Northern Oil’s reformation claim as time-barred by the ten-year statute of limitations in N.D.C.C. Section 28-01-15(2), applying a Supreme Court of North Dakota decision issued after the Finkle Litigation, Western Energy Corp. v. Stauffer, 921 N.W.2d 431, 434-35 (N.D. 2019). View "Northern Oil and Gas, Inc. v. EOG Resources, Inc." on Justia Law

The Supreme Court quashed the order of the district court granting the motion to dismiss filed by the State of Rhode Island, acting by and through the Division of Taxation (Division), in this appeal stemming from a series of transactions for the purchase and sale of gasoline, holding that the district court erred in granting the Division's motion to dismiss based on Plaintiff's failure to exhaust its administrative remedies.The tax at issue was levied on a transaction between Plaintiff and another party and was the subject of several transactions between various entities. Plaintiff reimbursed a third-party for the tax assessed on the sale of 300,000 barrels of gasoline and then initiated this action alleging constitutional violations and violations of the Motor Fuel Tax. The trial judge dismissed the case for Plaintiff's failure to exhaust administrative remedies. The Supreme Court reversed, holding that the trial judge erroneously dismissed the action based on Plaintiff's failure to exhaust its administrative remedies. View "Gunvor USA, LLC v. State, ex rel. Division of Taxation" on Justia Law

The Supreme Court quashed the order of the district court dismissing two actions challenging the State Division of Taxation's denial of Plaintiff's claim for a refund of $4,280,039 paid for Motor Fuel Tax assessed on the purchase and sale of 300,000 barrels of gasoline, holding that the the district court erred.Plaintiff purchased 300,000 barrels of gasoline from Defendant. The Division imposed a motor fuel taxes on the gasoline that was charged to Defendant, as the seller of the gas. Defendant sought reimbursement from Plaintiff, which sought a refund from the Division under R.I. Gen. Stat. 31-36-13. The Division denied Plaintiff's claim for a refund on the grounds that Plaintiff did not have a right to pursue a refund. Plaintiff then filed a complaint alleging constitutional violations and violations of the Motor Fuel Tax, among other claims. Plaintiff then appealed the Division's denial of its request for a refund. The hearing officer concluded that Plaintiff's claim was barred by both res judicata and administrative finality. Ultimately, both cases were dismissed. The Supreme Court quashed the decisions below, holding (1) Plaintiff had standing; (2) the trial judge erred in concluding that res judicata barred Plaintiff's appeal; and (3) the doctrine of administrative finality did not apply to bar Plaintiff's claims. View "Apex Oil Co. v. State, ex rel. Division of Taxation" on Justia Law

This petition challenges several interrelated orders of the Federal Energy Regulatory Commission (“FERC” or “Commission”) that permitted the creation of a new energy transmission service across several states in the Southeast region of the United States, entitled the Southeast Energy Exchange Market (“SEEM”). FERC adopted the first order (“Deadlock Order”) by operation of law when its four Commissioners deadlocked 2-2 on whether the overall proposal was “just and reasonable” and otherwise met the requirements of the Federal Power Act (“FPA” or “Act”), and related FERC regulations. In a later order by majority vote, the Commission accepted tariff revisions by transmission service providers within SEEM to enable the new transmission service. Petitioners challenged these orders throughout the initial proceedings, on rehearing at the Commission, and now in this petition.   The DC Circuit granted the petition in part, denied the petition in part, and remanded it to the Commission for further proceedings. The court explained that since SEEM “began operations in November 2022” and only provides energy transactions for non-firm service, it follows that vacatur would not be disruptive, and the parties offer no arguments to the contrary in their briefing. Accordingly, vacatur of the Tariff Order is appropriate. The court wrote that the Commission’s orders finding Petitioners’ rehearing requests of the Deadlock Order untimely are vacated, and the petition—as it relates to review of the Deadlock Order and the associated orders accepting amendments to the SEEM Proposal—is remanded without vacatur of the related orders. View "Advanced Energy United, Inc. v. FERC" on Justia Law

XO Energy petitioned for a review of the Federal Energy Regulatory Commission’s approval of filings implementing a regional transmission organization’s (“RTO”) revised Forfeiture Rule for Financial Transmission Rights (“FTRs”). It contends that the Commission erred as a matter of law in declining to issue refunds to market participants who incurred forfeitures under the unapproved interim Rule. It further contends that the Commission’s approval of the revised 2021 Rule was arbitrary and capricious.   The DC Circuit granted the petition in part and denied it in part. The court affirmed the Commission’s denial of refunds and remands without vacating the 2021 Rule for further explanation of the Commission’s decision to exclude consideration of leverage as a required element of the Rule. The court explained that although the Commission acknowledges that leverage might be one way to determine cross-product manipulation, it states that it opted to allow PJM to employ other means to detect this conduct rather than require exemptions based on leverage. That is the extent of the Commission’s explanation. It does not address XO Energy’s position that market manipulation cannot occur when the net losses of a trader’s virtual transaction portfolio exceed the net profits from its FTR portfolio. Nor does it explain why the exclusion of this requirement strikes the appropriate balance between preventing manipulative conduct and not hindering legitimate hedging activity. Absent such explanation of its decision, the Commission’s failure to order a leverage exemption appears arbitrary and capricious. View "XO Energy MA, LP v. FERC" on Justia Law

This appeal was the second relating to a suit brought by the City of Hesperia (the City) against respondents Lake Arrowhead Community Services District and the Board of Directors of Lake Arrowhead Community Services District (jointly, the District) regarding a proposed 0.96-megawatt solar photovoltaic project (the Solar Project) that the District had been planning to develop on six acres of a 350-acre property it owned, known as the Hesperia Farms Property. The Hesperia Farms Property was located within the City’s municipal boundary and was generally subject to the City’s zoning regulations. The District first approved its Solar Project in December 2015, after determining that the project was either absolutely exempt from the City’s zoning regulations under Government Code section 53091, or qualifiedly exempt under Government Code section 53096. The City sought a writ of mandate prohibiting the District from further pursuing the Solar Project. In Hesperia I, the Court of Appeal determined the District’s Solar Project was not exempt from the City’s zoning regulations under Government Code section 53091’s absolute exemption, or under Government Code section 53096’s qualified exemption. The Court concluded, however, that Government Code section 52096’s qualified exemption did not apply to the District’s approval of the Solar Project only because the District had failed to provide substantial evidence to support its conclusion that there was no other feasible alternative to its proposed location for the Solar Project. This result left open the possibility that the District could undertake further analyses and show that there was no feasible alternative to the Solar Project’s proposed location in order to avoid application of the City’s zoning ordinances. A few months after the District made its second no-feasible-alternative determination with respect to the Solar Project, the City filed a second petition for writ of mandate and complaint challenging the Solar Project. The trial court ultimately denied the City’s second petition. When the City appealed, the Court of Appeal concluded the trial court did not err in rejecting the City’s petition for writ of mandate. View "City of Hesperia v. Lake Arrowhead Community Services Dist." on Justia Law

The Supreme Court affirmed the decision of the Public Utilities Regulatory Authority (PURA) establishing a regulatory framework for a certain renewable energy product, holding that the trial court correctly correctly determined that the reactions did not violate the dormant commerce clause.In 2020, PURA imposed a series of restrictions on retail electric suppliers offering Connecticut customers voluntary products, known as voluntary renewable offers (VROs), consisting of renewable energy credits (REC) bundled with electric supply. One of the restrictions at issue, the geographic restriction, prohibited VROs from containing RECs sourced outside of particular geographic regions. The other restriction, the marketing restriction, required suppliers to provide clear language informing consumers that a VRO backed by RECs is an energy product backed by RECs rather than a renewable energy itself. Plaintiffs argued that both restrictions violated the dormant commerce clause. The trial court rejected Plaintiffs' commerce clause arguments as to each restriction. The Supreme Court affirmed, holding that there was no error. View "Direct Energy Services, LLC v. Public Utilities Regulatory Authority" on Justia Law