Justia Energy, Oil & Gas Law Opinion Summaries

During World War II, the federal government played a significant role in American oil and gasoline production, often telling refineries what to produce and when to produce it. It also rationed crude oil and refining equipment, prioritized certain types of production, and regulated industry wages and prices. This case involves 12 refinery sites, all owned by Valero, that operated during the war, faced wartime regulations, and managed wartime waste. After the war, inspections revealed environmental contamination at each site. Valero started cleaning up the sites. It then sought contribution from the United States, arguing that the government “operated” each site during World War II. It did not contend that government personnel regularly disposed of waste at any of the sites or handled specific equipment there. Nor did it allege that the United States designed any of the refineries or made engineering decisions on their behalf.The Sixth Circuit reversed the district court. The United States was not a refinery “operator” under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. 9601–75. CERCLA liability requires control over activities “specifically related to pollution” rather than control over general pricing and product-related decisions. View "MRP Properties Co., LLC v. United States" on Justia Law

In these two consolidated cases involving claims brought against the Electric Reliability Council of Texas, Inc. (ERCOT) the Supreme Court answered, among other questions, that ERCOT is a governmental unit as defined in the Texas Tort Claims Act and is thereby entitled to pursue an interlocutory appeal from the denial of a plea to the jurisdiction.CPS Energy sued ERCOT and several of its officers for, inter alia, breach of contract. The trial court denied ERCOT'S plea to the jurisdiction. Ultimately, the court of appeals held that ERCOT was a governmental unit entitled to take an interlocutory appeal. In the second case, Panda sued ERCOT for, inter alia, fraud. The trial court denied ERCOT's pleas to the jurisdiction. The court of appeals ultimately held that ERCOT was not entitled to sovereign immunity. The Supreme Court affirmed in the first case and reversed in the other, holding (1) ERCOT was entitled to pursue an interlocutory appeal from the denial of a plea to the jurisdiction; (2) the Public Utility Commission of Texas has exclusive jurisdiction over the parties' claims against ERCOT; and (3) ERCOT was entitled to sovereign immunity. View "CPS Energy v. Electric Reliability Council of Texas" on Justia Law

The Supreme Court affirmed the order of the Public Service Commission (PSC) denying in part and granting in part motions for reconsideration of an order it issued setting forth the inputs it would use to calculate the export credit rate (ECR), holding that this Court lacked jurisdiction as to certain issues and, as to the two remaining issues, the PSC did not exceed the bounds of its authority.The export credit rate system at issue in this case was created to eventually replace the "net metering" program for customers who generated electricity. The PSC engaged in a lengthy public process to decide what factors to consider in calculating the ECR. After the PSC issued an order setting forth the inputs to use for the ECR Appellants filed motions for reconsideration. The PSC granted in part the motions, agreeing to reconsider some of the ECR calculation's components. The Supreme Court dismissed the petition as to issues for which the Court lacked jurisdiction and otherwise denied the motion, holding that the PSC did not exceed the bounds of its authority. View "Vote Solar v. Public Service Comm'n" on Justia Law

The Supreme Court affirmed the judgment of the Minnesota Tax Court reducing the Commissioner of Revenue's valuations of CenterPoint Energy Minnegasco's natural gas distribution pipeline system for January 2, 2018 through January 2, 2019, holding that the Commissioner was not entitled to relief.The tax court reduced the Commissioner's valuations and ordered the Commissioner to recalculate Minnegasco's tax liability. The Commissioner appealed, challenging the tax court's income-equalization and cost approaches. The Supreme Court affirmed, holding that the tax court (1) did not err in the way that it used the Commissioner's initial assessments when evaluating the totality of the evidence and making its independent evaluations; (2) did not abuse its discretion in considering the conflicting expert opinions; and (3) did not clearly err in finding external obsolescence. View "Commissioner of Revenue v. CenterPoint Energy Resources Corp." on Justia Law

Nicole Fitzpatrick obtained a dissolution of her marriage to Jeremy Fitzpatrick. The couple had minor children and significant marital assets, including real property, bank accounts, investments, and personal possessions. Among these were investments in oil and gas assets. The issue this case presented for the Oklahoma Supreme Court’s review centered on the Court of Civil Appeals decision regarding the division of the oil and gas assets. During the course of the marriage, Husband pursued a mutual goal of investments in oil and gas assets through two different ventures. He inextricably tied the Bakken and Energy deals and encumbered marital assets. The trial court found that all the A and B units of both the Bakken and Energy properties were acquired during the marriage through joint efforts of both parties, and were marital property subject to division. Because part of the properties' value lay in their future growth, the trial court considered the most equitable form of property division. The court ordered that future distributions and proceeds flowing from both sets of A and B units were to be held in constructive trust for both parties' benefit, and for Husband to distribute her equal marital share to Wife. COCA reversed the trial court's decisions regarding the Energy A and B units, finding that the trial court should have determined the units' value and set a valuation date. COCA also found that the trial court's use of a constructive trust for the Energy units was not proper. However, COCA did not disturb the trial court's use of a constructive trust with regard to the Bakken units. The Supreme Court affirmed the trial court’s authority to distribute the assets although they could not be valued at the time of the divorce decree; the Court concurred with the trial court’s imposition of a constructive trust to ensure protection of the assets’ future value. View "Fitzpatrick v. Fitzpatrick" on Justia Law

Gulf South Pipeline Company, LLC owned an underground natural gas storage facility in Rankin County, Mississippi. It owned additional properties that ran through thirty-two Mississippi counties. As a public service corporation with property situated in more than one Mississippi county, property belonging to Gulf South was assessed centrally by the Mississippi Department of Revenue rather than by individual county tax assessors. After conducting the central assessment, MDOR apportions the tax revenues among the several counties in which the property is located. A significant amount of the natural gas stored in Gulf South’s Rankin County facility is owned by Gulf South’s customers and, therefore, it is excluded from MDOR’s central assessment. The Rankin County tax assessor requested that Gulf South disclose the volume of natural gas owned by each of its customers. Following Gulf South’s refusal to provide these data, in September 2021 the Rankin County tax assessor gave notice of its intention to assess Gulf South more than sixteen million dollars for approximately four billion cubic feet of natural gas stored by Gulf South but owned by its customers. Gulf South filed suit at the Chancery Court in Hinds County, seeking to enjoin the assessment and seeking a declaratory judgment that MDOR was the exclusive entity with the authority to assess a public service corporation with property located in more than one Mississippi county. On interlocutory appeal, the Mississippi Supreme Court was asked to determine whether venue was proper in Hinds County when Rankin County was named as a defendant and MDOR was joined as a necessary party. The Court held that, under the venue provisions of Mississippi Code Section 11-45-17 and the Court’s consistent construction of these statutory provisions as mandatory and controlling, venue was proper only in Rankin County. Therefore, the chancellor erred by denying Rankin County’s motion to transfer venue. View "Rankin County v. Boardwalk Pipeline Partners, L.P., et al." on Justia Law

The Supreme Court reversed the judgment of the circuit court granting summary judgment for Respondent in this action claiming that Respondent owned fifty percent interest in the oil and gas estate Petitioners purchased at prior tax sales, holding that the circuit court erred.In 1989, Respondent and Petitioners participated in a tax sale after a delinquent taxpayer neglected to pay taxes on 135 acres of property and twenty-five percent of its subjacent oil and gas estate. Respondent bought the property, and Petitioners bought the interest in the oil and gas estate. In 1993, Petitioner brought another twenty-five percent interest in the same oil and gas estate after another tax resulting from a different taxpayer's delinquency. Respondent subsequently filed this lawsuit claiming ownership in the fifty percent interest in the oil and gas estate Petitioners had purchased. The circuit court granted summary judgment for Respondent. The Supreme Court reversed, holding (1) Petitioners purchased a valid tax deed to the oil and gas estate, and Respondent lacked grounds to challenge Petitioners' tax-sale deed; and (2) as to Petitioners' 1995 deed, the delinquent taxpayer clearly owned the twenty-five percent interest in the oil and gas estate for which his taxes were delinquent. View "Collingwood Appalachian Minerals III, LLC v. Erlewine" on Justia Law

The Supreme Court affirmed the judgment of the court of appeals reversing the orders of the trial court granting TotalEnergies E&P USA, Inc.'s motion to stay arbitration before the American Arbitration Association (AAA) and denying MP Gulf of Mexico, LLC's motion to compel that arbitration, holding that the parties' contracts required them to resolve their controversies through arbitration.In the underlying dispute involving oil and gas leases Total E&P filed this suit seeking a declaratory construing the parties' cost sharing agreement. Thereafter, MP Gulf initiated an arbitration proceeding asserting that Total E&P breached the agreement. At issue was whether the parties clearly and unmistakably delegated arbitrability issues to the arbitrator by agreeing to arbitrate their controversies in accordance with the AAA Commercial Rules. The trial court granted Total E&P's motion to stay the AAA arbitration and denied MP Gulf's motion to compel that arbitration. The court of appeals reversed and compelled AAA arbitration. The Supreme Court reversed, holding that the parties clearly and unmistakably delegated to the AAA arbitrator the decision of whether the parties' controversy must be resolved by arbitration. View "TotalEnergies E&P USA, Inc. v. MP Gulf of Mexico, LLC" on Justia Law

Plaintiffs-landowners alleged Anadarko Petroleum Corporation's intracompany practice of leasing its mineral interests to its affiliated operating company, including its 30% royalty rate, had the intent and effect of reducing the value of Plaintiffs’ mineral interests. Plaintiffs claimed Anadarko thereby maintained and furthered its dominant position in the market for leasing oil and gas mineral interests in violation of the Sherman Act § 2 and Wyoming antitrust laws. Plaintiffs sought treble damages and attorneys’ fees under § 4 of the Clayton Act. The federal district court certified a class action, for liability purposes only, comprised of “[a]ll persons . . . having ownership of Class Minerals during the Class Period.” Anadarko appealed the district court’s class certification pursuant to Federal Rule of Civil Procedure 23(f). The Tenth Circuit concluded the district court applied the correct legal standard in deciding whether the class satisfied the requirements of Rule 23, and it did not abuse its discretion in certifying the class. The Court therefore affirmed the district court’s class certification. View "Black, et al. v. Occidental Petroleum, et al." on Justia Law

Wolverine transports refined petroleum products in its 700-mile pipeline system. These pipelines run from refineries in the Chicago area to terminals and other pipelines in and around Indiana and Michigan. Because Wolverine transports refined petroleum, a hazardous liquid, the company is subject to safety standards, 49 U.S.C. 60101, and falls into the Pipeline and Hazardous Materials Safety Administration’s (PHMSA) regulatory orbit. A few years ago, PHMSA conducted a routine inspection of Wolverine’s records, procedures, and facilities and identified several issues. PHMSA sent Wolverine a Notice of Probable Violation, which acts as an informal charging document, and described nine potential violations of PHMSA’s regulations, including a dent with metal loss on the topside of a pipe segment, with respect to which Wolverine did not meet an “immediate repair” requirement. Wolverine missed a 180-day repair requirement for other deficiencies.The Sixth Circuit affirmed a $65,800 civil penalty. The court rejected Wolverine’s arguments that PHMSA’s action was arbitrary and violated its due process rights. Wolverine had adequate notice and, to the extent Wolverine believes another approach would better achieve PHMSA’s desired policy outcomes, its argument is one for resolution by PHMSA. View "Wolverine Pipe Line Co. v. United States Department of Transportation, Pipeline and Hazardous Materials Safety Administration" on Justia Law