Justia Energy, Oil & Gas Law Opinion Summaries

The issue presented for the Tenth Circuit's review centered on whether the Bureau of Land Management violated the National Historic Preservation Act (NHPA) and the National Environmental Policy Act (NEPA) in granting more than 300 applications for permits to drill horizontal, multi-stage hydraulically fracked wells in the Mancos Shale area of the San Juan Basin in northeastern New Mexico. Appellants, four environmental advocacy groups) sued the Secretary of the Department of the Interior, the Bureau of Land Management, and the Secretary of the BLM, alleging that the BLM authorized the drilling without fully considering its indirect and cumulative impacts on the environment or on historic properties. The district court denied Appellants a preliminary injunction, and the Tenth Circuit affirmed that decision in 2016. After merits briefing, the district court concluded that the BLM had not violated either NHPA or NEPA and dismissed Appellants’ claims with prejudice. Appellants appealed, and this time, the Tenth Circuit affirmed in part, reversed in part, and remanded. The Tenth Circuit determined that, as to five EAs, Appellants have demonstrated that the BLM needed to, but did not, consider the cumulative impacts of water resources associated with 3,960 reasonably foreseeable horizontal Mancos Shale wells. The BLM’s issuance of FONSIs and approval of APDs associated with these EAs was therefore arbitrary and capricious and violated NEPA. The matter was remanded for the district court to vacate the FONSIs and APDs associated with those five environmental analyses; the Tenth Circuit affirmed as to all other issues. View "Dine Citizens v. Bernhardt" on Justia Law

Defendant Chaparral Energy, L.L.C. (Chaparral) operated approximately 2,500 oil and gas wells in Oklahoma. Plaintiffs Naylor Farms, Inc. and Harrel’s, L.L.C. (collectively, Naylor Farms) had royalty interests in some of those wells. According to Naylor Farms, Chaparral systematically underpaid Naylor Farms and other similarly situated royalty owners by improperly deducting from their royalty payments certain gas-treatment costs that Naylor Farms contended Chaparral was required to shoulder under Oklahoma law. Naylor Farms brought a putative class-action lawsuit against Chaparral and moved to certify the class under Rule 23 of the Federal Rules of Civil Procedure. The district court granted Naylor Farms’ motion to certify, and Chaparral appealed the district court’s certification order. After review, the Tenth Circuit concluded Chaparral failed to demonstrate the district court’s decision to certify the class fell outside “the bounds of rationally available choices given the facts and law involved in the matter at hand.” View "Naylor Farms v. Chaparral Energy" on Justia Law

The Supreme Court affirmed the judgment of the court of appeals reversing the district court's judgment affirming the negative use determinations issued by the Commission on Environmental Quality as to Respondents' applications for tax exemptions for heat recovery steam generators (HRSGs), holding that Texas Tax Code 11.31 does not give the Commission and its Executive Director discretion to deny an ad valorem tax exemption for HRSGs.In Brazos Electric Power Cooperative v. Texas Commission on Environmental Quality, __ S.W.3d __ (Tex. 2019), also issued today, the Supreme Court held that the Legislature has deemed HRSGs to qualify at least in part as "pollution control property" entitled to an exemption. The Court further held in Brazos Electric that the Commission abused its discretion by issuing negative use determinations for two exemption applications involving HRSGs when the applications complied with relevant statutory requirements. In the instant case, the Commission issued negative use determinations for Petitioners' applications for tax exemptions for HRSGs. The court of appeals reversed. The Supreme Court affirmed, holding that the court of appeals correctly held that the Commission may not issue negative use determinations for HRSGs. View "Texas Commission on Environmental Quality v. Brazos Valley Energy, LLC" on Justia Law

The Supreme Court reversed the judgment of the court of appeals ruling that the Texas Commission on Environmental Quality does not have the discretion to deny an ad valorem tax exemption for heat recovery steam generators (HRSGs), devices the Legislature considers "pollution control property," holding that the Legislature did not exceed its constitutional authority in exempting pollution control property from taxation.Brazos Electric Power Cooperative, Inc. filed for an exemption seeking a positive use determination for the HRSG used in two of its facilities. The Commission's Executive Director issued negative use determinations for the applications on the grounds that HRSGs are not eligible for a positive use determination. The Commission eventually affirmed the determinations as to both facilities. The trial court affirmed. The court of appeals affirmed. The Supreme Court reversed, holding (1) under Texas Tax Code 11.31, property that qualifies as pollution control property, is entitled to a tax exemption, and HRSGs qualify, at least in part, as pollution control property; and (2) thus, assuming the applicant otherwise complies with the statute's requirements, the Executive Director may not issue a negative use determination for HRSGs. View "Brazos Electric Power Cooperative, Inc. v. Texas Commission on Environmental Quality" on Justia Law

The Supreme Court affirmed the district court's judgment granting summary judgment and dismissing Plaintiffs' claims challenging the decisions of a county board of supervisors approving a wind energy ordinance and a specific wind energy project, holding that Plaintiffs' claims were matters for the board of supervisors, and not the courts, to resolve.The board unanimously passed and approved a "wind energy conversion systems ordinance" and then granted conditional approval for the wind energy project at issue in this case. Plaintiffs then filed a petition for declaratory and injunctive relief and for a writ of certiorari against the board seeking a declaration that the ordinance was arbitrary, capricious, unreasonable, void and unenforceable and a writ determining that the approval of the project should be set aside as illegal, arbitrary and capricious, unreasonable and void. The district court granted summary judgment for the defendants. The Supreme Court affirmed, holding that the board did not act illegally, arbitrarily, or capriciously. View "Mathis v. Palo Alto County Board of Supervisors" on Justia Law

More than eight hundred appellants, who assert various contract and tort claims arising out of the Deepwater Horizon oil clean-up, are divided into two groups: the Lindsay Appellants and the D'Amico Appellants. Both groups of appellants appealed their dismissals with prejudice for failure to follow the district court's order requiring they file individual complaints.The Fifth Circuit held that the district court had authority to issue the order as a sensible means of managing multi-district litigation and to dismiss the parties' claims with prejudice for disobeying docket management orders. However, the court did not find the clear record of delay or contumacious conduct by the D'Amico Appellants required to justify a dismissal-with-prejudice sanction. In this case, the D'Amico Appellants had a flawed understanding of PTO 63 and showed an absence of willful conduct. Accordingly, the court reversed as to the D'Amico Appellants and affirmed as to the Lindsay Appellants. The court remanded for further proceedings. View "Graham v. BP Exploration & Production, Inc." on Justia Law

The Supreme Court affirmed the order of the circuit court affirming the determination of the Board of Equalization and Review that Petitioners Murray Energy Corporation and Consolidation Coal Company's coal interests were properly valued and assessed by Defendants, holding that the circuit court properly concluded that the method of valuing coal properties violated neither the statutory requirement of assessment at "true and actual value" nor the constitutional equality requirements of the West Virginia Constitution and the equal protection provisions of the United States and West Virginia Constitutions.Specifically, the Court held (1) the methodology of valuing Petitioners' coal properties for ad valorem tax valuation purposes, as set forth in West Virginia Code of State Rules 110-1I-1 et seq., does not violate the requirement set forth in W. Va. Code 11-6K-1(a) that natural resources property be assessed based upon its "true and actual value"; and (2) the valuation methodology contained in the Code of State Rules does not violate the equality provision of W. Va. Const. art. X, 1 or the equal protection provisions of the United States and West Virginia Constitutions. View "Murray Energy Corp. v. Steager" on Justia Law

Plaintiffs, small scale solar producers, filed suit alleging that CPUC's programs did not comply with the Public Utility Regulatory Policies Act (PURPA), because CPUC incorrectly defined the amount that PURPA requires utilities to pay qualifying facilities (QFs). The district court dismissed plaintiffs' claims for equitable damages and attorney fees, entering summary judgment for CPUC on the PURPA challenges.The panel held that the district court erred in not interpreting FERC's regulations to require state utility commissions to consider whether a Renewables Portfolio Standard changed the calculation of avoided cost. Accordingly, the panel reversed as to this issue. The panel affirmed in all other respects, holding that utilities did not violate PURPA in not compensating QFs for Renewable Energy Credits and the Net Energy Metering Program did not violate PURPA's interconnection requirement. The panel also affirmed the dismissal of equitable damages and attorney fees claims. View "Californians for Renewable Energy v. California Public Utilities Commission" on Justia Law

The Supreme Court affirmed the decision of the court of appeals affirming the judgment of the trial court finding that the holder of the executive right to lease a mineral estate violated its duty of utmost good faith and fair dealing by refusing to lease in contravention of the non-executive's known wishes, holding that legally sufficient evidence supported the trial court's finding.The executive right inherent in mineral ownership encompasses the right to execute oil and gas leases. The Supreme Court has previously held that the executive's duty owed to the non-executive mineral- or royalty-interest owners of utmost faith and fair dealing requires that the executive not engage in acts of self-dealing that unfairly diminish the value of the non-executive interest. Here, Plaintiff sued the executive, alleging that, as holder of the executive rights to certain mineral interests, the executive breached the duty of utmost good faith and fair dealing by refusing to enter a lease. The trial court rendered judgment for Plaintiffs. The court of appeals affirmed. The Supreme Court affirmed, holding that Plaintiffs met their burden to show that the executive engaged in acts of self-dealing that unfairly diminished the value of Plaintiffs' non-executive interest. View "Texas Outfitters Limited, LLC v. Nicholson" on Justia Law

After JME filed five claims for compensation with the Settlement Program, the Settlement Program determined that JME was a "failed business" under the meaning of the Settlement Agreement and calculated JME's compensation according to the Failed Business Economic Loss framework. The district court then granted discretionary review and agreed that JME was a failed business under the Settlement Agreement.Applying de novo review, the Fifth Circuit vacated and remanded, holding that the district court misinterpreted the Settlement Agreement's first and third definition of a "failed business" and erroneously concluded that the Settlement Program correctly classified JME as a failed business because JME ceased operations and wound down, or otherwise initiated or completed a liquidation of substantially all of its assets. View "Claimant ID 100081155 v. BP Exploration & Production, Inc." on Justia Law