Justia Energy, Oil & Gas Law Opinion Summaries

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

The Fifth Circuit affirmed the district court's denial of discretionary review in an appeal of claims submitted to BP's Economic and Property Damages Settlement Agreement. The court held that the reviews conducted by the Claims Administrator and Appeal Panel were consistent with the court's recent decision in Texas Gulf Seafood, BP Expl. & Prod., Inc. v. Claimant ID 100094497, 910 F.3d 797, 799 (5th Cir. 2018). In this case, the Appeal Panel did not defer to the claimant's "Management Fee" label as prohibited by Texas Gulf Seafood. Rather, the Appeal Panel conducted its own de novo review of the expense classification, considering the substantive nature of the Management Fee, and determined that the Management Fee was a fixed cost rather than a variable cost.The court also held that BP's arguments regarding the substantive accuracy of the "fixed" classification only raise the correctness of a fact-dependent decision in a single claimant's case. Therefore, the district court did not err in declining to grant discretionary review to determine whether the Claims Administrator and Appeal Panel accurately classified the Management Fee expense. View "BP Exploration & Production, Inc. v. Claimant ID 100166533" on Justia Law

The Fifth Circuit affirmed the district court's denial of discretionary review of the $2 million award claimant, an manufacturer of signs, received pursuant to the Economic and Property Damages Settlement from the Deepwater Horizon oil spill. The court held that BP has not established that claimant's causation attestation was implausible. The court also held that, even if applying a variable classification to the research and development expenses was substantively inaccurate, it simply raised the correctness of a discretionary administrative decision in the facts of a single claimant's case and thus did not warrant discretionary review. Finally, the court held that even if the claims administrator erred in omitting the adjustments at issue, the error did not raise a recurring issue on which the appeal panels were split or involved a pressing question of how the settlement agreement should be interpreted. View "BP Exploration & Production, Inc. v. Claimant ID 100261922" on Justia Law

This case stemmed from a contract dispute between two oil-drilling businesses, Eni and Transocean. The district court granted judgment in favor of Transocean and rejected Eni's claims surrounding Transocean's maintenance of its equipment, found that Eni had wrongfully repudiated the contract, and awarded damages to Transocean.The Fifth Circuit vacated the damages award and held that the district court erred by simply applying the Standby Rate because Eni never issued any instructions after repudiation. In this case, the district court should have attempted to determine, in the hypothetical nonbreach world, how many days the Deepwater Pathfinder would have spent at each applicable rate. Accordingly, the court remanded with instructions to recalculate the damages using the correct methodology. The court found Eni's remaining arguments lacking in merit and affirmed as to those claims. View "ENI US Operating Company, Inc. v. Transocean Offshore Deepwater Drilling, Inc." on Justia Law

BP argued that claimant was not entitled to the $65 million award it received pursuant to the Deepwater Horizon oil spill Settlement Agreement because it did not suffer a loss that was caused by the oil spill despite submitting a claim form certifying that it did. The Fifth Circuit held that the district court did not abuse its discretion in declining discretionary review because BP has not demonstrated that claimant did not suffer a post-spill loss, and claimant satisfied the causation formula set out in Exhibit 4B of the Settlement Agreement and formally attested to the fact that its losses were caused by the oil spill. The court reasoned that, while the evidence BP presented may indicate additional, market-related causes for claimant's loss, the existence of these alternative causes did not eliminate the possibility that the oil spill contributed to cause claimant's loss, nor did it preclude claimant from recovering under the Settlement Agreement. Accordingly, the court affirmed the judgment of the district court. View "BP Exploration & Production, Inc. v. Claimant ID 100141850" on Justia Law

NBA player David West negotiated a contract with the New Orleans Hornets before the Deepwater Horizon oil spill. West received the full $45 million amount specified in his contract, but still submitted an "Individual Economic Loss Claim" under the Deepwater Horizon Economic and Property Damages Settlement Agreement. The Claims Administrator for the Agreement awarded West almost $1.5 million in "lost" earnings.The Fifth Circuit reversed the district court's denial of discretionary review of the Settlement Appeal Panel's decision affirming the award and held that the district court abused its discretion in this case when the decision not reviewed actually contradicted or misapplied the Agreement. Under the circumstances, West expected to earn in the absence of the spill precisely what he did earn after it. Therefore, he did not suffer unexpected damages, and Exhibit 8A did not apply to him. The court also held that West did not suffer actual or unexpected "losses" or damages, because he earned exactly what he was entitled to receive under his contract. The court explained the fact that he received less money in 2010 than in 2009 did not mean he "lost" anything or was "damaged" in any way. Rather, it meant only that he agreed to a front-loaded contract, and he agreed to do so many years before the spill. View "BP Exploration & Production, Inc. v. Claimant ID 100281817" on Justia Law

The Supreme Court affirmed the judgment of the circuit court granting summary judgment against Petitioners in their action against Respondents based upon a coal lease agreement between the parties and granting summary judgment against Respondents’ counterclaim, holding that there was no error to the dismissal of the parties’ respective claims.In granting summary judgment against Petitioners, the circuit court concluded that Respondents had no obligation to diligently mine coal and did not have to make royalty payments based upon comparable sales by other mining companies. The circuit court also granted summary judgment against Respondents’ counterclaim seeking damages for Petitioners’ refusal to consent to an assignment or sublease of the coal lease and for alleged tortious interference with an asset agreement Respondents had with another company. The Supreme Court affirmed, holding that there was no error in the circuit court’s judgment. View "Bruce McDonald Holding Co. v. Addington Inc." on Justia Law

The First Circuit affirmed the decision of the district court ruling that the Town of Weymouth’s local ordinance, as applied to a project in which Algonquin Gas Transmission, LLC sought to build a natural gas compressor station in Weymouth, was preempted by the Federal Energy Regulatory Commission's (FERC) issuance of a certificate of public convenience and necessity (CPCN) authorizing construction of the Weymouth Compressor Station.Algonquin received a CPCN from FERC authorizing the project, but that certificate was conditioned upon the receipt of a consistency determination from the Commonwealth of Massachusetts pursuant to the Coastal Zone Management Act (CZMA). To complete its CZMA review the Commonwealth required Algonquin to furnish a permit from Massachusetts Department of Environmental Protection, which, in turn, refused to issue such a permit until the Town of Weymouth approved the project under its local ordinance. Wemouth denied Algonquin’s permit applications. Algonquin ultimately commenced this action against Weymouth arguing that the local ordinance, as it applied to the compressor station, was preempted under federal law. The district court granted summary judgment for Algonquin. The First Circuit affirmed, holding that application of Weymouth’s ordinance to the proposed compressor station was foreclosed by federal law under the theory of conflict preemption. View "Algonquin Gas Transmission v. Weymouth Conservation Commission" on Justia Law

The DC Circuit denied a petition for review of FERC's decision upholding charges assessed by the Southwest Power Pool. The court held that FERC's decision was not arbitrary and capricious and rejected Missouri River's argument that the tariff unambiguously confers carve-out eligibility on its transmission reservation under the 1977 Contract; rejected Missouri River's argument that FERC improperly changed course by relying on extrinsic evidence in this case; and rejected Missouri River's undue discrimination claim. The court also held that there was no reason to reject FERC's conclusion that the congestion and marginal loss charges paid for new services not provided for in the 1977 Contract. Finally, the court rejected Missouri River's argument, to the extent it was not forfeited, that the Pool should be equitably estopped from imposing congestion and marginal loss charges against Missouri River. View "Missouri River Energy Services v. FERC" on Justia Law

In an action arising from a condemnation proceeding, the Fourth Circuit affirmed the district court's partial grant of summary judgment to MVP based on its right to condemn certain temporary and permanent easements on the properties of several landowners, including WPPLP. In this case, MVP was authorized by FERC to exercise its rights of eminent domain to construct a natural gas pipeline. The court also affirmed the district court's grant of MVP's motion for a preliminary injunction allowing MVP immediate access to the easements described in MVP's complaint.The court held that the district court did not abuse its discretion in excluding evidence regarding potential damage to WPPLP and WPPLLC's coal as a result of the pipeline; the district court did not err by declining to join WPPLLC as an indispensable party; there was no genuine dispute of material fact as to MVP's claim to invoke eminent domain powers; and the district court did not abuse its discretion in finding that the Winter factors favored a grant of a preliminary injunction to MVP. View "Mountain Valley Pipeline, LLC v. Western Pocahontas Properties" on Justia Law