Justia Energy, Oil & Gas Law Opinion Summaries

The Supreme Court affirmed the order of the circuit court granting Plaintiffs' motion for class certification in this action alleging that Defendant, which leased with Plaintiffs to drill and sell hydrocarbons from the leased property, improperly suspended royalty payments, holding that the requirements of numerosity and superiority were met.The complaint alleged that the royalty payments were suspended in an effort by Defendant to recoup improper deductions. Plaintiffs moved for class certification, which the trial court granted. Defendant appealed, arguing that Plaintiffs failed to satisfy the numerosity and superiority requirements. The Supreme Court affirmed, holding that the trial court did not abuse its discretion in determining that the numerosity and superiority requirements were satisfied in this case. View "Stephens Production Co. v. Mainer" on Justia Law

The Supreme Court set aside orders from the Public Service Commission in two related cases, holding that the Commission did not have the authority to impose "interim" rates as an element of the energy balancing account procedures described in Utah Code 54-7-13.5.The Commission issued an order eliminating an "energy balancing account" (EBA) rate processes to PacifiCorp, an electric power provider, and later issued an order adopting the recommendation of the Division of Public Utilities that interim rates be reinstated in the EBA mechanism. After PacifiCorp submitted its 2018 EBA filing that proposed to recover EBA costs in the amount of $28 million on an interim basis the Commission issued an order imposing interim rates. Certain consumer groups challenged the Commission's interim rate orders. The Supreme Court set aside the orders, holding that the interim rates were imposed without a requirement that PacifiCorp prove by substantial evidence that the costs incorporated in the rates were prudently incurred or just and reasonable, which violates the controlling standard set forth in section 54-7-13.5(2)(e)(ii). View "Utah Office of Consumer Services v. Public Service Commission of Utah" on Justia Law

WestRock’s Virginia paper mill was fueled by steam from boilers that burned various fuels, including fossil fuels. In 2013, WestRock placed into service a cogeneration facility that burns open-loop biomass, material not originally intended for use as fuel. Steam from a new biomass-fired boiler and an old paper mill boiler are comingled and fed into a steam turbine generator. Electricity is generated after WestRock diverts some steam to the paper mill for use in the industrial paper process. In 2013, WestRock submitted an American Recovery and Reinvestment Act of 2009 Section 1603 application seeking a grant; it claimed that its qualifying property cost $286,191,571 and requested $85,857,471. The National Renewable Energy Laboratory determined that WestRock used only 49.1 percent of the steam energy to produce electricity and that fossil fuel still comprised about 0.22 percent of its boiler fuel. The Department of Treasury reduced the cost basis by 51.2 percent and awarded WestRock $38,881,758—30 percent of the cost of what Treasury deemed qualifying property. The Claims Court affirmed, finding that Section 1603 provides for reimbursement of only costs associated with electricity production at WestRock’s facility. The court afforded deference to nonbinding Treasury guidance, which provides for allocation of the cost basis between qualifying and non-qualifying activities. The Federal Circuit affirmed. Section 1603 provides for a grant in the amount of 30 percent of the basis or cost of any qualified property that is used as an integral part of a facility that uses open-loop biomass to produce electricity. View "WestRock Virginia Corp. v. United States" on Justia Law

In this case arising from an offer to purchase an assignment of a farmout that fell through the Supreme Court affirmed the judgment of the court of appeals concluding that Plaintiff could not prevail on its breach of contract claim or fraud claim as a matter of law, holding that, as a matter of law, both claims failed.The trial court granted judgment in favor of Plaintiff on its claims. The court of appeals reversed, holding (1) Plaintiff's breach of contract claim failed as a matter of law because the contract's consent-to-assignment provision unambiguously gave Defendant an unqualified right to refuse to consent, and (2) Plaintiff's fraud claim failed as a matter of law because Plaintiff could not justifiably rely on an oral promise to do something that was addressed in the written contract. The Supreme Court affirmed, holding (1) Defendant could not have breached the contract as a matter of law because the plain language of the contract unambiguously entitled Defendant to withhold its consent to a proposed assignment; and (2) where the written terms of the contract controlled Plaintiff could not justifiably rely on an oral statement. View "Barrow-Shaver Resources Co. v. Carrizo Oil & Gas, Inc." on Justia Law

The Supreme Court reversed the decision of the court of appeals reversing the judgment of the circuit court striking two insurance conditions from a conditional use permit (CUP) Dane County issued to Enbridge Energy Company as unenforceable under 2015 Wisconsin Act 55, holding that because Enbridge carried the requisite insurance, Act 55 rendered Dane County's extra insurance conditions unenforceable.The two conditions at issue required Enbridge to procure additional insurance prior to Enbridge expanding its pipeline pump station. Dane County approved the CUP with these insurance conditions. Thereafter, the Wisconsin Legislature passed Act 55, which prohibits counties from requiring an interstate pipeline operator to obtain additional insurance when the pipeline operating company carries comprehensive general liability insurance with coverage for "sudden and accidental" pollution liability. Dane County issued the CUP with the invalid insurance conditions. The circuit court struck the two conditions from the CUP as unenforceable under Act 55. The court of appeals reversed on the ground that Enbridge failed to show it carried the requisite coverage triggering the statutory prohibition barring the County from imposing additional insurance procurement requirements. The Supreme Court reversed, holding that Enbridge carried the requisite insurance, and therefore, Dane County's extra insurance conditions were unenforceable. View "Enbridge Energy Co. v. Dane County" on Justia Law

This appeal arose from a dispute over a Business Economic Loss claim stemming from the Deepwater Horizon Class Action Settlement Agreement. In Policy 495, the Claims Administrator established different methods for correcting unmatched financial statements. The first method created an Annual Variable Margin Methodology (AVMM), and the second method created Industry-Specific Methodologies (ISMs) for claimants working in construction, agriculture, education, and professional services.The Fifth Circuit upheld the AVMM but rejected the ISMs in In re Deepwater Horizon (Policy 495 Decision), 858 F.3d 298, 304 (5th Cir. 2017). The court held that the AVMM appropriately required the Claims Administrator to ensure that costs were registered in the same month as corresponding revenue, regardless of when those costs were incurred. However, the ISMs went too far by requiring smoothing profits in addition to matching revenues and expenses. Therefore, the court held that all claimants must be subject to the AVMM. On remand, the district court issued orders to implement the court's decision. However, the court held that the district court's orders were inconsistent with the court's mandate in the Policy 495 Decision. Accordingly, the court reversed and remanded for further proceedings. View "Lake Eugenie Land & Development, Inc. v. BP Exploration, Inc." on Justia Law

Steve Forster, Daniel Krebs, and Debra Krebs (collectively “Forster/Krebs”) appealed summary judgment that dismissed their claims against B&B Hot Oil Service, Inc. After review, the North Dakota Supreme Court concluded the district court correctly construed the language in the parties’ lease agreement, as a whole, to operated as a waiver of claims against each other for damages to the leased building and the contents therein. Furthermore, the Supreme Court concluded the provision in the parties’ lease waiving any claims against the other for any loss or damage to the leased premises or property therein was unenforceable to the extent it exempted B&B Hot Oil from responsibility for a willful or negligent violation of law. The Court thus affirmed in part, reversed in part, and remanded for further proceedings. View "James Vault & Precast Co., et al. v. B&B Hot Oil Service, Inc., et al." on Justia Law

Williams County appealed a the district court’s determination that its oil and gas leases with Twin City Technical LLC, Three Horns Energy, LLC, Prairie of the South LLC, and Irish Oil & Gas Inc. (“Lessees”), were void because the County failed to comply with the public advertising requirements for the lease of public land as provided in N.D.C.C. ch. 38-09. The Lessees sued the County in September 2015, about three and a half years after executing the leases. The North Dakota Supreme Court found record showed the Lessees received a June 2013 letter informing them of potential issues with the County’s mineral ownership. The Lessees contacted the County about the ownership issues by letter in April 2015. The County submitted an affidavit from its auditor stating bonus payments had already been spent and repayment would cause great hardship. Viewing the evidence and reasonable inferences drawn from the evidence in a light favorable to the County, the Supreme Court concluded there were genuine issues of material fact as to whether laches applied to bar the Lessees’ claim for repayment of the bonuses. The Supreme Court reversed that part of the judgment and remand for proceedings related to whether the Lessees’ delay in bringing their lawsuit was unreasonable, and whether the County was prejudiced by the delay. The Court affirmed as to all other issues. View "Twin City Technical LLC, et al. v. Williams County, et al." on Justia Law

Daniel and Debra Bearce (“the Bearces”) appealed a judgment entered in favor of Yellowstone Energy Development LLC (“Yellowstone”) after the parties’ cross motions for summary judgment. In June 2006, representatives of a business entity that would eventually become Yellowstone went to the Bearces' home seeking to purchase 170 acres of land they owned. Yellowstone successfully secured an exclusive option to purchase the land. In 2008, Yellowstone exercised its option to purchase the land and the parties entered into a contract for deed. In 2009, Yellowstone and the Bearces modified the contract for deed to alter some of the payment terms. Both the original contract for deed and the 2009 modified contract for deed included a term providing for the payment of a portion of the purchase price with “shares” of a contemplated ethanol plant. Yellowstone subsequently abandoned its plan to build an ethanol plant on the Bearces’ land. In July 2010, Yellowstone sent a letter to the Bearces advising them their $100,000 in “value” would be issued despite Yellowstone’s abandonment of the plan to build an ethanol plant. The letter stated ownership units had not yet been issued and explained the Bearces would receive their ownership interest “at the time shares are issued to all its members.” Shortly after receiving that letter, the Bearces executed and delivered a deed for the property to Yellowstone. In December 2011, and again in October 2012, the Yellowstone Board of Directors approved a multiplier of three units per $1 invested for individuals who had provided initial cash investment in Yellowstone. The Bearces’ interest in Yellowstone was not given the either 3:1 multiplier. The Bearces' objected, and Yellowstone continued to refuse to apply the multiplier to the Bearces' interest. When unsuccessful at the trial court, the Bearces appealed, challenging the district court’s exclusion of parol evidence to support their allegation of fraud in the inducement. The Bearces also challenged the district court’s conclusion the Bearces were not owed a fiduciary duty. After review, the North Dakota Supreme Court affirmed the district court’s judgment dismissing the Bearces’ claim for fraud and their claim for breach of contract. The Court reversed the district court’s dismissal of the Bearces’ claim for breach of a fiduciary duty and remanded for further proceedings. View "Bearce, et al. v. Yellowstone Energy Development, LLC" on Justia Law

The Supreme Court affirmed the orders of the Ohio Power Siting Board approving the application of 6011 Greenwich Windpark, LLC to add three new wind-turbine models to the list of turbines suitable for Greenwich Windpark's proposed wind farm in Huron County, holding that the Board's approval of Greenwich Windpark's application did not require an amendment of its certificate.On appeal, Appellant argued that, in approving the proposed changes, the Board acted unlawfully and unreasonably by refusing to subject Greenwich Windpark's application to the enhanced minimum turbine-setback requirements applicable to any certificate "amendment" under the current versions of Ohio Rev. Code 4906.20 and 4906.201. The Supreme Court affirmed, holding that the Board adopted a reasonable and practical approach for determining when an amendment is necessary for purposes of the statutes and that, under the circumstances, the Board's decision was not unlawful or unreasonable. View "In re Application of 6011 Greenwich Windpark, LLC" on Justia Law