Justia Energy, Oil & Gas Law Opinion Summaries

Williams Alaska Petroleum owned the North Pole refinery until 2004. Williams knew that the then-unregulated chemical sulfolane was present in refinery property groundwater, but it did not know that the sulfolane had migrated off the refinery property via underground water flow. Flint Hills Resources Alaska bought the North Pole refinery from Williams in 2004 pursuant to a contract that contained detailed terms regarding environmental liabilities, indemnification, and damages caps. Almost immediately the Alaska Department of Environmental Conservation informed Flint Hills that sulfolane was to be a regulated chemical and that Flint Hills needed to find the source of the sulfolane in the groundwater. The Department contacted Flint Hills again in 2006. Flint Hills’s environmental contractor repeatedly warned Flint Hills that sulfolane could be leaving the refinery property and that more work was necessary to ascertain the extent of the problem. In 2008, Flint Hills drilled perimeter wells and discovered the sulfolane was migrating beyond its property and had contaminated drinking water in North Pole. A North Pole resident sued Flint Hills and Williams, and Flint Hills cross-claimed against Williams for indemnification. After extensive motion practice the superior court dismissed all of Flint Hills’s claims against Williams as time-barred. Flint Hills appealed. After review, the Supreme Court held that the superior court correctly applied the contract’s damages cap provision, but concluded that the court erred in finding Flint Hills’s contractual indemnification claims and part of its statutory claims were time-barred. The Court also affirmed the court’s dismissal of Flint Hills’s equitable claims. View "Flint Hills Resources Alaska, LLC v. Williams Alaska Petroleum, Inc." on Justia Law

Darrell Jent suffered serious injuries while working on an oil rig. The rig’s owner, Precision Drilling Company, L.P., paid him a settlement, then made a claim on its insurance. The insurance company, Lexington Insurance Company, denied the claim. Precision sued, contending that Lexington should have reimbursed the money it paid Jent. Lexington issued two insurance policies covering Precision for accidents exactly like Jent's. However, Lexington argued that under Wyoming state law, the policies were a nullity, so any coverage here was more illusory than real and that Precision was solely responsible. "There can be no doubt that Wyoming law usually prohibits those engaged in the oil and gas industry from contractually shifting to others liability for their own negligence." The district court agreed with Lexington and granted its motion for summary judgment. After review, the Tenth Circuit reversed, finding that the district court misinterpreted the statute that was grounds for Lexington's motion. The case was then remanded for further proceedings. View "Lexington Insurance v. Precision Drilling" on Justia Law

Appellants, property owners and holders of oil and gas leases, filed a class-action complaint against Appellee, the circuit court clerk, alleging that Appellee and two of her deputies falsely and fraudulently notarized oil and gas leases. On remand and following a hearing, the trial court granted summary judgment in favor of Appellee, concluding that Appellants had failed to show any damages as a result of Appellee’s purportedly unlawful act in recording the leases. The Supreme Court affirmed, holding that the grant of summary judgment was not in error, as none of the evidence relied upon by Appellants created a factual question as to whether they sustained damages as a result of the actions alleged in the complaint. View "Lipsey v. Cox" on Justia Law

Environmental contamination from Shell Western Exploration and Production, Inc. and Shell Oil Company's operations was discovered in Hobbs. Residents near the area brought a toxic tort action against Shell for personal injury damages, alleging the contaminants cause their autoimmune disorders. Plaintiffs challenged the district court's exclusion of the scientific evidence and expert testimony they offered in support of their theory, and they challenged the grant of partial summary judgment in favor of Shell. After review, the Supreme Court concluded the district court applied an incorrect standard of admissibility in its evidentiary rulings, and that plaintiffs' causation evidence should have been admitted. Because summary judgment to Shell's culpability for autoimmune disorders was granted because of this improper exclusion, the Supreme Court reversed and remanded for further proceedings. View "Acosta v. Shell W. Expl. & Prod., Inc." on Justia Law

A city pipeline buried beneath a road leaked odorless natural gas which infiltrated a nearby home, causing an explosion. Residents alleged that the natural gas lacked its distinctive rotten egg smell, and that the odorant that was designed to provide the warning odor was defective because it faded. After reviewing Plaintiffs’ products-liability and assorted negligence claims against the odorant manufacturer, odorant distributor, and transmission pipeline, the Mississippi Supreme Court concluded that these claims failed as a matter of law. The Court therefore affirmed the circuit court’s grant of summary judgment to the odorant manufacturer and transmission pipeline, and reversed the circuit court’s denial of the odorant distributor’s motion for summary judgment to render judgment in its favor. View "Elliott v. El Paso Corporation" on Justia Law

Plaintiff, a crew member aboard a supply vessel that was mud-roped to the Deepwater Horizon and was off-loading drilling mud on the night of the 2010 blowout, filed suit claiming that he sustained physical injuries when the explosion rocked the vessel and threw him against a bulkhead. On appeal, BP challenged the district court's judgment in favor of plaintiff where the district court, over BP's objection, enforced a putative settlement agreement against BP in plaintiff's favor. The court held that the parties formed a binding settlement agreement; the district court correctly excused plaintiff’s failure to sign the release document where BP's refusal to send plaintiff the release excused that failure; but the district court should have held an evidentiary hearing to determine whether plaintiff fraudulently induced BP into entering the settlement agreement. Therefore, the court affirmed the district court’s order in part, but vacated the judgment and remanded for further proceedings. View "Young v. BP" on Justia Law

A blowout of oil, natural gas, and mud occurred in 2010 during deepwater drilling operations at the Macondo well, located on the Outer Continental Shelf (“OCS”) in the waters of the Gulf of Mexico. At the time of the blowout, the Deepwater Horizon, a drilling rig chartered by BP, plc. from Transocean Ltd., was attached to the Macondo well. Eleven men died from the resulting explosions and fires on the Deepwater Horizon. Defendants Robert Kaluza and Donald Vidrine were “well site leaders,” the highest ranking BP employees working on the rig. Defendants were indicted by a federal grand jury in the Eastern District of Louisiana on 23 counts, including 11 counts of seaman’s manslaughter. The district court granted Defendants’ motion to dismiss for failure to charge an offense because neither defendant fell within the meaning of the criminal statute. The government appealed this determination. Because the Fifth Circuit agreed that neither defendant fell within the meaning of the phrase “[e]very . . . other person employed on any . . . vessel,” the Court affirmed. View "United States v. Kaluza" on Justia Law

PRM Partners was a leaseholder of lands which covered an oil well. PRM Partners designated Petroleum Resource Managements, Corp. (PRM) as the operator of the well. PRM contracted with Hot Oil Services, Inc. to perform the day-to-day operations of the well. In 2009, Hot Oil requested that Basic Energy Services, LP perform workover operations on the well. While Basic Energy was performing the workover operations, a fire erupted, which damaged various pieces of equipment, including Basic Energy’s workover rig. Basic Energy sued PRM Partners and PRM to recover the damage to its equipment. The district court granted summary judgment for PRM Partners and PRM, concluding that Hot Oil was an independent contractor and that neither PRM nor PRM Partners could be held liable for the acts of an independent contractor. The Supreme Court (1) reversed and remanded on the issue of whether PRM breached the contract and reversed and remanded on the claim that PRM acted negligently in hiring Hot Oil, holding that the district court erred in entering summary judgment on these issues, as PRM failed to carry the initial burden of a summary judgment movant; and (2) ordered that PRM Partners be dismissed from the appeal. View "Basic Energy Servs., LP v. Petroleum Res. Mgmt., Corp." on Justia Law

Bill Head, who owns and operates the Silver Spur Truck Stop in Pharr, Texas, hired Petroleum Solutions, Inc. to manufacture and install an underground fuel system. After the discovery that a major diesel-fuel release leak had occurred, Head sued Petroleum Solutions for its resulting damages. Petroleum Solutions filed a third-party petition against Titeflex, Inc., the alleged manufacturer of a component part incorporated into the fuel system, claiming indemnity and contribution. Titeflex filed a counterclaim against Petroleum Solutions for statutory indemnity. The trial court rendered judgment in favor of Head and in favor of Titeflex. The court of appeals affirmed. The Supreme Court (1) reversed as to Head’s claims against Petroleum Solutions, holding that the trial court abused its discretion by charging the jury with a spoliation instruction and striking Petroleum Solutions’ defenses, and the abuse of discretion was harmful; and (2) affirmed as to Titeflex’s indemnity claim, holding that Titeflex was entitled to statutory indemnity from Petroleum Solutions and that any error with respect to the indemnity claim was harmless. View "Petroleum Solutions, Inc. v. Head" on Justia Law

A.A. was electrocuted while playing on the farmland of David and Sherry Melton. Riley Berry, who worked for the Meltons, had parked a cotton picker under an allegedly sagging power line, which was owned by Entergy Mississippi, Inc. Ultimately, A.A. climbed onto the cotton picker, touched the power line, and was electrocuted. At the time of the accident, A.A.'s mother, Mary Bethanne Acey, was en route to Moon Lake, in Coahoma County with her son and Charles Graves. A 911 dispatcher called Graves to inform him of the accident. Graves immediately turned the car around to proceed to the Meltons' home. Acey then spoke with the dispatcher, who explained the gravity of the situation to Acey and informed her that A.A. had been "shocked." Emergency medical responders arrived shortly after Acey's arrival. A.A. suffered severe burns to both of her arms and her hip. A.A. subsequently was airlifted to Le Bonheur Children's Hospital in Memphis, Tennessee, and was later transferred to Shriners Hospitals for Children in Cincinnati, Ohio, which specializes in treating burn patients. Thereafter, Acey commenced legal action on behalf of A.A., and individually, against defendants Entergy, David and Sherry Melton, Melton Farms, Mary Mac, Inc., and Norfleet Investments, LP. Defendants settled all claims on behalf of A.A. Regarding Acey's individual bystander claims for emotional distress, Entergy moved for summary judgment and moved to strike the affidavits of Acey and Dr. William Hickerson. The trial court subsequently denied each motion. According to the trial court, based on the nature of A.A.'s injuries, this case "cries out for the expansion of" the factors provided by the California Supreme Court in "Dillon [v. Legg," 441 P. 2d 912, 920 (Cal. 1968)], adopted by the Mississippi Supreme Court in "Entex, Inc. v. McGuire,"(414 So. 2d 437 (Miss. 1982)). Thereafter, Entergy was granted interlocutory appeal. Because the Mississippi Court found that Entergy's motion for summary judgment should have been granted, the Court reversed and remanded the case for further proceedings. View "Entergy Mississippi, Inc. v. Acey" on Justia Law