Justia Energy, Oil & Gas Law Opinion Summaries

Mid-Continent Casualty Company brought a declaratory judgment action to settle an issue with its commercial commercial general liability (CGL) policy issued to Pennant Service Company. In 2001, True Oil Company, an owner and operator of oil and gas wells, entered into a master service contract (MSC) with Pennant for work on a well in Wyoming. The MSC included a provision whereby Pennant agreed to indemnify True Oil resulting from either Pennant or True Oil's negligence. In July 2001, Christopher Van Norman, a Pennant employee, was injured in an accident at True Oil's well. Van Norman sued True Oil in Wyoming state court for negligence. In accordance with the MSC's indemnity provision, counsel for True Oil wrote to Pennant requesting indemnification for its defense costs, attorney fees, and any award that Van Norman might recover against it. Mid-Continent refused to defend or indemnify True Oil based on Wyoming's Anti-Indemnity Statute, which invalidates agreements related to oil or gas wells that "indemnify the indemnitee against loss or liability for damages for . . . bodily injury to persons." In May 2002, True Oil brought a federal action against Mid-Continent for declaratory relief, breach of contract (CGL policy), and other related claims. In February 2005, the district court granted Mid-Continent summary judgment, determining that the MSC's indemnity provision, when invoked with respect to claims of the indemnitee's own negligence was unenforceable as a matter of public policy. The court held that Mid-Continent was not required to defend or indemnify True Oil in the underlying suit as it then existed because "where an indemnification provision in a MSC is void and unenforceable, the insurer never actually assumed any of the indemnitee's liabilities under the policy." The district court granted summary judgment to True Oil, determining Mid-Continent breached its duty to defend and indemnify True Oil. As damages, the court awarded True Oil the amount it paid to settle the underlying suit and the attorney fees and costs incurred in defending itself. Mid-Continent appealed the district court's judgment. Finding no reversible error, the Tenth Circuit affirmed. View "Mid-Continent v. True Oil Company" on Justia Law

Forester was awarded benefits under the Black Lung Benefits Act, 30 U.S.C. 901-944, as amended by the Patient Protection and Affordable Care Act, 124 Stat. 119, after the ALJ determined that Forester’s five years of private coal mine employment with Navistar’s predecessor, combined with his16 years of employment as a mine inspector with the U.S. Department of Labor’s Mine Safety and Health Administration , rendered him eligible for the rebuttable presumption that, having been employed for at least 15 years in underground coal mines, and having a totally disabling respiratory or pulmonary impairment, he was totally disabled due to pneumoconiosis, commonly known as black lung disease. The Benefits Review Board upheld the award. The Sixth Circuit vacated, holding that a federal mine inspector is not a “miner” for purposes of the BLBA, and remanding for determination of whether Forester is entitled to an award of BLBA benefits without the benefit of the 15-year presumption. View "Navistar, Inc. v. Forester" on Justia Law

Respondent, widow of an employee of Pacific Operators Offshore, sought benefits under the Longshore and Harbor Workers' Compensation Act (LHWCA), 33 U.S.C. 901 et seq., pursuant to the Outer Continental Shelf Lands Act (OCSLA), 43 U.S.C. 1333(b), which extended LHWCA coverage to injuries "occurring as the result of operations conducted on the [OCS]" for the purpose of extracting natural resources from the shelf. The ALJ dismissed her claim, reasoning that section 1333(b) did not cover the employee's fatal injury because his accident occurred on land, not on the OCS. The Labor Department's Benefits Review Board affirmed, but the Ninth Circuit reversed. The Court concluded that the Ninth Circuit's "substantial-nexus" test was more faithful to the text of section 1333(b). The Court understood the Ninth Circuit's test to require the injured employee to establish a significant causal link between the injury that he suffered and his employer's on-OCS operations conducted for the purpose of extracting natural resources from the OCS. View "Pacific Operators Offshore, LLP v. Valladolid" on Justia Law

Plaintiffs, several states, the city of New York, and three private land trusts, sued defendants, four private power companies and the federal Tennessee Valley Authority, alleging that defendants' emissions substantially and unreasonably interfered with public rights in violation of the federal common law of interstate nuisance, or in the alternative, of state tort law. Plaintiffs sought a decree setting carbon-dioxide emissions for each defendant at an initial cap to be further reduced annually. At issue was whether plaintiffs could maintain federal common law public nuisance claims against carbon-dioxide emitters. As a preliminary matter, the Court affirmed, by an equally divided Court, the Second Circuit's exercise of jurisdiction and proceeded to the merits. The Court held that the Clean Air Act, 42 U.S.C. 7401, and the Environmental Protection Act ("Act"), 42 U.S.C. 7411, action the Act authorized displaced any federal common-law right to seek abatement of carbon-dioxide emissions from fossil-fuel fired power plants. The Court also held that the availability vel non of a state lawsuit depended, inter alia, on the preemptive effect of the federal Act. Because none of the parties have briefed preemption or otherwise addressed the availability of a claim under state nuisance law, the matter was left for consideration on remand. Accordingly, the Court reversed and remanded for further proceedings. View "American Elec. Power Co., et al. v. Connecticut, et al." on Justia Law

This case stemmed from the Deepwater Horizon drilling platform oil spill. On appeal, BP challenged the district court's decision upholding the Claims Administrator's interpretation of the settlement agreement between it and the class of parties injured in the oil spill and the district court's dismissal of its action for breach of contract against the Administrator and denial of its motion for a preliminary injunction. The court concluded that the balance of equities favored a tailored stay where those who experienced actual injury traceable to loss from the Deepwater Horizon accident continued to receive recovery but those who did not receive their payments until this case was fully heard and decided through the judicial process weighed in favor of BP. Accordingly, the court reversed the denial of the preliminary injunction and instructed the district court to expeditiously craft a narrowly-tailored injunction that allowed the time necessary for deliberate reconsideration of significant issues on remand. The court affirmed the district court's dismissal of BP's suit against the Claim Administrator. View "In Re: Deepwater Horizon" on Justia Law

Westmoreland challenged an ALJ's decision, affirmed by the Benefits Review Board, to award black lung benefits to one of Westmoreland's former employees. The ALJ found that the evidence failed to establish that the employee suffered from clinical pneumoconiosis but did establish that the employee suffered from legal pneumoconiosis. Regarding this legal pneumoconiosis finding, the ALJ chose to credit one medical opinion over others. The ALJ also found that the employee was totally disabled as a result of his pneumoconiosis and thus awarded him benefits under the Black Lung Benefits Act, 30 U.S.C. 901 et seq. The court concluded that the ALJ's decision and order to award benefits was supported by substantial evidence, rational, and consistent with applicable law. Therefore, the Board did not err in affirming the ALJ's decision and order, and the court accordingly denied Westmoreland's petition for review. View "Westmoreland Coal Co. v. Cochran" on Justia Law

As the tanker Athos neared Paulsboro, New Jersey, an abandoned anchor in the Delaware River punctured its hull and caused 263,000 gallons of crude oil to spill. The owner of the tanker, Frescati, paid $180 million in cleanup costs and ship damages, but was reimbursed for nearly $88 million by the U.S. government under the Oil Pollution Act, 33 U.S.C. 2701. Frescati made claims against CARCO, which ordered the oil and owned the terminal where the Athos was to unload, claiming breach of the safe port/safe berth warranty made to an intermediary responsible for chartering the Athos and negligence and negligent misrepresentation. The government, as a statutory subrogee for the $88 million reimbursement reached a limited settlement agreement. The district court held that CARCO was not liable for the accident, but made no findings of fact and conclusions of law, required by FRCP 52(a)(1). The Third Circuit remanded for findings, but stated that the Athos and Frescati were implied beneficiaries of CARCO‘s safe berth warranty; that the warranty is an express assurance of safety; and that the named port exception to that warranty does not apply to hazards that are unknown and not reasonably foreseeable. The court noted that it is not clear that the warranty was actually breached, absent findings as to the Athos‘s actual draft or the clearance provided. The court further stated that CARCO could be liable in negligence for hazards outside the approach to CARCO‘s terminal. View "United States v. Citgo Asphalt Ref. Co." on Justia Law

Dotson died in August 1998. An administrative law judge determined that his wife was entitled to survivor’s benefits under the 2010 Black Lung Amendments, Pub. Law 111-148, 1556(a)–(c). The Sixth Circuit denied the company’s petition for review of the Benefits Review Board decision. The company filed a petition for rehearing, arguing that its case involved an additional issue: whether an award of benefits should commence the month the miner died. The Sixth Circuit denied the petition. The regulation says: “Benefits are payable to a survivor who is entitled beginning with the month of the miner’s death, or January 1, 1974, whichever is later.” 20 C.F.R. 725.503(c). This language was clear before Congress enacted the Amendments, and, by its terms, the widow is entitled to benefits beginning with the month of the miner’s death: August 1998. Rejecting an argument concerning retroactive application, the court stated that “imposition of liability for the effects of disabilities bred in the past is justified as a rational measure to spread the costs of the employees’ disabilities to those who have profited from the fruits of their labor—the operators and the coal consumers.” View "McCoy Elkhorn Coal Corp. v. Dotson" on Justia Law

In consolidated interlocutory appeals, Defendants-Appellants, natural gas producers with wells in south central Kansas, challenged a preliminary injunction enjoining them from further gas production from those wells. The district court entered the preliminary injunction after concluding there was a substantial likelihood that Plaintiff-Appellee Northern Natural Gas Co. would prevail on its state-law claim alleging that Defendants' natural gas production from these wells was an actionable nuisance because it was disrupting Northern's nearby underground storage of natural gas. The parties agreed that, to prevail on its nuisance claim, Northern needed to establish four things: 1) Defendants acted with the intent to interfere with Northern's use and enjoyment of the storage field; 2) there was some interference with the use and enjoyment of the Field of the kind Defendants intended; 3) that interference was substantial; and 4) the interference was of a such a nature, duration or amount as to constitute unreasonable interference with the use and enjoyment of the Field. Upon review, the Tenth Circuit affirmed, concluding that district court did not abuse its discretion in determining that there was a substantial likelihood that Northern could prove all four of those elements of its nuisance claim. View "Northern Natural Gas Company v. L.D. Drilling, Inc., et al" on Justia Law

This case involved the duties and standard of care of an oil and gas operator under an exculpatory clause in a joint operating agreement (JOA). Based on language in the exculpatory clause in the JOA, the trial court instructed the jury to find that to find a breach of the JOA the operator's conduct must have risen to the level of gross negligence or willful misconduct. The jury found the operator, Petitioner, breached his duties under the JOA to the working interest owners. The court of appeals affirmed, holding (1) the gross negligence and willful misconduct instruction should not have been included in the charge because the case centered around a breach of contract; but (2) there was legally sufficient evidence to support the jury's findings that Petitioner breached his duty as operator when measured against the elements of breach of contract. The Supreme Court reversed, holding (1) the exculpatory clause in the JOA established the standard for the claims against Petitioner; and (2) there was legally insufficient evidence that Petitioner was grossly negligent or acted with willful misconduct. View "Reeder v. Wood County Energy, LLC" on Justia Law