Justia Energy, Oil & Gas Law Opinion Summaries

Celeste Grynberg and her husband were co-owners of Grynberg Petroleum. Celeste filed a complaint for declaratory relief, breach of contract, unjust enrichment, and conversion against L&R Exploration Venture and numerous individuals and entities having an interest in the venture (collectively L&R), claiming that L&R owed her compensation for services Grynberg Petroleum provided to L&R and that she was entitled to payment of those amounts. The district court granted summary judgment for L&R and dismissed the complaint on the basis of res judicata, finding that Celeste was in privity with parties involved in prior litigation in Colorado and New York and her complaint involved the same subject matter and issues resolved in those proceedings. The Supreme Court affirmed, holding that Celeste was in privity with her husband, who was a party in the New York proceedings, as the assignee of his interest in L&R and with Grynberg Petroleum as the co-owner of the company and was bound by the prior rulings. View "Grynberg v. L&R Exploration Venture" on Justia Law

Kivalina, a native community located on an Alaskan barrier island, filed a lawsuit (Complaint) in a California district court against The AES Corporation, a Virginia-based energy company, and numerous other defendants for allegedly damaging the community by causing global warming through emission of greenhouse gases. Steadfast Insurance, which provided commercial general liability (CGL) to AES, provided AES a defense under a reservation of rights. Later AES filed a declaratory judgment action, claiming it did not owe AES a defense or indemnity coverage in the underlying suit. The circuit court granted Steadfast's motion for summary judgment, holding that the Complaint did not allege an "occurrence" as that term was defined in AES's contracts of insurance with Steadfast, and that Steadfast, therefore, did not owe AES a defense or liability coverage. The Supreme Court affirmed, holding that Kivalina did not allege that its property damage was the result of a fortuitous event or accident, but rather that its damages were the natural and probable consequence of AES's intentional actions, and such loss was not covered under the relevant CGL policies. View "AES Corp. v. Steadfast Ins. Co." on Justia Law

The issue on this appeal centers on who should bear responsibility for the cost of cleaning up petroleum contamination caused by releases from a gas station's underground storage tanks. The controversy in this appeal was between the State of Vermont, which runs the Vermont Petroleum Cleanup Fund (VPCF) and Stonington Insurance Co. (Stonington), which insured Bradford Oil, the owner of the underground storage tanks, for approximately a three-and-a-half-year period. The State appealed the trial court's judgment limiting Stonington's liability to a 4/27 share of past and future cleanup costs and awarded the State $45,172.05. On appeal, the State argued: (1) the Supreme Court's application of time-on-the-risk allocation in "Towns v. Northern Security Insurance Co." did not preclude joint and several liability under all standard occurrence-based policy language; (2) the circumstances here, including the reasonable expectations of the insured and the equity and policy considerations, support imposing joint and several liability on Stonington for all of the State's VPCF expenditures; and (3) even if time-on-the-risk allocation would otherwise be appropriate, Stonington was not entitled to such allocation because it failed to show sufficient facts to apply this allocation method in this case. Upon review, the Supreme Court concluded that "Towns" was the controlling case law here, and the Court was unconvinced by the State's reasonable expectations, equity, and policy arguments to distinguish the "Towns" decision. Accordingly, the Court affirmed the lower court's decision. View "Bradford Oil Co. v. Stonington Insurance Co." on Justia Law

This case arose when an ocean-going tanker collided with a barge that was being towed on the Mississippi River, which resulted in the barge splitting in half and spilling its cargo of oil into the river. Following the filing of numerous lawsuits, including personal injury claims by the crew members and class actions by fishermen, the primary insurer filed an interpleader action, depositing its policy limits with the court. At issue was the allocations of the interpleader funds as well as the district court's finding that the maritime insurance policy's liability limit included defense costs. The court affirmed the district court's decision that defense costs eroded policy limits but was persuaded that its orders allocating court-held funds among claimants were tentative and produced no appealable order. View "Gabarick, et al. v. Laurin Maritime (America) Inc., et al." on Justia Law

This case arose from an oil spill in the Mississippi River when an ocean-going tanker struck a barge that was being towed. Appellants (Excess Insurers) appealed the district court's decision requiring them to pay prejudgment interest on the funds deposited into the court's registry in an interpleader action. The Excess Insurers argued that the district court erred by: (1) finding that coverage under the excess policy was triggered by the primary insurer's filing of an interpleader complaint; (2) holding that a marine insurer that filed an interpleader action and deposited the policy limits with the court was obligated to pay legal interest in excess of the policy limits; and (3) applying the incorrect interest rate and awarding interest from the incorrect date. The court held that because the Excess Insurers' liability had not been triggered at the time the Excess Insurers filed their interpleader complaint, the district court erred in finding that they unreasonably delayed in depositing the policy limit into the court's registry and holding them liable for prejudgment interest. Therefore, the court reversed the judgment and did not reach the remaining issues. View "Gabarick, et al. v. Laurin Maritime (America), Inc., et al." on Justia Law

Plaintiff appealed the dismissal for lack of subject matter jurisdiction of its action against defendant, alleging tort, contract, and state statutory claims and seeking, among other remedies, a constructive trust and declaratory judgment over an oil and gas lease located on allotted land, wherein title to the land was held by the United States in trust for various Indian allottees. At issue was whether the district court had federal jurisdiction. The court held that 28 U.S.C. 1360(b), 28 U.S.C. 1331, and 25 U.S.C. 345 did not grant federal jurisdiction and therefore, plaintiff presented no basis for concluding that the action was within the "limited jurisdiction" of federal courts. Accordingly, the district court properly dismissed the suit based on lack of subject matter jurisdiction and the court did not need to reach any other issues raised by the parties, including exhaustion of tribal remedies. The court noted, however, that its holding did not preclude plaintiff from seeking relief in Blackfeet Tribal Court. View "K2 America Corp. v. Roland Oil & Gas. LLC" on Justia Law

Plaintiff filed a complaint against defendant, seeking indemnity and/or contribution based on the damage defendant allegedly caused through gross negligence in removing plaintiff's vessel from a coral reef. At issue was whether the district court properly denied defendant's motion to compel arbitration of the dispute under the Federal Arbitration Act (FAA), 9 U.S.C. 1 et seq., where defendant alleged that the district court erred in refusing to apply English arbitrability law. The court held that based on the Supreme Court's reasoning in First Options of Chicago, Inc. v. Kaplan, courts should apply non-federal arbitrability law only if there was clear and unmistakable evidence that the parties intended to apply such non-federal law. Because there was no clear and unmistakable evidence in this case, federal arbitrability law applied. Under federal arbitrability law, the court's decisions in Mediterranean Enterprises, Inc. v. Ssangyong Construction Co. and Tracer Research Corp. v. National Environmental Services, Co., mandated a narrow interpretation of a clause providing for arbitration of all disputes "arising under" an agreement. Under this narrow interpretation, the present dispute was not arbitrable. Therefore, the court affirmed the district court's judgment. View "Cape Flattery Ltd. v. Titan Maritime, LLC" on Justia Law

This case involved two related oil and gas mineral lease disputes that were jointly tried. At issue was whether limitations barred the Marshalls' (respondents and lessors) fraud claim against BP America Production Co., et al. (the lessee and operator), and whether Vaquillas Ranch Co., Ltd., et al. (lessors) lost title by adverse possession after Wagner Oil Co. (successors-in-interest) succeeded to BP's interests, took over the operations, and produced and paid Vaquillas royalties for nearly twenty years. The court held that because the Marshalls' injury was not inherently undiscoverable and BP's fraudulent representations about its good faith efforts to develop the well could have been discovered with reasonable diligence before limitations expired, neither the discovery rule nor fraudulent concealment extended limitations. Accordingly, the Marshalls' fraud claims against BP were time-barred. The court further held that by paying a clearly labeled royalty to Vaquillas, Wagner sufficiently asserted its intent to oust Vaquillas to acquire the lease by adverse possession. View "BP America Prod. Co., et al. v. Marshall, et al." on Justia Law

This case stemmed from a contract between the Indonesian government and the Exxon Mobil Corporation (Exxon), a United States corporation, and several of its wholly owned subsidiaries where Exxon operated a large natural gas extraction and processing facility in the Aceh province. Plaintiffs were fifteen Indonesian villagers. Eleven villagers filed a complaint in 2001 alleging that Exxon's security forces committed murder, torture, sexual assault, battery, and false imprisonment in violation of the Alien Tort Statute (ATS) and the Torture Victim Protection Act (TVPA), 28 U.S.C. 1350, and various common law torts. Four villagers alleged that in 2007, Exxon committed various common law torts. All plaintiffs alleged that Exxon took actions both in the United States and at its facility in the Aceh province that resulted in their injuries. Plaintiffs challenged the subsequent dismissal of their claims and Exxon filed a cross-appeal, inter alia, raising corporate immunity for the first time. The court concluded that aiding and abetting liability was well established under the ATS. The court further concluded that neither the text, history, nor purpose of the ATS supported corporate immunity for torts based on heinous conduct allegedly committed by its agents in violation of the law of nations. The court affirmed the dismissal of the TVPA claims in view of recent precedent of the court. The court concluded, however, that Exxon's objections to justiciability were unpersuasive and that the district court erred in ruling that plaintiffs lacked prudential standing to bring their non-federal tort claims and in the choice of law determination. The court finally concluded that Exxon's challenge to the diversity of parties in the complaint at issue was to be resolved initially by the district court. Therefore, the court affirmed the dismissal of plaintiffs' TVPA claims, reversed the dismissal of the ATS claims at issue, along with plaintiffs' non-federal tort claims, and remanded the cases to the district court.

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.