Justia Energy, Oil & Gas Law Opinion Summaries

A group of affiliated energy companies brought a civil case in North Dakota against several environmental organizations and individuals, alleging a coordinated campaign—sometimes involving unlawful acts—targeted at their pipeline operations. After six years of litigation, a three-week jury trial resulted in a unanimous verdict for the energy companies, awarding over $130 million in compensatory and exemplary damages against one defendant, Greenpeace International, and over $666 million against all Greenpeace entities combined. The jury found Greenpeace International liable for conspiracy, defamation, defamation per se, and tortious interference, but not for property-related torts.While the North Dakota case was pending, Greenpeace International initiated legal proceedings in the Netherlands, seeking relief under Dutch and European anti-SLAPP (Strategic Litigation Against Public Participation) laws. The Dutch action alleged, among other things, that the North Dakota suit was a SLAPP case and sought to declare it “manifestly unfounded,” potentially undermining the North Dakota verdict. The energy companies sought an antisuit injunction in North Dakota District Court to prevent Greenpeace International from proceeding with the Dutch litigation. The district court denied the motion, reasoning that the Dutch and North Dakota cases involved different issues because anti-SLAPP actions are not recognized under North Dakota law, and thus did not meet the threshold for an antisuit injunction. The district court also found that the Dutch action was not vexatious, did not threaten North Dakota policy, and did not implicate comity concerns.On review, the Supreme Court of North Dakota determined that the district court abused its discretion by misapplying the legal framework for antisuit injunctions. The Supreme Court held that the issues in both cases were substantially similar, as the Dutch action, as pleaded, would require relitigating questions already decided by the North Dakota jury. The Court adopted a “conservative” approach to comity, weighing respect for foreign tribunals against the need to protect the integrity of state proceedings. The Supreme Court granted the petition for a supervisory writ and remanded the case, directing the district court to enter a narrowly tailored antisuit injunction preventing Greenpeace International from pursuing any Dutch claims that would require a finding that the North Dakota case lacked legal foundation, while permitting claims based on matters not adjudicated in North Dakota. View "Energy Transfer v. Gion" on Justia Law

A businessman from Kazakhstan alleged that he was wrongfully detained and psychologically coerced by the country’s National Security Committee into signing unfavorable business agreements, including waivers of legal claims and a forced transfer of valuable company shares. The business at issue, CAPEC, operated in Kazakhstan’s energy sector and held significant assets, some of which were allegedly misappropriated by fellow shareholders and transferred through U.S. financial institutions. The plaintiff claimed these actions harmed him economically, including the loss of potential U.S.-based legal claims.Following unsuccessful litigation in Kazakhstan, the plaintiff initiated suit in the United States District Court for the Eastern District of New York, seeking to invalidate the coerced agreements and recover damages under the Racketeer Influenced and Corrupt Organizations Act (RICO), the Alien Tort Statute, and other state and federal laws. The district court dismissed the complaint for lack of subject-matter jurisdiction, finding that the plaintiff, as a permanent resident alien, could not establish diversity jurisdiction against foreign defendants, that the alleged torts occurred outside the U.S., and that the plaintiff failed to allege a domestic injury required for civil RICO claims. The court denied leave to amend, determining that any amendment would be futile.The United States Court of Appeals for the Second Circuit reviewed the matter de novo, affirming the district court’s judgment. The Second Circuit held that claims against the National Security Committee were barred by the Foreign Sovereign Immunities Act, as its conduct was sovereign rather than commercial. For the individual defendants, the court found that the plaintiff failed to allege a domestic injury under RICO, as the harm and racketeering activity occurred primarily in Kazakhstan. The court further concluded that amendment of the complaint would have been futile. The judgment was affirmed. View "Yerkyn v. Yakovlevich" on Justia Law

In 2010, the Venezuelan government expropriated assets belonging to a Venezuelan subsidiary of a U.S.-based energy company. The subsidiary had provided drilling services to a state-owned Venezuelan energy company, but after a breakdown in their business relationship and significant unpaid invoices, Venezuelan authorities blockaded the subsidiary’s operations, issued public statements about nationalization, and ultimately transferred the subsidiary’s assets to the state-owned company, which began operating them. The U.S. parent company claimed that this expropriation rendered its ownership interest in the subsidiary worthless and deprived it of its rights to control the subsidiary’s assets.The U.S. parent company and its Venezuelan subsidiary filed suit in the United States District Court for the District of Columbia against Venezuela and its state-owned energy company, alleging unlawful expropriation. The district court denied the defendants’ motion to dismiss, and the U.S. Court of Appeals for the District of Columbia Circuit initially affirmed. However, the Supreme Court vacated that decision, clarifying the standard for the Foreign Sovereign Immunities Act (FSIA) expropriation exception. On remand, the D.C. Circuit found that only the U.S. parent company had a valid claim under international law, as the domestic-takings rule barred the subsidiary’s claim. The district court later dismissed Venezuela as a defendant, leaving the state-owned company as the sole defendant.On appeal, the United States Court of Appeals for the District of Columbia Circuit affirmed the district court’s denial of the state-owned company’s motion to dismiss. The court held that the FSIA’s expropriation exception applied because Venezuela indirectly expropriated the U.S. company’s property, the state-owned company owns and operates the expropriated assets, and it engages in commercial activity in the United States. The court also held that personal jurisdiction was proper and that the act-of-state doctrine, as limited by the Second Hickenlooper Amendment, did not bar the claim. View "Helmerich & Payne International Drilling Co. v. Petroleos De Venezuela, S.A." on Justia Law

Several companies incorporated in Cyprus and the Isle of Man, who were shareholders of OAO Yukos Oil Company, alleged that the Russian Federation unlawfully expropriated Yukos’s assets between 2003 and 2004. The shareholders initiated arbitration proceedings under the Energy Charter Treaty, which Russia had signed but not ratified, claiming that Russia’s actions violated the Treaty’s protections against expropriation. The arbitral tribunal in The Hague found in favor of the shareholders, awarding them over $50 billion in damages. Russia contested the tribunal’s jurisdiction, arguing that it was not bound to arbitrate under the Treaty because provisional application of the arbitration clause was inconsistent with Russian law, and that the shareholders were not proper investors under the Treaty.After the tribunal’s decision, Russia sought to set aside the awards in Dutch courts. The Dutch Supreme Court ultimately upheld the tribunal’s jurisdiction and the awards, finding that Russia was provisionally bound by the Treaty’s arbitration clause and that the shareholders qualified as investors. Meanwhile, the shareholders sought to enforce the arbitral awards in the United States District Court for the District of Columbia. Russia moved to dismiss, asserting sovereign immunity under the Foreign Sovereign Immunities Act (FSIA) and arguing that the arbitration exception did not apply because there was no valid arbitration agreement. The district court denied Russia’s motion, holding that it had jurisdiction under the FSIA’s arbitration exception, and deferred to the arbitral tribunal’s determination that an arbitration agreement existed.On appeal, the United States Court of Appeals for the District of Columbia Circuit held that the existence of an arbitration agreement is a jurisdictional fact under the FSIA that must be independently determined by the district court, rather than deferred to the arbitral tribunal. The court vacated the district court’s judgment and remanded for independent consideration of whether the FSIA’s arbitration exception applies, including whether the Dutch courts’ judgments should have preclusive effect. View "Hulley Enterprises Ltd. v. Russian Federation" on Justia Law

Exxon Mobil Corporation owned subsidiaries in Cuba that had various oil and gas assets. In 1960, the Cuban government expropriated these assets without compensating Exxon. In 1996, Congress enacted the Cuban Liberty and Democratic Solidarity Act, which allows U.S. nationals to sue those who traffic in property confiscated by the Cuban government. Exxon sued three state-owned defendants, alleging they trafficked in the confiscated property by participating in the oil industry and operating service stations.The United States District Court for the District of Columbia denied one defendant's motion to dismiss based on foreign sovereign immunity. The court held that the Cuban Liberty and Democratic Solidarity Act does not override the Foreign Sovereign Immunities Act (FSIA), and jurisdiction depends on an FSIA exception. The court found that the FSIA’s expropriation exception did not apply but that the commercial-activity exception did. The court allowed limited jurisdictional discovery for the other two defendants and later denied their motion for reconsideration.The United States Court of Appeals for the District of Columbia Circuit reviewed the case. The court agreed with the district court that the Cuban Liberty and Democratic Solidarity Act does not confer jurisdiction and that the FSIA’s expropriation exception is inapplicable. However, the court concluded that the district court needed to undertake additional analysis before determining that jurisdiction exists under the FSIA’s commercial-activity exception. The court vacated the district court’s decision and remanded the case for further analysis on the applicability of the FSIA’s commercial-activity exception. View "Exxon Mobil Corporation v. Corporacion CIMEX, S.A. (Cuba)" on Justia Law

The case involves an appeal by Marmen Inc., Marmen Énergie Inc., Marmen Energy Co., the Government of Québec, and the Government of Canada against a decision by the U.S. Department of Commerce. The Department of Commerce had imposed countervailing duties on imports of certain utility scale wind towers from Canada, arguing that the Canadian government had provided illegal subsidies to the producers and exporters of these towers.The case was initially reviewed by the United States Court of International Trade, which upheld the Department of Commerce's decision. The appellants then appealed to the United States Court of Appeals for the Federal Circuit.The appellants argued that the Department of Commerce had erred in its assessment of three government programs and its computation of the sales denominator used to calculate the subsidy rate. They contended that the subsidy rate should have been de minimis, meaning it was too trivial or minor to merit consideration.The Court of Appeals for the Federal Circuit affirmed the judgment of the U.S. Court of International Trade, ruling that the Department of Commerce's determination was supported by substantial evidence and was in accordance with the law. The court rejected the appellants' arguments, finding that the Department of Commerce had reasonably determined that the auditor's adjustment was unreliable, and that the three subsidy programs at issue did provide countervailable subsidies. View "GOVERNMENT OF QUEBEC v. US " on Justia Law

In 2016, Venezuela's state-owned oil company, Petróleos de Venezuela S.A. (PDVSA), offered a bond swap whereby its noteholders could exchange unsecured notes due in 2017 for new, secured notes due in 2020. PDVSA defaulted in 2019, and the National Assembly of Venezuela passed a resolution declaring the bond swap a "national public contract" requiring its approval under Article 150 of the Venezuelan Constitution. PDVSA, along with its subsidiaries PDVSA Petróleo S.A. and PDV Holding, Inc., initiated a lawsuit seeking a judgment declaring the 2020 Notes and their governing documents "invalid, illegal, null, and void ab initio, and thus unenforceable." The case was taken to the United States Court of Appeals for the Second Circuit, which certified three questions to the New York Court of Appeals.The New York Court of Appeals, in answering the first question, ruled that Venezuelan law governs the validity of the notes under Uniform Commercial Code § 8-110 (a) (1), which encompasses plaintiffs' arguments concerning whether the issuance of the notes was duly authorized by the Venezuelan National Assembly under the Venezuelan Constitution. However, New York law governs the transaction in all other respects, including the consequences if a security was "issued with a defect going to its validity." Given the court's answer to the first certified question, it did not answer the remaining questions. View "Petróleos de Venezuela S.A. v MUFG Union Bank, N.A." on Justia Law

Defendant-Appellant Petróleos de Venezuela, S.A. (“PDVSA”), an oil company wholly owned by the Bolivarian Republic of Venezuela, entered into two Note Agreements and a Credit Agreement with the predecessor-in-interest to now-Plaintiff-Appellee Red Tree Investments, LLC (“Red Tree”). PDVSA became delinquent on its obligations under the contracts. Red Tree’s predecessor-in-interest accelerated the outstanding debt. Then Red Tree initiated these actions in Supreme Court, New York County, which Defendants removed to district court. PDVSA claimed that any further payment under the Agreements was impossible and should therefore be excused. The district court granted summary judgment against PDVSA on the grounds that PDVSA had failed to provide sufficient evidence that payment was impossible or in the alternative, that any impediment to payment was not reasonably foreseeable. It therefore entered judgment in favor of Red Tree and imposed post-judgment interest. On appeal, PDVSA contends that the district court erred in concluding that no reasonable trier of fact could find that payment was impossible or that U.S. sanctions were unforeseeable. PDVSA further asserts that the district court incorrectly calculated post-judgment interest.   The Second Circuit affirmed. The court agreed with the district court that payment by PDVSA was not impossible. Further, the court concluded that the district court did not err in its calculation of post-judgment interest. The court explained that under the plain language of the Note and Credit Agreements, the outstanding principal and interest that accrued prejudgment—including both default and ordinary interest—are subject to default interest post-judgment. View "Red Tree Investments, LLC v. PDVSA, Petróleo" on Justia Law

In January 2017, Defendant-Appellant Petróleos de Venezuela, S.A. (“PDVSA”), an oil company wholly owned by the Bolivarian Republic of Venezuela, entered into a Note Agreement with then-Plaintiff-Appellee Dresser-Rand Company. PDVSA made two of the twelve payments due under the Note Agreement in April and July 2017 but failed to make any subsequent payments. In February 2019, Dresser-Rand declared PDVSA to be in default, accelerated the debt, and initiated this action in Supreme Court, New York County, which Defendants removed to the district court. PDVSA claimed that any further payment was impossible and should therefore be excused. The district court concluded that PDVSA had failed to prove that repayment was impossible. It therefore entered judgment in favor of Dresser-Rand. On appeal, PDVSA contends that the district court erred in concluding that payment was not impossible. PDVSA further asserts that the district court incorrectly calculated post-judgment interest.   The Second Circuit affirmed. The court agreed with the district court that payment by PDVSA was not impossible, and the court further concluded that PDVSA forfeited any arguments relating to post-judgment interest. The court explained that the evidence demonstrates that PDVSA never attempted payment to a different bank or in an alternative currency, nor did it investigate whether this manner of payment would have been truly impossible. Instead of the evidence shows, did nothing. PDVSA cannot benefit from the impossibility defense on speculation. View "Siemens Energy, Inc. v. PDVSA" on Justia Law

The United States seized oil cargo it claims belongs to the Islamic Republic of Iran. Appellants attached the oil in order to satisfy money judgments they hold against Iran. The district court upheld the United States' claim of sovereign immunity and quashed the attachments.
The DC Circuit affirmed the district court’s judgment. The court held (1) federal sovereign immunity prevents the attachment and garnishment of oil proceeds in a bank account of the United States and (2) the Terrorism Risk Insurance Act of 2002 (TRIA) does not waive that immunity. The court explained that the TRIA does not expressly mention the United States, its sovereign immunity, or its susceptibility to suit under the statute. Because the TRIA has nothing express to say about federal sovereign immunity, the notwithstanding clause cannot aid Appellants. Because sovereign immunity prevents Appellants from taking further steps to seize the proceeds from the United States’ sale of the contested oil, the court wrote it has no occasion to reach the alternative grounds for affirmance raised by the Government. View "Steven Greenbaum v. Islamic Republic of Iran" on Justia Law