Justia Energy, Oil & Gas Law Opinion Summaries

Articles Posted in Montana Supreme Court
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The Supreme court affirmed the judgment of the district court granting summary judgment to NorthWestern Corporation, doing business as NorthWestern Energy (NWE), on Boulder Hydro LP’s (Boulder) complaint, holding that the district court’s decision was not in error or an abuse of discretion. At issue in this contract pricing dispute was how to move forward after the Dow Jones Mid-C price index ceased publication in September 2013 and could no longer serve as the price setting reporting term in the parties’ power purchase agreement (PPA). The district court concluded that the Dow should be replaced with a reasonable market rate reporting substitute and held Boulder to its fifteen-year, market rate PPA. The Supreme Court affirmed, holding that the district court correctly interpreted the PPA between NWE and Boulder, properly granted summary judgment for NWE, and did not err in finding that a reasonable price reporting index should replace the Dow Mid-C index under the parties’ PPA. View "Boulder Hydro Limited Partnership v. NorthWestern Corp." on Justia Law

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The Supreme Court affirmed the district court’s grant of summary judgment in favor of Hiland Crude, LLC in this declaratory action challenging the tax classification of Hiland Crude’s crude oil gathering pipelines in Montana. Hiland Crude owns and operates crude oil gathering and transmission systems in Montana. The Department of Revenue began centrally assessing Hiland Crude’s property in 2013 and classified all of its pipeline systems within the State as class nine property. Hiland Crude filed this suit asserting that gathering pipeline systems should be taxed as class eight property, regardless of whether the property is centrally assessed, because they are “flow lines and gathering lines” under the class eight statute. The district court agreed and granted summary judgment for Hiland Crude. The Supreme Court affirmed, holding that the district court properly granted summary judgment in favor of Hiland Crude. View "Hiland Crude, LLC v. State, Department of Revenue" on Justia Law

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Petitioner Atlantic Richfield Company (“ARCO”) petitioned the Montana Supreme Court seeking reversal of five district court orders. Relevant here, the underlying action concerned a claim for restoration damages brought by property owners in and around the town of Opportunity, Montana. As part of ARCO’s cleanup responsibility relating to the Anaconda Smelter, EPA required ARCO to remediate residential yards within the Smelter Site harboring levels of arsenic exceeding 250 parts per million in soil, and to remediate all wells used for drinking water with levels of arsenic in excess of ten parts per billion. The Property Owners, a group of ninety-eight landowners located within the bounds of the Smelter Site, sought the opinion of outside experts to determine what actions would be necessary to fully restore their properties to pre-contamination levels. The experts recommended the Property Owners remove the top two feet of soil from affected properties and install permeable walls to remove arsenic from the groundwater. Both remedies required restoration work in excess of what the EPA required of ARCO in its selected remedy. The Property Owners sued, seeking restoration damages. ARCO conceded that the Property Owners could move forward on their first four claims, but contended that the claim for restoration damages was preempted by the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (“CERCLA”). The Supreme Court agreed with the district court that the Property Owners’ claims for restoration damages was barred by CERCLA. View "Atlantic Richfield v. 2nd Jud. Dist" on Justia Law

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Carbon County Resource Council and Northern Plains Resources Council (collectively, Resource Councils) challenged the Montana Board of Oil and Gas Conservation’s (the Board) approval of well stimulation activities at an exploratory gas well in Carbon County. Specifically, Resource Councils claimed that the Board’s permitting process violated their constitutional right to meaningfully participate in government decisions. The district court concluded that Resource Councils’ constitutional challenge was not ripe for judgment and granted summary judgment in favor of the Board. The Supreme Court reversed, holding (1) Resource Councils’ claims are ripe for judicial review; but (2) the Board did not violate Resource Councils’ right to participate in its consideration of the permit at issue in this case. View "Carbon County Res. Council v. Bd. of Oil & Gas Conservation" on Justia Law

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Appellants (collectively, the Teisingers) claimed a 3/5ths royalty interest in oil, gas, and minerals located on several sections of land in Richland County. The Teisingers’ assert that their 3/5ths royalty interest was reserved in a 1953 warranty deed. The district court denied the Teisingers’ claim and quieted title to the royalty interest in favor of Appellees (collectively, the Sundheims). The Supreme Court reversed, holding that the district court (1) improperly admitted testimony from an English professor interpreting the language of the warranty deed’s royalty interest reservation; (2) erred by resolving the ambiguity in the warranty deed in favor of the Sundheims; and (3) erred in applying the doctrine of laches to bar the Teisingers’ claim to the 3/5ths royalty interest. Remanded for entry of judgment quieting title to the 3/5ths royalty interest reserved in the warranty deed in favor of the Teisingers. View "Wicklund v. Sundheim" on Justia Law

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The dispute in this case centered on the ownership of subsurface mineral rights to coal-rich land located in Musselshell County. Plaintiffs filed this action against Musselshell County to quiet title to the property. The district court granted summary judgment in favor of the County and awarded costs but not attorney fees. Plaintiffs appealed, and the County cross-appealed. The Supreme Court affirmed, holding (1) the district court did not err in concluding that the pertinent statute of limitations barred Plaintiffs’ quiet title action; and (2) the district court did not abuse its discretion in denying the County its attorney fees. View "Bergum v. Musselshell County" on Justia Law

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Morgen Farm and Ranch, Inc., which owned surface rights to certain property, leased oil and gas rights on a portion of its property to a corporation. The corporation later assigned its interest in the lease to Interstate Explorations, LLC, which drilled and completed a well on the Morgen property. Interstate later filed suit against Morgen requesting a declaration that Morgen had wrongfully denied an easement necessary for installing a power line to operate the well. Morgen counterclaimed that Interstate had damaged the surface of the property by spilling hydrocarbons. Interstate moved to dismiss Morgen’s counterclaims for lack of subject matter jurisdiction, asserting that Morgen had failed to exhaust its administrative remedies before initiating legal action for damages. The district court denied Interstate’s motion to dismiss, concluding that a surface owner is not required to exhaust an administrative remedy under the Surface Damage Act before litigating a damage claim in the courts. The Supreme Court affirmed, holding that the district court correctly denied Interstate’s motion to dismiss Morgen’s counterclaims. View "Interstate Explorations, LLC v. Morgen Farm & Ranch, Inc." on Justia Law

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At issue in this case was the Montana Board of Oil & Gas Conservation's (MBOGC) issuance of twenty-three gas well permits to Fidelity Exploration and Production Company in the area known as the Cedar Creek Anticline (CCA). The Montana Wildlife Federation and National Wildlife Federation (collectively, Federations) challenged the issuance of the permits. The district court granted summary judgment in favor of Appellees, MBOGC, Fidelity, and Montana Petroleum Association, holding that the Federations failed to rebut the presumption of validity in the MBOGC's decision. The Supreme Court affirmed, holding that the district court did not err in (1) conducting its review under Mont. Code Ann. 82-11-144 and in considering evidence outside the administrative record; (2) determining that the environmental assessments prepared by MBOGC for gas development in the CCA were adequate under the Montana Environmental Policy Act; and (3) ruling that MBOGC did not have to prepare a programmatic environmental impact statement for oil and gas development in the CCA. View "Mont. Wildlife Fed'n v. Bd. of Oil & Gas Conservation" on Justia Law

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NorthWestern Energy proposed constructing an electric transmission line from Montana to Idaho and submitted its application for a certificate from the Montana Department of Environmental Quality (DEQ). While preparing a draft of the Environmental Impact Statement (EIS), Jefferson County informed DEQ that it expected DEQ to consult with the County in determining the route. Jefferson County subsequently filed a petition for writ of mandamus and injunction relief against DEQ, (1) seeking an order requiring DEQ to comply with the Montana Environmental Policy Act and other environmental legislation, and (2) requesting DEQ be enjoined from releasing a draft EIS. NorthWestern subsequently intervened. The district court ruled in favor of Jefferson County after determining that DEQ had not satisfied its duty to consult with Jefferson County under Mont. Code Ann. 75-1-201(1)(c) and enjoined DEP from releasing the Draft EIS until it had done so. The Supreme Court reversed, holding (1) at this stage in the process, DEQ had not violated a clear legal duty to consult with the County prior to issuing its draft EIS; and (2) because the County had adequate legal remedies once DEQ rendered a final agency action, the County was not entitled to mandamus or injunctive relief. View "Jefferson County v. Dep't of Envtl. Quality" on Justia Law

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Appellant, Summer Night Oil Company, and Appellees, individuals and oil companies, resolved a dispute over the operation of two oil wells through a settlement agreement. Appellant filed a motion to compel performance of the agreement after the parties failed to perform timely their obligations under the agreement. Specifically, Appellant asked the district court to compel Appellees to deliver all title clearance documents under the agreement. Appellees responded with a request to compel Appellant to pay a fine due to the EPA and a payment owed to Appellees under the agreement. Both parties sought attorney fees. The district court enforced what it determined to be the plain meaning of the agreement's terms, and (1) ordered Appellant to pay the fine owed to the EPA, (2) ordered Appellant to pay Appellee the amount owed it under the agreement, (3) ordered Appellees to deliver all title clearance documents to an escrow agent, and (4) declined to award attorney fees to either party. The Supreme Court affirmed, holding (1) the district court properly denied Appellant's motion to compel performance of the agreement according to Appellant's terms, and (2) the district court correctly denied Appellant's motion to alter or amend its judgment. View "Summer Night Oil Co. v. Munoz " on Justia Law