Justia Energy, Oil & Gas Law Opinion Summaries

A fire destroyed a hydroponic tomato facility belonging to a new business, Sunnyland Farms, Inc. The day before the fire, Sunnyland's electricity had been shut off by its local utility, the Central New Mexico Electrical Cooperative (CNMEC), for nonpayment. Sunnyland's water pumps were powered by electricity, and without power, Sunnyland's facility had no water. Sunnyland sued CNMEC, alleging both that CNMEC had wrongfully suspended service, and if its electrical service had been in place, firefighters and Sunnyland employees would have been able to stop the fire from consuming the facility. After a bench trial, the court found CNMEC liable for negligence and breach of contract. The trial court awarded damages, including lost profits, of over $21 million in contract and tort, but reduced the tort damages by 80% for Sunnyland's comparative fault. It also awarded $100,000 in punitive damages. The parties cross-appealed to the Court of Appeals, which reversed the contract judgment, vacated the punitive damages, held that the lost profit damages were not supported by sufficient evidence, affirmed the trial court's offset of damages based on CNMEC's purchase of a subrogation lien, and affirmed the trial court's rulings on pre- and post-judgment interest. Sunnyland appealed. Upon review, the Supreme Court affirmed the Court of Appeals regarding the contract judgment, punitive damages, and interest, and reversed on the lost profit damages and the offset. The Court also took the opportunity of this case to re-examine the standard for consequential contract damages in New Mexico. View "Sunnyland Farms, Inc. v. Central N.M. Electric Cooperative, Inc." on Justia Law

Plaintiffs sued Mobile Gas Service Corporation, pipeline operators and several other companies over the release of an odorant containing mercaptan. Mobile Gas, stated that, in fall 2011, Mobile Gas started receiving complaints about natural-gas leaks in the Eight Mile area; that the complaints centered around the facilities of Gulf South and Mobile Gas. plaintiffs, who resided in the Eight Mile area, filed their complaint, alleging nuisance, aggravated nuisance, negligence, and wantonness against the defendants arising from the release of mercaptan. A dispute arose over the issuance of a subpoena to the engineering firm that did the initial survey of the leak for Mobile Gas in response to an investigation by State Department of Environmental Management (ADEM). Mobile Gas objected to plaintiffs' attempt to subpoena the engineer; Mobile asserted that the engineer's report was privileged and therefore protected by the work-product privilege. The trial court denied Mobile Gas' objection. Mobile then filed its mandamus petition with the Supreme Court. Upon review, the Supreme Court concluded that Mobile Gas has established that the trial court exceeded its discretion when it disregarded the work-product privilege and entered an order compelling Mobile Gas to produce the documents included in the privilege log and when it denied Mobile Gas's motion for a protective order. Thus, Mobile Gas has established a clear legal right to a protective order regarding the production of the documents listed on the privilege log it submitted to the trial court. Accordingly, the Court granted Mobile Gas's petition for the writ of mandamus and directed the trial court to set aside its order compelling the production of documents included in the privilege log and to order those documents protected (including the engineer's report) from discovery. View "Parker et al. v. Mobile Gas Service Corporation et al." on Justia Law

Plaintiff Beckie Price sued Defendant High Pointe Oil Company, Inc. claiming, among other things, for damages for the mental anguish, emotional distress, and other psychological injuries sustained when High Pointe negligently pumped 400 gallons of oil into the basement of her house. The incident created a hazard such that Plaintiff's house had to be razed. High Pointe moved for summary judgment, aruging that noneconomic damages resulting from real property damage were not compensable. The circuit court denied part of High Pointe's motion, concluding that damages could be recovered in a negligence action. The jury awarded Plaintiff $100,000 for noneconomic damages; High Pointe moved for judgment notwithstanding the verdict. The circuit court denied High Pointe's motion, and the company subsequently appealed. Upon review, the Supreme Court found that no Michigan case has ever allowed a plaintiff to recover noneconomic damages resulting solely from the negligent destruction of property, either real or personal. "Rather, the common law of this state has long provided that the appropriate measure of damages in cases involving the negligent destruction of property is simply the cost of replacement or repair of the property." The Court reversed and remanded the case for entry of summary judgment in High Pointe's favor. View "Price v. High Pointe Oil Company, Inc." on Justia Law

Plaintiffs the State and the Vermilion Parish School Board filed a "Petition for Damages to School Lands" in 2004 seeking damages and remediation of a sixteenth section of property in Vermilion Parish owned by the State and managed by the School Board. The property was allegedly polluted by oil and gas exploration and production performed pursuant to an oil, gas and mineral lease originally granted on the property in 1935 and a surface lease entered into in 1994. The plaintiffs claimed damage to the land’s soil, surface waters and ground waters. Plaintiffs raised various causes of action including negligence, strict liability, unjust enrichment, trespass, breach of contract and violations of both the Mineral Code and the Civil Code. Several defendants were named in the original petition and in supplemental and amending petitions as companies which conducted, directed, controlled or participated in various oil and gas exploration and production activities as operators and/or working interest owners, and/or joint venturers in the mineral interest. At the time of this appeal, the remaining defendants were Union Oil Company of California; Union Exploration Partners; Carrollton Resources, L.L.C.; Chevron USA Inc.; and Chevron Midcontinent, L.P. In a motion for summary judgment, Chevron USA Inc. sought dismissal from suit, which was denied. Upon review of Chevron's argument that it should have been dismissed from the suit, the Supreme Court agreed with the court of appeal’s conclusion that there seemed to be a genuine issue of material fact as to Chevron USA Inc.’s successor status to Union Oil Company of California, and as such, should not have been dismissed from the case. Consequently, the Court affirmed the court of appeal’s opinion in this regard. View "Louisiana v. Louisiana Land & Exploration Company" on Justia Law