Justia Energy, Oil & Gas Law Opinion Summaries

In 1969, Grantors and an oil company entered into a continuing oil and gas lease covering Grantors’ property. Less than seven months later, Grantors entered into a mineral deed with Grantee covering the same property. The mineral deed had a primary term of fifteen years. In 2012, Plaintiffs, the sole heirs of Grantors, filed a declaratory judgment seeking a declaration that the royalty interest held by Defendants, the sole heirs of Grantee, had terminated. The district court granted summary judgment for Defendants, concluding that because the mineral deed stated that it was subject to the terms of the continuing oil and gas lease and because Grantor was a party to both the lease and the mineral deed, the parties intended that they be read together. The Supreme Court reversed, holding (1) the “subject to” clause in the mineral deed did not incorporate the provisions of the lease; and (2) therefore, Defendants’ mineral interest did not continue past its fifteen-year term. View "Netahla v. Netahla" on Justia Law

Plaintiff filed this diversity action alleging that he owned fractional working interests in four Ritchie County mining partnerships, which owned six oil and gas wells, and demanding an accounting of the four partnerships. Defendant counterclaimed for the cumulative operating expenses attributable to Plaintiff’s asserted working interests in the partnerships. The district court awarded summary judgment to Defendant, concluding that Plaintiff’s assertion of interests in the four mining partnerships failed because he could not produce a writing that evidenced his co-ownership of the subject leases or wells in conformance with the Statute of Frauds. The Supreme Court of West Virginia accepted the Fourth Circuit’s certified question of law and answered (1) if a person contends he owns an interest in a common-law mining partnership, the Statute of Frauds requires the person to prove he is a partner of the mining partnership through a written conveyance; and (2) if the partnership is a general partnership and the partnership owns oil and gas leases, the Statute of Frauds does not require a person to produce a written instrument to prove he is a partner in the general partnership. Having adopted the West Virginia Supreme Court’s opinion answering the Court’s certified question of law, the Fourth Circuit vacated the judgment of the district court and remanded. View "Valentine v. Sugar Rock, Inc." on Justia Law

The Third Circuit Court of Appeals certified a question of Pennsylvania law to the Pennsylvania Supreme Court. In August 2007, Appellee Wayne Harrison entered into a lease with Appellant Cabot Oil & Gas Corporation, per which Cabot obtained the exclusive right to explore oil-and-gas resources on Harrison's property. In exchange, the company agreed to pay an initial bonus plus a one-eighth royalty on oil or gas successfully produced from the land. Approximately halfway through the primary lease term, Harrison and his wife commenced a civil action against Cabot in a federal district court, seeking a declaration that the lease was invalid. The Harrisons alleged the company had fraudulently induced Mr. Harrison to enter into the lease via an agent's representation that Mr. Harrison would never receive any more than $100 per acre as a threshold bonus payment from a gas producing company. The Harrisons learned of other landowner-lessors receiving higher payments. The Pennsylvania Court accepted certification from the Third Circuit to address whether the primary term of an oil-and-gas lease should have been equitably extended by the courts, where the lessor pursued an unsuccessful lawsuit challenging the validity of the lease. In its counterclaim, Cabot sought a declaratory judgment that, in the event the Harrisons' suit failed, the primary term of the lease would be equitably tolled during the period of time during which the suit was pending, and, concomitantly, the lease would be extended for an equivalent period of time beyond what was provided by its actual terms. The district court awarded summary judgment in Cabot's favor on the suit to invalidate the lease. The court, however, resolved the counterclaim in the Harrisons' favor, concluding that Pennsylvania law does not provide for equitable extensions of oil and gas leases under the circumstances. Cabot appealed, arguing that it would be deprived of the full benefit of the bargained-for terms of its contract with the Harrisons by their "meritless lease challenges." Cabot contended Pennsylvania law provided that a party repudiates a contract, and thus effectuates an essential breach, when he makes an unequivocal statement that he will not perform in accordance with his agreement. The Pennsylvania Supreme Court disagreed with Cabot's contention, holding that the Harrisons' lease challenge was not an anticipatory breach of the lease. "Our reluctance, in this respect, is bolstered by the Harrisons' observation that oil-and-gas-producing companies are free to proceed according to their own devices to negotiate express tolling provisions for inclusion in their leases. [. . .] Certainly, in light of the voluminous decisional law, such companies are on sufficient notice of the prospect for validity challenges to warrant their consideration of such protective measures. [ . . .] Our determination is only that, consistent with the prevailing substantive law of this Commonwealth, the mere pursuit of declaratory relief challenging the validity of a lease does not amount to such." View "Harrison v. Cabot Oil & Gas Corp." on Justia Law

In 1979, plaintiff Morristown Associates purchased commercial property located in Morristown. The property contained a strip-mall-style shopping center known as Morristown Plaza. Among the tenants was Plaza Cleaners, a dry cleaning business owned at the time by Robert Herring. Herring and his wife had entered into a lease with the property's previous owner, Morris Center Associates, in 1976. Due to construction, Herring was unable to occupy and operate Plaza Cleaners until 1978. At some point before moving in, Herring installed a steam boiler in a room at the rear of the leased space and an underground storage tank (UST) for fuel to operate the boiler. In 1985, Herring sold Plaza Cleaners to defendants Edward and Amy Hsi. The Hsis owned the business until 1998 when it was sold to current owner and third-party defendant, Byung Lee. In August 2003, a monitoring of a well installed near Plaza Cleaner's UST revealed fuel oil contamination. A subsequent investigation revealed that although the UST was intact, the fill and vent pipes were severely deteriorated, with large holes along a significant portion of their lengths. Plaintiff's experts concluded that those holes had developed as early as 1988 and, since that time, oil had been leaking from the pipes each time the tank was filled. Each of the named oil company defendants in this case allegedly supplied fuel oil to Plaza Cleaners at various times between 1988 and 2003. The issue in this appeal was whether the general six-year statute of limitations contained in N.J.S.A. 2A:14-1 applied to private claims for contribution made pursuant to the New Jersey Spill Compensation and Control Act, N.J.S.A. 58:10-23.11f(a)(2)(a). Based on the plain language of the Spill Act, reinforced by its legislative history, the New Jersey Supreme Court held that N.J.S.A. 2A:14-1 s six-year statute of limitations was not applicable to Spill Act contribution claims. The Court therefore rejected the contrary determination of the Appellate Division and reversed and remanded this case to the Appellate Division for its consideration of other issues raised on appeal that were unaddressed. View "Morristown Associates v. Grant Oil Co." on Justia Law

Sundown filed suit against defendants in state and federal court seeking a partition of land they co-owned, return of rental payments, and a right of way over Defendant Haller's property. In appeal No. 13-30294, Sundown challenges the district court's interpretation of the settlement agreement. In appeal No. 13-30721, Sundown challenges the district court's enforcement of the settlement. In appeal No. 13-30748, defendants challenged the district court's denial of their motion for contempt. The court held that the district court erred when it interpreted the settlement agreement to include those items not mentioned during the parties' oral recitation of the settlement agreement; the district court abused its discretion when it enforced the settlement agreement; and defendants failed to demonstrate that the district court clearly erred in its factual findings in regards to the denial of the motion for contempt. Accordingly, the court reversed in part and affirmed in part. View "Sundown Energy v. Haller" on Justia Law

A.A. was electrocuted while playing on the farmland of David and Sherry Melton. Riley Berry, who worked for the Meltons, had parked a cotton picker under an allegedly sagging power line, which was owned by Entergy Mississippi, Inc. Ultimately, A.A. climbed onto the cotton picker, touched the power line, and was electrocuted. At the time of the accident, A.A.'s mother, Mary Bethanne Acey, was en route to Moon Lake, in Coahoma County with her son and Charles Graves. A 911 dispatcher called Graves to inform him of the accident. Graves immediately turned the car around to proceed to the Meltons' home. Acey then spoke with the dispatcher, who explained the gravity of the situation to Acey and informed her that A.A. had been "shocked." Emergency medical responders arrived shortly after Acey's arrival. A.A. suffered severe burns to both of her arms and her hip. A.A. subsequently was airlifted to Le Bonheur Children's Hospital in Memphis, Tennessee, and was later transferred to Shriners Hospitals for Children in Cincinnati, Ohio, which specializes in treating burn patients. Thereafter, Acey commenced legal action on behalf of A.A., and individually, against defendants Entergy, David and Sherry Melton, Melton Farms, Mary Mac, Inc., and Norfleet Investments, LP. Defendants settled all claims on behalf of A.A. Regarding Acey's individual bystander claims for emotional distress, Entergy moved for summary judgment and moved to strike the affidavits of Acey and Dr. William Hickerson. The trial court subsequently denied each motion. According to the trial court, based on the nature of A.A.'s injuries, this case "cries out for the expansion of" the factors provided by the California Supreme Court in "Dillon [v. Legg," 441 P. 2d 912, 920 (Cal. 1968)], adopted by the Mississippi Supreme Court in "Entex, Inc. v. McGuire,"(414 So. 2d 437 (Miss. 1982)). Thereafter, Entergy was granted interlocutory appeal. Because the Mississippi Court found that Entergy's motion for summary judgment should have been granted, the Court reversed and remanded the case for further proceedings. View "Entergy Mississippi, Inc. v. Acey" on Justia Law

Columbia, an interstate natural gas company subject to the jurisdiction of the Federal Energy Regulatory Commission (FERC), seeks to replace a portion of a natural gas pipeline that runs in and around York County, Pennsylvania. Because the original location of the pipeline has become heavily populated, the replacement will not track the original line but will be outside the existing right of way. To obtain easements necessary to complete construction of the replacement, in 2013, Columbia filed Complaints in Condemnation against four Landowners in federal court. The district court held that Columbia did not have the right of eminent domain required to condemn the easements, reasoning that 18 C.F.R. 157.202(b)(2)(i), was ambiguous. The Third Circuit reversed, finding that the regulation clearly anticipates replacement outside the existing right of way and contains no adjacency requirement. The district court erroneously adopted its own definition of “replace” and concluded that a “notice” of “proposed rulemaking” for “Emergency Reconstruction of Interstate Natural Gas Facilities” promulgated by FERC after 9/11 was relevant.View "Columbia Gas Transmission, LLC v. 1.01 Acres in Penn Twp" on Justia Law

Rita Sue Rasnic, (f/k/a Johnson) appealed the grant of summary judgment quieting title to disputed mineral interests in McKenzie County to Norris and Beverly Hildre. Rasnic argues she was entitled to the disputed mineral interests because those mineral interests were subject to a mortgage held by her predecessor in interest, American State Bank. Upon review, the North Dakota Supreme Court concluded the plain language of the Hildres' 1988 mortgage applied only to mineral interests owned by them when the mortgage was executed and title to the disputed mineral interests, which was acquired by the Hildres after the mortgage was executed, did not inure to American State Bank as security for the Hildres' debt under N.D.C.C. section 35-03-01.2(4). Accordingly, the Court affirmed the judgment quieting title in the disputed mineral interests to the Hildres. View "Rasnic v. ConocoPhillips Co." on Justia Law

The Smiths appealed from the district court's order condemning portions of their property for the construction of a natural gas pipeline owned and operated by Alliance and granting Alliance immediate use and possession of the condemned land. The court concluded that it lacked jurisdiction to consider the Smiths' statutory challenges based on 18 C.F.R. 157.6(d) and North Dakota Administrative Code (NDAC) 69-06-08-01. The court also concluded that the Smiths received reasonable notice that Alliance was applying to FERC for the right to condemn their land; the court rejected the Smiths' allegation that Alliance violated several state procedural rules in bringing the condemnation action because Federal Rule of Civil Procedure 71.1 preempted all of these state procedures; Alliance satisfied any duty to negotiate with the Smiths in good faith pursuant to the Natural Gas Act, 15 U.S.C. 717f(h); and the district court did not abuse its discretion in holding that Alliance was entitled to immediate use and possession pursuant to Dataphase Sys., Inc. v. C L Sys., Inc. Accordingly, the court affirmed the judgment of the district court.View "Alliance Pipeline L.P. v. 4.360 Acres of Land, et al." on Justia Law

Plaintiff filed suit alleging that he was the owner of certain fractional work interests in four Ritchie County mining partnerships. The court certified the following question to the Supreme Court of Appeals of West Virginia: Whether the proponent of his own working interest in a mineral lease may prove his entitlement thereto and enforce his rights thereunder by demonstrating his inclusion within a mining partnership or partnership in mining, without resort to proof that the lease interest has been conveyed to him by deed or will or otherwise in strict conformance with the Statute of Frauds.View "Valentine v. Sugar Rock, Inc." on Justia Law