Justia Energy, Oil & Gas Law Opinion Summaries

In this appeal from a judgment of the Seventh District Court of Appeals, the Supreme Court held that Ohio's Marketable Title Act (MTA), Ohio Rev. Code 5301.47 et seq., applied to an oil and gas interest that had been severed from its surface property.Senterra, Ltd., the owner of the surface property at issue in this case, sought to quiet title to the disputed one-quarter oil and gas interest in its favor, urging the Court to apply the deed-interpretation rule of equity set forth in Duhig v. Peavy-Moore Lumber Co., 144 S.W.2d 878 (Tex. 1940) (the Duhig rule). The heirs to the oil and gas interest argued, in response, that the Duhig rule was inapplicable and that the MTA applied and gave them marketable record title to the interest. The trial court granted summary judgment to Senterra. The Seventh District reversed, ruling that the Duhig rule was inapplicable and that the MTA applied. The Supreme Court affirmed, holding (1) the oil and gas interest retained by the heirs was not subject to the Duhig rule; and (2) the heirs' interest was preserved under the MTA. View "Senterra, Ltd. v. Winland" on Justia Law

The Supreme Court answered certified questions seeking to clarify whether, in payment of royalties under an oil and gas lease, the lessor may be required to bear a portion of the post-production costs incurred in rendering the oil and gas marketable.Specifically, the district court asked whether Estate of Tawyne v. Columbia Natural Resources, LLC, 633 S.E.2d 22 (W. Va. 2006) is still good law in West Virginia and then asked the Supreme Court to expound upon its holding in Tawney. The Supreme Court answered (1) Tawney is still good law; and (2) this Court defines to answer the reformulated question of what level of specificity Tawney requires of an oil and gas lease to permit the deduction of post-production costs from a lessor's royalty payments. View "SWN Production Co., LLC v. Kellam" on Justia Law

Vermilion Parish School Board (“VPSB”) filed suit in 2004, alleging oil and gas operations conducted pursuant to a 1935 mineral lease and a 1994 surface lease damaged Section 16 land. VPSB asserted causes of action for negligence, strict liability, unjust enrichment, trespass, breach of contract, and violations of Louisiana environmental laws. The Louisiana Supreme Court granted rehearing to reconsider its prior decision in Louisiana v. Louisiana Land and Exploration Co., 20-00685 (La. 6/30/21), _So.3d_. The case presented two main issues: (1) the proper interpretation of Act 312 relative to the award of damages for the evaluation or remediation of environmental damage; and (2) whether the strict liability tort claim prescribed. With the benefit of additional oral argument and briefing, the Court affirmed its original decree. View "Louisiana, et al. v. Louisiana Land & Exploration Co., et al." on Justia Law

In this climate-change case, the First Circuit once more affirmed the order of the federal district court allowing Rhode Island's motion to return to state court its state court complaint against oil and gas companies for damages caused by fossil fuels, holding that Rhode Island's complaint did not give rise to federal removal jurisdiction.Rhode Island originally brought this complaint in state court, alleging state-law causes of action for, inter alia, public nuisance. After the energy companies removed the case to federal district court Rhode Island moved for the case to be remanded to state court. The district court granted the motion and ordered the case remanded to state court. The First Circuit affirmed the remand order. On certiorari, the Supreme Court instructed that the First Circuit give further consideration in light of recent caselaw. The First Circuit received supplemental briefs and then affirmed once more the judge's remand order, holding that removal based on federal-question jurisdiction and on other jurisdictional and removal statutes was not proper. View "State of Rhode Island v. Shell Oil Products Co., LLC" on Justia Law

S Bar Ranch owned approximately 3000 acres of land in rural Elmore County, Idaho. S Bar purchased the land in 2015. There were very few structures on S Bar’s property, save for an airplane hangar that included a five-hundred square-foot apartment. S Bar’s address was listed in Sun Valley, Idaho, and its principal, Chris Stephens, used the property for recreational purposes. Cat Creek Energy, LLC, an Idaho company managed by John Faulkner, owned and managed more than 23,000 acres of land in Elmore County near Anderson Ranch reservoir. Faulkner, on behalf of his other companies, leased land to Cat Creek to develop the project at issue in this dispute. In late 2014 and early 2015, Cat Creek began the process of obtaining conditional use permits (“CUPs”) for a proposed alternative energy development (“the project”) in Elmore County. As initially proposed, the project had five components: a 50,000 acre-foot reservoir with hydroelectric turbines, up to 39 wind turbines, approximately 174,000 photovoltaic solar panels, electrical transmission lines, and an onsite power substation. Cat Creek sought to build the project on approximately 23,000 acres of land that it had leased near Anderson Ranch Reservoir. In 2019, the district court issued a Memorandum Decision and Order, affirming the Board’s decisions with respect to the CUPs. The district court found that S Bar only had standing to challenge the CUPs relating to wind turbines, electric transmission lines, and the on-site substation. The district court also reiterated its prior oral ruling that a 2017 CUP Order was a final agency action and that S Bar’s petition for judicial review of that order was untimely. With regard to the development agreement and a 2018 CUP Amendment, the district court concluded that the Board did not err in a manner specified by Idaho Code section 67-5279 and that S Bar had not shown that its substantial rights had been prejudiced. S Bar appealed, but finding no reversible error in the district court's judgment, the Idaho Supreme Court affirmed judgment in favor of Cat Creek. View "S Bar Ranch v. Elmore County" on Justia Law

In this oil and gas case, the Supreme Court reversed the judgment of the court of appeals reversing the trial court's summary judgment, holding that a fact issue remained on Plaintiffs' claim for breach of the lease and that Plaintiffs' argument was not barred by res judicata but that the court of appeals erred by reversing a take-nothing summary judgment as to Plaintiffs' tort and statutory claims.At issue was the meaning and application of an express covenant to protect against drainage that appeared in a lease addendum that expressly limited the location of wells that may trigger Defendant-Lessee's obligation to protect against drainage but did not directly address the location of wells that may cause drainage. Plaintiffs-Lessors argued that the covenant allowed for separate triggering and draining wells and that Defendant breached the covenant by failing to protect against drainage from a non-triggering well. In response, Defendant argued that it had a duty to protect only against drainage from the limited class of triggering wells. The Supreme Court held (1) the addendum was ambiguous because both interpretations of the covenant were reasonable; (2) the court of appeals improperly reversed the trial court's take-nothing summary judgment on Plaintiffs' tort and statutory claims; and (3) remand was required for further proceedings on Plaintiffs' claim for breach of the lease. View "Rosetta Resources Operating, LP v. Martin" on Justia Law

The Supreme Court affirmed the judgments of the court of appeals reversing the trial court's decisions in these two cases consolidated for appeal, holding that owners of the surface rights to land did not comply with the requirements of the Dormant Mineral Act, Ohio Rev. Code 5301.56, in seeking to have mineral interests in that land deemed abandoned.Plaintiffs filed complaints for declaratory judgment and seeking to quiet title, alleging that the surface owners had failed to exercise reasonable due diligence in attempting to locate holders of the mineral interests before commencing the abandonment process. The trial court granted summary judgment in favor of Defendants in both cases. The court of appeals reversed in both cases, ruling that Defendants' searches were unreasonable and that they had failed to comply with the relevant notice requirements. The Supreme Court affirmed, holding that Defendants failed to exercise reasonable diligence in these cases. View "Fonzi v. Brown" on Justia Law

The Supreme Court reversed the judgment of the court of appeals affirming the decision of the trial court dismissing this complaint brought by the Attorney General alleging that Defendants, including Rover Pipeline, LLC, had illegally discharged millions of gallons of drilling fluids into Ohio's waters, causing pollution and degrading water quality, holding that the lower courts erred.Rover sought a license to construct an interstate pipeline that cross several counts in Ohio. As required by 33 U.S.C. 1341(a)(1) - section 401 of the Clean Water Act - Rover applied for certification for the state that any discharge into the state's navigable waters would comply with federal law. The state later brought this action against Rover and other companies involved in building the pipeline. The Supreme Court reversed the dismissal of this lawsuit, holding (1) the state waived its ability to participate in the certification process when it did not respond to Rover's application within one year; but (2) the waiver applies only to issues that are related to the section 401 certification, and therefore, remand was required for a determination of whether any of the state's allegations address issues outside the contours of the section 401 certification. View "State ex rel. Yost v. Rover Pipeline, L.L.C." on Justia Law

In this premises-defect case, the Supreme Court denied the petition for writ of mandamus brought by Eagleridge Operating, LLC seeking relief from a trial court order striking its responsible-third-party designation under Chapter 33 of the Texas Civil Practice and Remedies Code, holding that Eagleridge failed to establish that it was entitled to the writ.In this action, Eagleridge argued that a former well site owner-operator bore continuing responsibility for injuries caused by a burst gas pipeline because the former owner acted as an independent contractor in constructing, installing, and maintaining the pipeline. The lower courts concluded that Occidental Chemical Corp. v. Jenkins, 478 S.W.3d 640 (Tex. 2016), was controlling and that the former owners' responsibility for premises defects did not survive the conveyance of its ownership interest. The Supreme Court agreed, holding that an agreement between tenants in common to allocate expenses, assign responsibilities, and compensate for disparate efforts in a joint endeavor does not create an exception to Occidental as to improvements each party would otherwise have been free to construct without the consent of the other. View "In re Eagleridge Operating, LLC" on Justia Law

Canyon Mine is located within the Kaibab National Forest, which has been withdrawn from new mining claims; the withdrawal did not extinguish “valid existing rights.” The Trust challenged the Forest Service’s determination that Energy Fuels holds a valid existing right to operate the uranium mine, alleging that in determining that there were “valuable mineral deposits,” 30 U.S.C. 22, the Service ignored sunk costs. The Ninth Circuit previously held that the Trust had Article III standing.The Ninth Circuit subsequently affirmed the summary judgment rejection of the claim. It was not arbitrary for the Service to ignore costs that have already been incurred and cannot be recovered. Applying Chevron analysis, the court held that the critical term in the Mining Act, “valuable mineral deposits,” was ambiguous. The Department of the Interior’s interpretation of the Act, in which sunk costs are not considered when determining whether a mine is profitable, was permissible and not manifestly contrary to the Act; it was consistent with the prudent person and marketability tests. It is a basic principle of economics that sunk costs should be ignored when making a rational decision about whether to make further expenditures. It was not arbitrary for the Forest Service to rely on the Department's interpretation. View "Grand Canyon Trust v. Provencio" on Justia Law