Justia Energy, Oil & Gas Law Opinion Summaries

Articles Posted in Supreme Court of Ohio
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In this dispute between a coal mining company and the owner of a natural gas pipeline over whether the pipeline owner may recover for damage caused to the pipeline as a result of mining the Supreme Court reversed the judgment of the court of appeals and reinstated the judgment of the trial court in favor of the mining company, holding that surface damage liability waivers in the relevant property deeds were valid and enforceable.The mining company held its interest in the coal underneath the lands through property deeds that severed the surface estate from the mineral interest. The deeds included provisions waiving liability for damage to the land's surface caused by mining activities. The trial court entered judgment for the mining company. On appeal, the pipeline owner asserted that the surface damage liability waivers were rendered invalid by an administrative agency's regulation requiring mining operators to pay for damage to surface structures from mining activities. The court of appeals reversed. The Supreme Court reversed, holding (1) the administrative agency lacked authority to enact a regulation requiring mining operators to pay damages irrespective of common law property rights to the extent those rights have not been limited by federal law; and (2) the surface damage liability waivers at issue remained valid and enforceable. View "Columbia Gas Transmission, LLC v. Ohio Valley Coal Co." on Justia Law

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The Supreme Court affirmed the judgment of the court of appeals affirming the trial court's decision granting summary judgment for John Chervenak, trustee of the Chervenak Family Trust, and declaring the trust the owner of the disputed mineral rights in this case, holding that the Chervenaks satisfied the notice requirements of the Ohio Dormant Mineral Act.Timothy Gerrity filed this action to quiet title and for a declaratory judgment, claiming that he was the rightful owner of severed mineral rights under the Chervenak property. At issue was whether the Chervenaks satisfied the notice requirements that the Ohio Dormant Mineral Act, Ohio Rev. Code 5301.56(E)(1), imposes as prerequisites to deeming a severed mineral interest abandoned and vested in the owner of the land subject to the mineral interest. The lower courts rendered judgment for Chervenak. The Supreme Court affirmed, holding (1) application of the Dormant Mineral Act is not limited to circumstances in which every holder of a severed mineral interest has been identified; and (2) a surface owner must use reasonable diligence to identify and locate holders of a severed mineral interest, but what constitutes reasonable diligence will vary based on the facts of each case. View "Gerrity v. Chervenak" on Justia Law

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The Supreme Court held that there is no irreconcilable conflict between the general provisions of the Ohio Marketable Title Act, Ohio Rev. Code 5301.47 et seq., as applied to severed mineral interests, and the Ohio Dormant Mineral Act, Ohio Rev. Code 5301.56.Appellants claimed they were the owners of a portion of a severed royalty interest in oil and gas underlying about sixty-six acres of land in Monroe County. Appellees filed this action for a declaratory judgment that the Marketable Title Act had extinguished the severed royalty interest and had vested that previously severed interest in Appellees. Appellants argued that the Dormant Mineral Act supersedes and controls over the original Marketable Title Act due to a conflict between the two acts. The trial court declared Appellants the owners of a 1/16 royalty interest, holding that the Dormant Mineral Act irreconcilably conflicts with the general provisions of the Marketable Title Act and that the more specific Dormant Mineral Act controls. The court of appeals reversed. The Supreme Court affirmed, holding that there is no irreconcilable conflict between the two acts, and therefore, they are applied as independent, alternative statutory mechanisms that may be used to reunite severed mineral interests with the surface property subject to those interests. View "West v. Bode" on Justia Law

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The Supreme Court reversed the order of the Public Utilities Commission of Ohio (PUCO) determining that Direct Energy Business, LLC had established that Duke Energy Ohio, Inc.'s failure to provide accurate readings of the generation usage of one of Direct's customers constituted inadequate service, holding that Duke Energy was not acting as a public utility when serving as Direct's meter-data-management agent.Direct purchased electric generation services from the operator of a wholesale power market and resold them to end-use customers through Duke Energy's distribution system. Duke Energy acted as Direct's meter-data-management agent, providing electric usage data about Direct's customers to the wholesale market operator, which then used the data to invoice Direct for its purchases. When Duke Energy failed to calculate usage data for one of Direct's large customers, Direct filed a complaint against Duke Energy with the PUCO. The PUCO ruled in favor of Direct. The Supreme Court reversed and remanded to the PUCO with instructions for it to dismiss Direct's complaint, holding (1) the PUCO lacked jurisdiction over this matter because PUCO's jurisdiction is confined to the supervision of "public utilities"; and (2) Duke Energy did not act as a public utility under the facts of this case. View "In re Complaint of Direct Energy Business, LLC v. Duke Energy Ohio, Inc." on Justia Law

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The Supreme Court affirmed the decision of the Board of Tax Appeals (BTA) affirming a tax assessment against Rockies Express Pipeline, LLC (Rockies), holding that Rockies' gross receipts for tax year 2015 from the transportation of natural gas within the state of Ohio were not excluded from taxation under Ohio Rev. Code 5727.33(B)(1) as "receipts derived wholly from interstate business" and that such taxation does not violate the Commerce Clause.Rockies is an interstate pipeline that transports natural gas for others. For tax year 2015, the Ohio Tax Commissioner assessed Rockies on transactions in which natural gas entered and exited Rockies' pipeline within Ohio. Rockies petitioned the tax commissioner for reassessment, arguing that its receipts derived wholly from interstate business and were thus eligible for exclusion under section 5727.33(B)(1). The tax commissioner upheld the assessment. The BTA affirmed. The Supreme Court affirmed, holding (1) Rockies did not meet its burden of showing that its receipts fall under the exclusion in section 5727.33(B)(1) as "receipts derived wholly from interstate business"; and (2) imposing the tax under these circumstances does not violate the Commerce Clause because Rockies has substantial nexus with Ohio based on its physical presence within the State. View "Rockies Express Pipeline, LLC v. McClain" on Justia Law

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The Supreme Court affirmed the order of the Public Utilities Commission of Ohio (PUCO) approving and modifying a previously approved electric-security plan of Ohio Power Company, holding that the Office of the Ohio Consumers' Counsel (OCC) did not satisfy its burden to demonstrate reversible error on the record.The OCC challenged three riders authorized by the PUCO's order, including the power purchase agreement rider, the smart city rider, and the renewable generation rider. The Supreme Court affirmed the PUCO's order, holding (1) this Court lacked jurisdiction to review the OCC's challenge to the power purchase agreement rider because the OCC did not include the challenge in an application for rehearing; (2) the OCC failed to show that the PUCO lacked statutory authority to approve the smart city rider; and (3) the OCC did not establish that approving the renewable general rider on a placeholder basis will harm or prejudice ratepayers. View "In re Application of Ohio Power Co." on Justia Law

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The Supreme Court reversed the judgment of the court of appeals affirming the trial court's judgment dismissing Plaintiffs' claims for quiet title and declaratory judgment based on their contention that an oil and gas lease had terminated by its terms due to lack of production, holding that the twenty-one-year limitations period in Ohio Rev. Code. 2305.04 applied.In their complaint Plaintiffs alleged that the well at issue did not produce any oil or gas from its inception until 1999 and that the well had been inoperative for enough time to terminate the lease. Defendants asserted a statute of limitations defense to Plaintiffs' claims. The trial court held that Plaintiffs had not presented any evidence to satisfy their burden of proving that the well was no longer profitable and that Plaintiffs' claims were subject to a fifteen-year statute of limitations. Plaintiffs appealed, arguing that the correct limitations period was the twenty-one-year period under Ohio Rev. Code 2305.04. The court of appeals rejected the argument and affirmed the trial court's summary judgment for Defendants. The Supreme Court reversed, holding that the twenty-one-year statute of limitations period applied and that evidence of lack of production prior to 1999 was not irrelevant. View "Browne v. Artex Oil Co." on Justia Law

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The Supreme Court affirmed the orders of the Ohio Power Siting Board approving the application of 6011 Greenwich Windpark, LLC to add three new wind-turbine models to the list of turbines suitable for Greenwich Windpark's proposed wind farm in Huron County, holding that the Board's approval of Greenwich Windpark's application did not require an amendment of its certificate.On appeal, Appellant argued that, in approving the proposed changes, the Board acted unlawfully and unreasonably by refusing to subject Greenwich Windpark's application to the enhanced minimum turbine-setback requirements applicable to any certificate "amendment" under the current versions of Ohio Rev. Code 4906.20 and 4906.201. The Supreme Court affirmed, holding that the Board adopted a reasonable and practical approach for determining when an amendment is necessary for purposes of the statutes and that, under the circumstances, the Board's decision was not unlawful or unreasonable. View "In re Application of 6011 Greenwich Windpark, LLC" on Justia Law

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The Supreme Court affirmed in part and reversed in part the order of the Public Utilities Commission of Ohio (PUCO) that modified and approved an electric-security plan (ESP) for the FirstEnergy Companies, holding that the Commission erred in modifying the ESP to add a distribution modernization rider (DMR) that was not part of the original application.The Commission concluded that the DMR, which allowed the FirstEnergy Companies to collect between $168 to $204 million in extra revenue per year, was valid under Ohio Rev. Code 4928.143(B)(2)(h) because the revenue it generated would purportedly serve as an incentive for the companies to modernize their distribution systems. The Supreme Court reversed the Commission's order as it related to the DMR and remanded with instructions to remove the DMR for the companies' ESP, holding that the DMR did not qualify as a proper incentive under section 4928.143(B)(2)(h) and that the conditions placed on the recovery of DMR revenue were not sufficient to protect ratepayers. View "In re Application of Ohio Edison Co." on Justia Law

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At issue was what type of reference within a chain of title is sufficient to preserve an earlier-created interest under Ohio’s Marketable Title Act, which generally allows a landowner who has an unbroken chain of title to land for a forty-year period to transfer title free of interests that existed prior to the beginning of the chain of title unless sufficient reference is made to interests within that chain of title.Landowners sought to extinguish an oil-and-gas royalty interest created in 1915. Landowners argued that a reference in a deed in their chain of title to the royalty interest, as well as the original holder of the interest, was not sufficient to preserve the interest because it did not include either the volume and page number of the record in which the interest was recorded or the date on which the interest was recorded. The court of appeals concluded that Landowners’ title remained subject to the royalty interest. The Supreme Court affirmed, holding that a reference that includes the type of interest created and to whom the interest was granted is sufficiently specific to preserve the interest in the record title. View "Blackstone v. Moore" on Justia Law