Justia Energy, Oil & Gas Law Opinion SummariesArticles Posted in Supreme Court of Ohio
State ex rel. Yost v. Rover Pipeline, L.L.C.
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
Cleveland Electric Illuminating Co. v. Cleveland
The Supreme Court affirmed the judgment of the court of appeal concluding that a municipality does not violate Ohio Const. art. XVIII, 6 by selling a surplus of electricity to customers outside the municipality's boundaries, holding that the court of appeals did not err.The City of Cleveland sold outside its boundaries approximately four percent of the electricity it sold inside its boundaries. Cleveland Electric Illuminating Company (CEI) brought this complaint arguing that the electricity the City sold extraterritorially as surplus violated this Court's decision in Toledo Edison Co. v. Bryan, 737 N.E.2d 529 (2000) and the Ohio Constitution. The trial court granted summary judgment for the City. The court of appeals reversed, determining (1) Article XVIII, Section 6 does not require a municipality to buy the precise amount of electricity required by its inhabitants at any given time, and (2) questions of material fact existed as to whether the City obtained surplus electricity for the sole purpose of selling it to a neighboring city. The Supreme Court affirmed, holding that while a municipality may not acquire excess capacity for the sole purpose of reselling it outside the municipality's territorial boundaries, the municipality is not required to purchase the exact amount of electricity necessary to satisfy the current needs of its territorial customers. View "Cleveland Electric Illuminating Co. v. Cleveland" on Justia Law
In re Application of Duke Energy Ohio, Inc.
The Supreme Court affirmed the order of the Ohio Power Siting Board granting Duke Energy Ohio, Inc. a certificate of environmental compatibility and public need to construct, operate, and maintain a natural-gas pipeline, holding that the Board's decision was not manifestly against the weight of the evidence and was not so clearly unsupported by the record as to show a mistake or willful disregard of duty.Specifically, the Supreme Court held (1) assuming without deciding that the Board misapplied its filing requirements, the error was harmless; (2) the Board did not err in determining that Duke's proposal met the conditions of Ohio Rev. Code 4906.10(A)(1); (3) the Board properly accounted for the interest of safety in evaluating Duke's proposal; (4) the Board did not err by not requiring Duke to evaluate the pipeline's impact against the City of Blue Ash's most recent comprehensive plan; (5) the Board did not err in evaluating the pipeline's estimated tax benefits; and (6) the Board did not deprive Blue Ash of due process of law. View "In re Application of Duke Energy Ohio, Inc." on Justia Law
In re Application of Suburban Natural Gas Co.
The Supreme Court reversed the decision of the Public Utilities Commission of Ohio (PUCO) allowing a gas company to charge its customers higher rates, holding that the PUCO erred by approving the rate increase.At issue was whether Suburban Natural Gas Company's customers must pay for a 4.9-mile extension of the company's pipeline. The PUCO determined that the pipeline extension met the "used-and-useful" test as of a specified date and approved the rate increase. See Ohio Rev. Code 4909.15(A)(1). The Supreme Court reversed, holding (1) the PUCO looked beyond whether the entire 4.9-mile extension was used and useful on the applicable date and considered whether it was a prudent investment because it might prove useful in the future; and (2) therefore, the PUCO erred in evaluating the rate increase. View "In re Application of Suburban Natural Gas Co." on Justia Law
Erickson v. Morrison
The Supreme Court reversed the judgment of the Fifth District Court of Appeals reversing the decision of the trial court declaring that Appellants owned certain mineral rights and quieting title to the rights in their favor, holding that the reservation of mineral rights in this case was preserved by Ohio Rev. Code 5301.49(A).At issue was whether a reference to a reservation of mineral rights in a surface landowner's root of title and in subsequently recorded title transactions was sufficiently specific to preserve the reservation of the mineral rights under Ohio's Marketable Title Act when the reference does not name the record owner of the rights. The Supreme Court held (1) in enacting section 5301.49(A), the Legislature did not require a reference to an interest predating the root of title to name the interest's owner in order to preserve the interest; and (2) in this case, notwithstanding the failure to name the owner of the reserved mineral rights, the reference was sufficient to preserve the rights from being extinguished under the Act. View "Erickson v. Morrison" on Justia Law
Columbia Gas Transmission, LLC v. Ohio Valley Coal Co.
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
Gerrity v. Chervenak
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
West v. Bode
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
In re Complaint of Direct Energy Business, LLC v. Duke Energy Ohio, Inc.
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
Rockies Express Pipeline, LLC v. McClain
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