Justia Energy, Oil & Gas Law Opinion SummariesArticles Posted in U.S. 10th Circuit Court of Appeals
Northern Natural Gas Company v. L.D. Drilling, Inc., et al
In consolidated interlocutory appeals, Defendants-Appellants, natural gas producers with wells in south central Kansas, challenged a preliminary injunction enjoining them from further gas production from those wells. The district court entered the preliminary injunction after concluding there was a substantial likelihood that Plaintiff-Appellee Northern Natural Gas Co. would prevail on its state-law claim alleging that Defendants' natural gas production from these wells was an actionable nuisance because it was disrupting Northern's nearby underground storage of natural gas. The parties agreed that, to prevail on its nuisance claim, Northern needed to establish four things: 1) Defendants acted with the intent to interfere with Northern's use and enjoyment of the storage field; 2) there was some interference with the use and enjoyment of the Field of the kind Defendants intended; 3) that interference was substantial; and 4) the interference was of a such a nature, duration or amount as to constitute unreasonable interference with the use and enjoyment of the Field. Upon review, the Tenth Circuit affirmed, concluding that district court did not abuse its discretion in determining that there was a substantial likelihood that Northern could prove all four of those elements of its nuisance claim. View "Northern Natural Gas Company v. L.D. Drilling, Inc., et al" on Justia Law
Kimzey, et al v. Flamingo Seismic
Plaintiffs brought a trespass action for damages to their land caused by Defendant's seismic exploration activities. Plaintiffs originally filed their action in Oklahoma state court, but Defendant removed it to federal district court based on diversity of citizenship. Defendant moved for summary judgment, arguing that it had permission to enter the property and conduct seismic testing from owners of the mineral rights and/or oil and gas leasehold rights, which lie under the surface estate of Plaintiffs' properties. The district court agreed and granted summary judgment for Defendant. Defendant then sought an award of attorney's fees pursuant to title 12, section 940(A) of the Oklahoma Code. The district court awarded Defendant $71,560 in attorney's fees as the prevailing party. Plaintiffs appealed both the summary judgment and the award of attorney's fees. Upon review, and "in the face of […] clear Oklahoma precedent," the Tenth Circuit concluded there was no merit to Plaintiffs' challenge to the grant of summary judgment, or their argument that section 940(A) did not apply to the facts of the case. Furthermore, the Court concluded the district court did not abuse its discretion in arriving at the final amount of the fees. Accordingly, the Court affirmed the district court's judgment. View "Kimzey, et al v. Flamingo Seismic" on Justia Law
United States v. DeChristopher
Defendant-Appellant Tim DeChristopher entered a Bureau of Land Management (BLM) oil and gas lease auction in Salt Lake City, Utah, by representing he was a bidder. His purpose was to disrupt the auction and call attention to the potential environmental harms of drilling on the leases. He proceeded to drive up the auction prices and ultimately won almost $1.8 million in bids, for which he was unable to pay. A jury convicted Defendant of interfering with the provisions of Chapter 3A of the Federal Onshore Oil and Gas Leasing Reform Act, and making a false statement or representation. He appealed, raising eight separate issues related to his conviction. Upon review of each, the Tenth Circuit determined they had no merit and affirmed Defendant's conviction and sentence. View "United States v. DeChristopher" on Justia Law
Public Service CO of NM v. NLRB
Robert Madrid worked for Petitioner Public Service Company of New Mexico (PNM) as a bill collector. "Angered by a particularly obstinate customer," and without permission, Madrid drove to the customer's home and disconnected the customer's gas service. It would later be determined that the customer was not a customer of PNM. PNM fired Madrid. Madrid responded by filing a grievance against PNM with his union, arguing that Madrid's termination violated its collective bargaining agreement with the Company. In making its argument, the union hypothesized that PNM treated Madrid more harshly than other employees guilty of similar conduct. The union sent PNM three discovery requests for documents to prove its hypothesis. Those requests became the subject of the appeal before the Tenth Circuit, as PNM refused to comply. An ALJ determined that PNM had engaged in an unfair labor practice, and ordered the Company to comply with the discovery requests. The National Labor Relations board adopted the ALJ's decision. PNM appealed the Board's order, and the Board cross-petitioned to have its order enforced. Upon review, the Tenth Circuit was unpersuaded by PNM's arguments on appeal, and affirmed the Board's decision. View "Public Service CO of NM v. NLRB" on Justia Law
Devon Energy Production Co. v. Mosiac Potash Carlsbad, Inc.
Plaintiff-Appellant Devon Energy Production Company, L.P. appealed a district court's judgment which dismissed Devon’s declaratory-judgment action against Defendant-Appellee Mosaic Potash Carlsbad, Inc. for lack of subject-matter jurisdiction. More specifically, under Federal Rule of Civil Procedure 57, Devon sought a declaratory judgment that federal law completely preempted Mosaic’s anticipated state-law claims emanating from Devon’s unauthorized drilling in a federally managed area of New Mexico known as the "Potash Area," and that the only remedies available to Mosaic were derived from the federal administrative and judicial remedies of the Administrative Procedure Act and certain regulatory provisions of the U.S. Department of the Interior that govern oil, gas, and potash leasing and development within the Potash Area. Devon alleged that the district court had federal-question jurisdiction over its declaratory-judgment action under 28 U.S.C. 1331. The district court concluded that there was no federal-question jurisdiction to support Devon’s action and dismissed its complaint, and subsequently denied Devon’s motion to alter or amend the judgment under Federal Rule of Civil Procedure 59(e). Upon review of the district court's judgment, the Tenth Circuit affirmed. View "Devon Energy Production Co. v. Mosiac Potash Carlsbad, Inc." on Justia Law
WildEarth Guardians v. Public Service Company
Plaintiff-Appellant WildEarth Guardians sued Public Service Company of Colorado (PSCo) pursuant to the Clean Air Act's citizen-suit provisions seeking civil penalties and an injunction to halt construction for a new coal-fired power plant in Pueblo, Colorado. WildEarth's principal argument was that PSCo failed to obtain a valid construction permit. Although the project initially complied with all applicable federal and state laws when construction commenced in 2005, the regulatory landscape changed in 2008. A decision of the D.C. Circuit required regulators to impose additional Clean Air Act requirements upon new power plant construction. While litigation was pending, PSCo finished constructing the plant and came into compliance with the new regulatory regime. The district court dismissed the suit, reasoning that to find a Clean Air violation under the circumstances would be to give unwarranted retroactive effect to the decision of the D.C. Circuit. The question before the Tenth Circuit was whether WildEarth's allegations that PSCo violated the Act became moot. Upon review, the Tenth Circuit concluded that "under the unusual circumstances of this case . . . PSCo's violations could nto reasonably be expected to recur, and thus no deterrent effect could be achieved." Accordingly, the Court dismissed the appeal as moot. View "WildEarth Guardians v. Public Service Company" on Justia Law
U.S. Magnesium LLC v. Env. Protection. Ag’y
US Magnesium sought review of a recent final rule from the United States Environmental Protection Agency (EPA). In its rule, the EPA called for Utah to revise its State Implementation Plan (SIP) for the federal Clean Air Act (CAA). Under the CAA, the EPA may call for a state to revise its SIP (a SIP Call) if the EPA finds the state’s current SIP substantially inadequate. Here, the EPA determined that Utah’s SIP was substantially inadequate because it contained an Unavoidable Breakdown Rule (UBR), which permits operators of CAA-regulated facilities to avoid enforcement actions when they suffer an unexpected and unavoidable equipment malfunction. In this SIP Call, published as a final rule in April 2011, the EPA requested that Utah promulgate a new UBR—one that conforms with the EPA’s interpretation of the CAA. US Magnesium maintained that the SIP Call was arbitrary and capricious and asked the Tenth Circuit to vacate it. Upon review, the Court did not find the EPA's decision arbitrary and capricious, and denied US Magnesium's petition for review. View "U.S. Magnesium LLC v. Env. Protection. Ag'y" on Justia Law
Abraham v. BP America Production Co.
Defendant-Appellant and Cross-Appellee BP America Production Company (BP) appealed a judgment from a jury verdict in favor of Plaintiffs-Appellees and Cross-Appellants, a certified class of royalty and overriding royalty owners. The judgment included $9,740,973 in damages for failure to pay royalties consistent with the underlying leases and $3,443,372.40 in prejudgment interest (calculated at 15%). The class took issue with two aspects of BP's "netback" method for market-value-at-the-well contracts: its sales price for natural gas liquids (NGLs) at the tailgate and its processing cost. Specifically, the class complained that BP sold refined NGLs at the tailgate of the processing plant to an affiliate company at a discount (called an "affiliate transfer price"), and that BP, as co-owner of the plant, deducted an inflated processing fee, thereby lessening their royalty payments. Further, the class alleged BP breached the covenants of good faith and fair dealing in their contracts. BP's theory of the case was that there is a market for gas at the well, and that its netback method resulted in royalty payments in line with market values. BP unsuccessfully moved in limine to prohibit the class from introducing evidence regarding the royalty practices of ConocoPhillips ("COP"), co-owner of the processing plant with BP. Upon review, the Tenth Circuit concluded that disputed evidence of material fact on the market-value leases existed to preclude either party from judgment as a matter of law in their favor. Admission of the COP evidence was an abuse of district court's discretion and reversible error; the Tenth Circuit reversed for a new trial on that ground. On remand, the Court ordered the district court vacate the judgment entered on the jury's verdict and the prejudgment interest award, and provide an explanation of any ruling on the breach of the implied covenant of good faith and fair dealing. View "Abraham v. BP America Production Co." on Justia Law
Arnold Oil Properties LLC v. Schlumberger Technology Corp.
Plaintiff Arnold Oil Properties, LLC hired Defendant Schlumberger Technology Corp. to perform a specialized cement job on its deep-zone gas well. After Schlumberger poured too much cement into the well, Arnold sued for breach of contract and negligence. The district court concluded as a matter of law that an alleged exculpatory provision in the parties' contract was an indemnification provision and therefore did not bar Arnold's recovery. After a jury found the parties were in unequal bargaining positions, the district court denied Schlumberger's request to enforce the contractual limitation-of-liability provision. Schlumberger appealed the district court's denial of summary judgment and its denial of judgment as a matter of law. Finding that the evidence supported the jury's finding, the Tenth Circuit affirmed the district court's grant of summary judgment in favor of Arnold. View "Arnold Oil Properties LLC v. Schlumberger Technology Corp." on Justia Law
EEC, Inc. v. Baker Hughes Oilfield
Defendant Baker Hughes Inteq, Inc. appealed the district court's order that denied its motion to compel arbitration. Plaintiff EEC, Inc. and Baker contracted for Baker to provide drilling equipment for use in EEC's horizontal oil and natural gas well in Oklahoma. The equipment was lost in the well. EEC filed suit in Oklahoma state court alleging that Baker’s negligence damaged its well. Baker removed the case to federal court, invoked diversity jurisdiction, and filed counterclaims for the value of its equipment. Baker also sought to compel arbitration. Baker prepared and EEC signed numerous documents containing arbitration clauses which were ultimately ruled as unenforceable by the district court. The court also denied Baker’s motion to reconsider. Further, the court enjoined Baker from proceeding with arbitration, and stayed further district court proceedings pending appeal of its orders. Upon review of the arbitration clauses at issue in this case, the Tenth Circuit found disagreed that because there were differences in the multiple clauses they were rendered unenforceable. The Court reversed the district court's judgment denying Baker's motion to compel arbitration and remanded the case with directions to order the parties to pursue arbitration. View "EEC, Inc. v. Baker Hughes Oilfield" on Justia Law