Justia Energy, Oil & Gas Law Opinion SummariesArticles Posted in U.S. 5th Circuit Court of Appeals
Factory Mutual Ins., Co. v. Alon USA, L.P., et al
FM was awarded damages stemming from an industrial accident that destroyed a waste treatment plant at an oil refinery plant owned by Alon. On appeal, Alon challenged the damage determination. The court affirmed the damage determination, concluding that the district court was clearly presented with two permissible views of the evidence; few records were available to estimate the cost of rebuilding the plant at issue, which counseled in favor of using a multiplier; and the 2.25 multiplier used by the district court was well within the range recommended by the witnesses and was consistent with past experiences. View "Factory Mutual Ins., Co. v. Alon USA, L.P., et al" on Justia Law
Ergon-West Virginia, Inc. v. Dynegy Marketing & Trade
This case involved a dispute between a natural gas clearinghouse, Dynegy, and two separate entities that managed refinery plants, Ergon Refining and Ergon-WV. Dynegy and Ergon Refining appealed the district court's holding that Dynegy had no contractual duty to Ergon Refining to attempt to secure replacement gas after declaring force majeure in response to hurricane damage, but did have such a duty to Ergon-WV under a separate contract. Although the district court mistakenly concluded that the Ergon Refining contract was ambiguous, it nevertheless correctly used extrinsic evidence to determine the parties' understanding of the contract's "reasonable dispatch" clause. The district court erred, however, in concluding that the Ergon-WV contract unambiguously required Dynegy to attempt to secure replacement gas. Therefore, the court held that neither contract required Dynegy to attempt to secure replacement gas during the force majeure period and affirmed the district court's ruling on the Ergon Refining contract and reversed with respect to the Ergon-WV contract. View "Ergon-West Virginia, Inc. v. Dynegy Marketing & Trade" on Justia Law
In Re: Deepwater Horizon
This case stemmed from the multi-district litigation involving the Deepwater Horizon drilling rig oil spill. Plaintiff appealed from the district court's dismissal of its action brought under the citizen-suit provisions of the Clean Water Act (CWA), 33 U.S.C. 1365(a)(1), the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. 9659(a), and the Emergency Planning and Community Right-to-Know Act (EPCRA), 42 U.S.C. 11046(a). The court concluded, with one exception, that the district court did not err by dismissing plaintiff's claims as moot because the Macondo well had been capped and sealed; on the present state of the record, plaintiff had standing to assert its claim for relief based on defendants' alleged failure to comply with the reporting requirements of EPCRA; and the EPCRA claim was not moot. Accordingly, the court affirmed in part, reversed in part, and remanded for further proceedings. View "In Re: Deepwater Horizon" on Justia Law
PPI Technology Services, L.P. v. Liberty Mutual Ins. Co.
Liberty Mutual insured PPI and PPI was retained by several third parties to assist in planning well-drilling operations. After a well was drilled in the wrong area, PPI was sued by the third parties, PPI then sought defense and indemnification from Liberty Mutual but Liberty Mutual refused. The court affirmed the district court's dismissal of PPI's breach of contract claim because it had no duty to defend. Both parties acknowledged that the duty-to-indemnify issue was now moot. Because the court affirmed the breach of contract claim's dismissal, the court affirmed the breach of the Texas Insurance Code claim and breach of the good faith and fair dealing claims. View "PPI Technology Services, L.P. v. Liberty Mutual Ins. Co." on Justia Law
Hornbeck Offshore Services, et al v. Salazar, et al
This case arose from the 2010 Deepwater Horizon accident in the Gulf of Mexico where an explosion killed 11 workers, caused the drilling platform to sink, and resulted in a major uncontrolled release of oil. At Presidential direction, those events prompted the Department of the Interior to prohibit all new and existing oil and gas drilling operations on the Outer Continental Shelf for six months. The district court preliminarily enjoined enforcement of the moratorium. At issue on appeal was whether the Interior's subsequent actions violated a specific provision of the court's injunction, justifying a finding of civil contempt. The court held that even though the Interior immediately took steps to avoid the effect of the injunction, the court concluded that none of those actions violated the court's order. Accordingly, the court reversed the judgment. View "Hornbeck Offshore Services, et al v. Salazar, et al" on Justia Law
Posted in: Admiralty & Maritime Law, Energy, Oil & Gas Law, Government & Administrative Law, U.S. 5th Circuit Court of Appeals
Coe, et al v. Chesapeake Exploration, L.L.C., et al
Chesapeake Exploration entered into an agreement to purchase deep rights held by Peak Energy in certain oil and gas leases in the Haynesville Shale formation at a certain price. Peak Energy filed a complaint against Chesapeake Exploration after Chesapeake Exploration refused to honor its commitment when the price of natural gas plummeted several months after the agreement. Chesapeake Exploration argued that the agreement was unenforceable under the Texas statute of frauds, fatally indefinite, and that Peak Energy had failed to tender performance. The court held that the district court did not err in its instructions to its expert, or in holding that the agreement was enforceable under the statute of frauds; in finding that Peak Energy was willing and able to tender performance of the agreement; and in calculating damages. Accordingly, the court affirmed the judgment. View "Coe, et al v. Chesapeake Exploration, L.L.C., et al" on Justia Law
Texas Keystone, Inc. v. Prime Natural Resources, Inc., et al.
This appeal arose from a related case currently pending in a United Kingdom Litigation, which arose from contractual disputes related to the exploration, development, and operation of oil blocks in Kurdistan, Iraq. On appeal, plaintiff argued that the district court erred by granting a motion to quash certain discovery subpoenas before plaintiff had an opportunity to respond in opposition and by not providing any reasons on the record for its decision. The court vacated the district court's order and remanded with instructions to allow plaintiff a reasonable period to respond to the motion and, thereafter, to provide written or oral reasons for the basis of its ruling. Otherwise, the district court was fully empowered to resolve these discovery disputes in a manner not inconsistent with this opinion. View "Texas Keystone, Inc. v. Prime Natural Resources, Inc., et al." on Justia Law
Little v. Shell Exploration & Prod. Co.
Relators filed two qui tam suits against Shell, alleging that Shell had defrauded the U.S. Department of the Interior. At the time their suits were filed, Relators were federal employees who discovered wrongdoing in the scope of their official duties. The district court granted summary judgment to Shell on the ground that two False Claims Act (Act) provisions prohibited the suit: 31 U.S.C. 3730(b)(1), describing who may bring suit; and 31 U.S.C. 3730(e)(4)(A),(B), which contained a public disclosure bar. The Fifth Circuit Court of Appeals reversed and remanded, holding (1) a federal employee, even one whose job it is to investigate fraud, a "person" under the Act such that he may maintain a qui tam action; and (2) the district court used an overly broad conception of the Act's public disclosure bar. View "Little v. Shell Exploration & Prod. Co." on Justia Law
Posted in: Energy, Oil & Gas Law, Government & Administrative Law, U.S. 5th Circuit Court of Appeals
BP Exploration Libya Ltd. v. ExxonMobil Libya Ltd.
This case arose from an underlying dispute involving three parties related to an alleged breach of an assignment agreement. The three parties disagreed over the appointment of arbitrators to hear their dispute. The agreement to arbitrate seemed designated for a two-party dispute. Notwithstanding that the parties agreed to arbitrate before three arbitrators, the district court ordered the parties to proceed to arbitration before five arbitrators: three party-appointed arbitrators, who would then choose two neutral arbitrators. If the party-appointed arbitrators could not agree, the district court ordered the parties to petition for appointment of the two neutral arbitrators. On appeal, the Fifth Circuit Court of Appeal affirmed in part and vacated in part the district court's judgment, holding (1) there was a lapse in the naming of the arbitrators in the parties' agreement; (2) the district court was authorized to exercise appointment power under 9 U.S.C. 5; and (3) the district court erred in deviating from the parties' express agreement to arbitrate before a three-member panel. Remanded. View "BP Exploration Libya Ltd. v. ExxonMobil Libya Ltd." on Justia Law
Posted in: Arbitration & Mediation, Contracts, Energy, Oil & Gas Law, U.S. 5th Circuit Court of Appeals
Petrohawk Props., L.P. v. Chesapeake Louisiana, L.P.
The Stockmans entered into an extension of their mineral lease with Chesapeake Louisiana, L.P. and received a $240,000 bonus. In May 2008, the Stockmans entered into a mineral lease with Petrohawk Properties, L.P. for a $1.45 million bonus. Petrohawk then dishonored the draft and executed a second mineral lease with the Stockmans, paying them a $1.7 million bonus. Chesapeake sued the Stockmans for breach of contract, and the parties settled at trial. The Stockmans then sued Petrohawk for fraud in obtaining the first mineral lease, and Chespeake sued Petrohawk for intentional interference with its contract with the Stockmans. The district court (1) found that Petrohawk procured the first mineral lease by fraud and rescinded the lease, (2) dismissed Chesapeake's tort claim, and (3) dismissed Petrohawk's claim for a return of its bonus money. The Fifth Circuit Court of Appeals affirmed, holding (1) Petrohawk obtained the first lease by fraud, and the district court did not err in rescinding the lease, awarding attorney's fees to the Stockmans; (2) the district court did not err in dismissing Petrohawk's counterclaim for the return of the lease bonus; and (3) the district court correctly dismissed Chespeake's intentional interference with a contract claim. View "Petrohawk Props., L.P. v. Chesapeake Louisiana, L.P." on Justia Law