Justia Energy, Oil & Gas Law Opinion Summaries

The Bureau of Ocean Energy Management (BOEM) adopted a rule requiring current lessees of offshore drilling facilities in the Gulf of Mexico to obtain financial assurance bonds to cover potential future decommissioning liabilities. Several states and industry groups sued to vacate the rule, arguing it imposed undue financial burdens. The American Petroleum Institute (API), representing a broad range of oil and gas companies, sought to intervene in defense of the rule, claiming its members had unique interests in upholding it.The United States District Court for the Western District of Louisiana denied API's motion to intervene. The court found the motion procedurally defective because API did not attach a proposed answer to its motion, as required by local rules. Substantively, the court concluded that API failed to demonstrate that BOEM would inadequately represent its interests, a necessary showing for intervention as of right. The court also denied permissive intervention, suggesting that API could present its unique perspective through an amicus brief instead.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court affirmed the district court's denial of API's motion to intervene. It held that API did not overcome the presumption that BOEM adequately represented its interests, as API failed to show any specific adversity of interest or actions by BOEM that were contrary to API's interests. The court also found no abuse of discretion in the district court's denial of permissive intervention, agreeing that API could effectively present its views as an amicus curiae. Thus, the district court's order denying intervention was affirmed. View "Louisiana v. Burgum" on Justia Law

Talos ERT, L.L.C. (Talos) hired DLS, L.L.C. (DLS) to remove corroded piping from an oil-and-gas platform off the Louisiana coast. During the project, a 129-pound pipe fell and struck Walter Jackson, a DLS employee, resulting in his death. Jackson’s widow, Vantrece Jackson, and his son, Y.J., represented by his mother, Anika Warner, sued Talos for wrongful death. The suits were consolidated, and the case proceeded to trial.The jury found Talos 88% at fault for Jackson’s death and awarded significant damages to both plaintiffs. Y.J. was awarded $120,000 in special damages and $20,000,000 in general damages. Mrs. Jackson was awarded $987,930 in special damages and $6,600,000 in general damages. Talos filed a renewed motion for judgment as a matter of law (JMOL) and alternatively moved for a new trial or remittitur. The district court denied the JMOL and new trial motions but granted a partial remittitur, reducing Y.J.’s general damages to $4,360,708.59 and Mrs. Jackson’s to $5,104,226.22. Plaintiffs declined a new trial on damages.The United States Court of Appeals for the Fifth Circuit reviewed the case. The court affirmed the district court’s denial of Talos’s renewed JMOL motion, finding sufficient evidence to support both theories of liability: vicarious liability and independent negligence. The court also upheld the denial of a new trial on liability, noting the jury’s verdict was supported by the evidence.Regarding damages, the court found no abuse of discretion in the district court’s application of the maximum recovery rule for Y.J.’s award, using a factually similar case, Rachal v. Brouillette. However, the court vacated Mrs. Jackson’s general damages award and remanded for redetermination of remittitur, as the district court’s comparison case, Zimko v. American Cyanamid, was not factually similar. The court found no plain error in the alleged prejudicial statements made by Plaintiffs’ counsel during the trial. View "Warner v. Talos ERT" on Justia Law

In 2017, Baker Hughes Saudi Arabia Co., Ltd. (Baker Hughes) and Dynamic Industries Saudi Arabia, Ltd. (Dynamic) entered into a subcontract for an oil-and-gas project in Saudi Arabia. The subcontract included provisions for resolving disputes through arbitration, with Dynamic having the option to demand arbitration in Saudi Arabia. If Dynamic did not demand arbitration in Saudi Arabia, either party could initiate arbitration under the rules of the Dubai International Financial Centre’s joint partnership with the London Court of International Arbitration (DIFC-LCIA). In 2021, the United Arab Emirates abolished the DIFC-LCIA and created a new arbitral institution. A contract dispute arose, and Baker Hughes sued in state court, which was then removed to federal court. Dynamic moved to dismiss for forum non conveniens or to compel arbitration under Schedule E of the subcontract. The district court denied Dynamic’s motion, stating that the designated forum no longer existed, making the forum-selection clause unenforceable.The United States District Court for the Eastern District of Louisiana reviewed the case and denied Dynamic’s motion to dismiss or compel arbitration, reasoning that the DIFC-LCIA no longer existed, thus invalidating the forum-selection clause.The United States Court of Appeals for the Fifth Circuit reviewed the case and held that the district court erred in refusing to compel arbitration. The appellate court found that the subcontract’s Schedule E designated only the rules of arbitration, not a specific forum. Even if the DIFC-LCIA was considered the designated forum, the court concluded that the forum-selection clause was not integral to the subcontract. The court reversed the district court’s decision and remanded the case for further proceedings, instructing the district court to consider whether the DIFC-LCIA rules could be applied by another available forum, such as the LCIA, DIAC, or a forum in Saudi Arabia, and to compel arbitration accordingly. The court also partially granted and denied Baker Hughes’s motion to strike portions of Dynamic’s reply brief. View "Baker Hughes v. Dynamic Industries" on Justia Law

The City of New Orleans filed a lawsuit against several pipeline operators and Entergy New Orleans LLC, alleging that their oil and gas production and transportation activities caused damage to the City's coastal zone. The City claimed that Entergy allowed its pipeline canals to widen and erode, threatening the City's storm buffer. The lawsuit was filed under Louisiana’s State and Local Coastal Resources Management Act of 1978 (SLCRMA).The defendants removed the case to federal court, arguing that Entergy, the only in-state defendant, was improperly joined to defeat diversity jurisdiction. Entergy consented to the removal and argued that it was exempt from SLCRMA’s permit requirements because its activities commenced before the statute's effective date. The City moved to remand the case to state court, but the United States District Court for the Eastern District of Louisiana denied the motion, dismissed Entergy as a party, and stayed the case pending appeal.The United States Court of Appeals for the Fifth Circuit reviewed the case and affirmed the district court's judgment. The appellate court held that Entergy was improperly joined because its activities were exempt under SLCRMA’s Historical-Use Exception, which applies to uses legally commenced before the statute's effective date. The court found no reasonable basis for the City to recover against Entergy, thus disregarding Entergy's citizenship and establishing complete diversity among the parties. The court also rejected the City's argument that it was merely a nominal party representing Louisiana, concluding that the City filed the suit on its own behalf and stood to benefit from a favorable ruling. Consequently, the appellate court affirmed the district court's denial of the City's motion to remand. View "New Orleans City v. Aspect Energy" on Justia Law

At issue in this appeal was the computation of economic losses arising out of the BP oil spill and based on the BP Settlement Agreement. The district court approved a policy adopted by the Claims Administrator (Policy 495) that consists of five methodologies to calculate claimant compensation: one Annual Variable Margin Methodology (AVMM) and four Industry-Specific Methodologies (ISMs). The Fifth Circuit held that the AVMM was consistent with the text of the Settlement Agreement, but that the four ISMs were not. The district court erred in approving the ISMs because they required the Claims Administrator to move, smooth, or otherwise reallocate revenue in violation of the Settlement Agreement. However, the ISMs, also required the Claims Administrator to match all unmatched profit and loss statements. Accordingly, the court affirmed as to the AVMM, reversed as to the ISMs, and remanded for further proceedings. View "In re: Deepwater Horizon" on Justia Law

The most natural reading of La. R.S. 30:103.1 and 103.2 is that operators forfeit their right to contribution when they fail to send timely reports to lessees with oil and gas interests in lands upon which the operator has no lease, and that interpretation is most consistent with the statute's context and purpose. TDX filed suit seeking its share of revenues from a unit well without deduction of drilling costs because Chesapeake did not provide the requested reports. The Fifth Circuit rejected Chesapeake's contention that even if sections 103.1 and 103.2 provide a remedy for lessees, applying them in that way would violate Article III of the Louisiana constitution. The court explained that, given the liberal construction courts must give titles, a title which gave notice that an act dealt with operators' reporting requirements cannot fail because it did not specify every party to whom they must report. Finally, the court rejected Chesapeake's counterclaim asserting that TDX was required to pay a risk fee under La. R.S. 30:10(A) because TDX did not make an election regarding the risk fee under that provision. The court reversed in part, affirmed in part, and remanded. View "TDX Energy v. Chesapeake Operating" on Justia Law

Plaintiff purchased property on which oil and gas operations had been conducted. Plaintiff filed suit against Hess, asserting claims for damages stemming from contamination caused by the oil- and gas-related activities on the tract. The oil and gas leases expired in 1973 and plaintiff purchased the property in 2007, when all wells had been plugged and abandoned. The district court granted Hess's motion for summary judgment, concluding that the subsequent purchaser rule barred plaintiff's claims. The court explained that a clear consensus has emerged among all Louisiana appellate courts that have considered the issue, and they have held that the subsequent purchaser rule does apply to cases, like this one, involving expired mineral leases. Because this case presented no occasion to depart from precedent, the court deferred to these precedents, and held that the subsequent purchaser doctrine barred plaintiff's claims. The court noted that although the denial of a writ is not necessarily an approval of the appellate court's decision nor precedential, the Louisiana Supreme Court has had multiple opportunities to consider this issue and has repeatedly declined to do so. Finally, the court declined to certify questions to the state court. Accordingly, the court affirmed the judgment. View "Guilbeau v. Hess Corp." on Justia Law

Plaintiffs filed suit against oil and gas companies and their insurers, claiming that the companies' dredging activities caused damage to the fisheries the fishermen used. The district court granted summary judgment for Florida Gas and Southern Natural because plaintiffs did not create a genuine issue of material fact as to whether the companies' activities constituted "dredging" so as to support maritime tort claims. The district court then denied plaintiffs' motion for reconsideration. The court affirmed the district court's judgment as to Florida Gas because none of plaintiffs' evidence created a genuine issue of material fact as to whether Florida Gas participated in dredging activities. However, the court reversed the district court's judgment as to Southern Natural because plaintiffs presented new, conclusive evidence in their motion for reconsideration pertaining to Southern Natural that they were justified in not presenting earlier. In this case, plaintiffs provided three types of new evidence upon reconsideration: Southern Natural's deposition transcript; documentary evidence offered during Southern Natural's deposition; and Southern Natural's responses to requests for admission. The court disagreed with the district court's analysis, particularly as it pertained to Southern Natural's deposition transcript and responses to requests for admission. The court explained that these items were clearly probative and, if the district court would have considered the contents of Southern Natural's deposition or its admissions, plaintiffs would have defeated summary judgment as to Southern Natural. View "In Re: Louisiana Crawfish Producers" on Justia Law

BP built and maintained the Atlantis Platform, a semi-submersible floating oil production facility located in the Gulf of Mexico. Plaintiff Keith Abbott, employed by BP in the Atlantis administrative offices, filed suit under the False Claims Act (FCA), 31 U.S.C. 3730(b)(2), claiming that BP falsely certified compliance with various regulatory requirements. While DOI was investigating Atlantis, Abbott amended his complaint to add Food & Water Watch as a plaintiff and included additional claims for violations of the Outer Continental Shelf Lands Act (OCSLA), 43 U.S.C. 1331 et seq. On appeal, plaintiffs challenged the district court's grant of summary judgment for BP on all claims. In this case, plaintiffs' FCA claims centered on whether engineers approved the various stages of construction of Atlantis. The court explained that these facts failed to create an issue of fact as to materiality given the particular circumstances in plaintiffs' case. In light of Universal Health Servs., Inc. v. United States ex rel. Escobar, when the DOI decided to allow Atlantis to continue drilling after a substantial investigation into plaintiffs' allegations, that decision represented "strong evidence" that the requirements in those regulations were not material. In regard to plaintiffs' OCSLA claims, the court concluded that plaintiffs lack standing because they failed to plead individualized injuries. Accordingly, the court affirmed the judgment. View "Abbott v. BP Exploration & Production" on Justia Law

The Board filed suit in Louisiana state court against various companies involved in the exploration for and production of oil reserves off the southern coast of the United States, alleging that defendants' exploration activities caused infrastructural and ecological damage to coastal lands overseen by the Board that increased the risk of flooding due to storm surges and necessitated costly flood protection measures. The district court denied the Board's motion to remand after removal to federal court, and then granted defendants' motion for failure to state a claim on which relief can be granted. The court concluded that the Board's negligence and nuisance claims necessarily raised federal issues sufficient to justify federal jurisdiction and thus the court did not reach the remaining issues. The court also concluded that the district court properly dismissed the negligence claim because the Board failed to establish that defendants breached a duty of care to it under the facts alleged, the Board's strict liability claim failed because the Board did not state a claim that defendants owed it a duty of care; the district court properly dismissed the servitude of drain claim; and the Board failed to state a claim for nuisance. Accordingly, the court affirmed the judgment. View "Board of Commissioners of the Southeast Louisiana Flood Protection Authority v. Tennessee Gas Pipeline Co." on Justia Law