Justia Energy, Oil & Gas Law Opinion SummariesArticles Posted in US Court of Appeals for the Eighth Circuit
EEE Minerals, LLC v. State of North Dakota
EEE Minerals, LLC, and a Trustee for The Vohs Family Revocable Living Trust, sued the State of North Dakota, the Board of University and School Lands, and the Board’s commissioner in a dispute over mineral interests in McKenzie County, North Dakota. Plaintiffs alleged that state law related to mineral ownership was preempted by federal law and that the defendants had engaged in an unconstitutional taking of the plaintiffs’ mineral interests. Plaintiffs sought damages, an injunction, and declaratory relief. The district court dismissed the action. The Eighth Circuit affirmed. Plaintiffs contend that the Flood Control Act impliedly preempts the North Dakota statute because the state law “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” The court explained that it is not convinced that the State’s determination of a high-water mark, and the attendant settling of property rights under state law, stands as an obstacle to accomplishing the objectives of the Flood Control Act. The court wrote that the interests of the United States and the goals of the Flood Control Act are unaffected by a dispute between the State and a private party over mineral rights that were not acquired by the federal government. Further, the court explained that Plaintiffs have not established that the United States will be prevented from flooding or inundating any land covered by the 1957 deed in which the State claims ownership of mineral interests under state law. The Flood Control Act would not dictate that property rights be assigned to Plaintiffs. View "EEE Minerals, LLC v. State of North Dakota" on Justia Law
H&T Fair Hills, Ltd. v. Alliance Pipeline L.P.
Alliance Pipeline L.P. (“Alliance”) entered into contracts with four states (“State Agreements”) as well as contracts with individual landowners in order to build a natural gas pipeline. The contracts with landowners provide easements for the pipeline right-of-way. In 2018, some landowners on the pipeline right-of-way filed a class-action lawsuit against Alliance. After the class was certified, Alliance moved to compel arbitration for the approximately 73 percent of plaintiffs whose easements contain arbitration provisions. Alliance appealed, arguing the district court erred by not sending all issues to arbitration for the plaintiffs whose easements contain arbitration provisions. The Eighth Circuit affirmed in part and reversed in part. The court explained that the district court that the damages issues are subject to arbitration for the plaintiffs whose easements contain an arbitration provision. Plaintiffs make two arguments against sending any issues to arbitration: (1) Plaintiffs’ claims cannot be within the scope of the arbitration provisions because the claims allege lack of compensation for “ongoing yield losses,” not “damages to crops” and (2) Plaintiffs’ claims arise under the State Agreements, which do not have arbitration provisions. The court found the arbitration agreements to be enforceable and to cover all issues. The court held that as to the arbitration class members, the claims should be dismissed without prejudice. As to the members of the class without arbitration provisions, the court saw no reason why these class members cannot proceed with the lawsuit in the normal course at the district court. View "H&T Fair Hills, Ltd. v. Alliance Pipeline L.P." on Justia Law
Entergy Arkansas, LLC v. Arkansas Electric Energy Consumers, Inc.
Entergy Arkansas, LLC, sells electricity to Arkansans. The Arkansas Public Service Commission sets the retail rates that Entergy can charge. Arkansas Electric Energy Consumers, Inc. (“AEEC”) is a trade association comprised of large industrial and agricultural Entergy customers. Entergy asked the Commission for permission to raise its retail rates. AEEC intervened, urging the Commission to deny Entergy’s request. The Commission ultimately did so. Entergy then sued the Commission in September 2020, alleging that the denial violated federal and state law. The Commission promptly moved to dismiss, but the district court denied its motion. Entergy moved for summary judgment. A week later—about twenty-two months after the suit commenced—AEEC moved to intervene as of right or, alternatively, to intervene permissively. AEEC appealed only the denial of its motion for the intervention of right under Rule 24(a)(2). The Eighth Circuit affirmed the denial. The court explained that the Commission’s trial presentation does not evince the sort of “misfeasance or nonfeasance in protecting the public” necessary to overcome the presumption of adequacy. The court explained that the Commission has maintained throughout this litigation that the lawfulness of its denial must be evaluated solely on the basis of the evidence presented in the administrative proceeding (in which AEEC participated) and that additional evidence before the district court is, therefore, unnecessary. AEEC, therefore, has not shown that the Commission inadequately represents its interest in this litigation, as required by Rule 24(a)(2). View "Entergy Arkansas, LLC v. Arkansas Electric Energy Consumers, Inc." on Justia Law
Dakota Energy Coop, Inc. v. East River Electric Power Coop., Inc.
Dakota Energy Power Cooperative, Inc., a member of East River Electric Power Cooperative, Inc., sought to withdraw from East River and to terminate the parties’ long-term power contract so that it could purchase electricity from another source. When East River resisted, Dakota Energy sued for anticipatory breach of contract and sought a declaratory judgment providing that it had a contractual right to withdraw from East River by way of a buyout. The district court granted summary judgment in favor of East River, and Dakota Energy appealed. The Eighth Circuit affirmed. The court explained that under the UCC, the terms of a written contract “may be explained or supplemented” by certain extrinsic evidence, including “usage of trade.” Dakota Energy’s proffered trade usage evidence would effectively add an entirely new provision to the WPC. Moreover, under the UCC, “the express terms of an agreement and any applicable . . . usage of trade must be construed whenever reasonable as consistent with each other.” Here, the express terms of the WPC—which provide that the agreement will “remain in effect” until December 31, 2075, and which contain no provision allowing for an early buyout—are inconsistent with any trade usage evidence suggesting something to the contrary. Therefore, the court concluded that the WPC unambiguously requires Dakota Energy to purchase all of its electricity from East River until December 31, 2075, and that no provision in the WPC or East River’s Bylaws allows for an earlier termination of that obligation. View "Dakota Energy Coop, Inc. v. East River Electric Power Coop., Inc." on Justia Law
Northern Oil and Gas, Inc. v. EOG Resources, Inc.
In June 1949, Axel Anderson conveyed to L.S. Youngblood a ½ mineral interest in several tracts of land in Mountrail County, North Dakota (“the Disputed Lands”)In 2011, with the Andersons and Henry Johnson now deceased, grantee Johnson’s successors filed a quiet title action in state court against Nancy Finkle and grantor Andersons’ other successors to resolve the over conveyance, seeking title to a ½ mineral interest in the Disputed Lands (“the Finkle Litigation”).inkle appealed the quiet title order and judgment, arguing that an exception to the Duhig rule that is not at issue in this appeal applied and therefore the trial court should have awarded each side a 1/4 mineral interest in the Disputed Lands. In January 2008, Finkle, a successor to grantor Andersons’ mineral interests, conveyed by oil and gas lease her mineral interest leasehold and operating rights in the Disputed Lands to Montana Oil Properties, Inc. Northern Oil did not participate while Finkle defended the Johnson successors’ quiet title claim and asserted her own deed reformation counterclaim in state court. The Eighth Circuit affirmed, holding that the district court correctly granted summary judgment to the defendant on the ground that due to an over-conveyance of rights, Plaintiff had not obtained any mineral rights in the subject property when it acquired its interest in a leasehold. Further, the court held that the district court granted summary judgment dismissing Northern Oil’s reformation claim as time-barred by the ten-year statute of limitations in N.D.C.C. Section 28-01-15(2), applying a Supreme Court of North Dakota decision issued after the Finkle Litigation, Western Energy Corp. v. Stauffer, 921 N.W.2d 431, 434-35 (N.D. 2019). View "Northern Oil and Gas, Inc. v. EOG Resources, Inc." on Justia Law
WPX Energy Williston, LLC v. Hon. B.J. Jones
These appeals arise from a dispute over rights-of-way granted to WPX Energy Williston, LLC by the Bureau of Indian Affairs. The areas are located on allotments of land owned by members of the Fettig family within the Fort Berthold Indian Reservation. WPX Energy and the Fettigs agreed to a condition, which was incorporated into the grants, that bans smoking on the right-of-way land. In 2020, the Fettigs sued WPX Energy in the Three Affiliated Tribes District Court, alleging that the company breached the smoking ban. WPX Energy moved to dismiss for lack of jurisdiction. The tribal court concluded that it possessed jurisdiction over the case and denied the motion to dismiss. WPX Energy appealed the decision to a tribal appellate court. he district court concluded that WPX Energy had exhausted its tribal court remedies and that the tribal court lacked jurisdiction, so it granted a preliminary injunction. The Eighth Circuit vacated the injunction and remanded to the district court with directions to dismiss the complaint without prejudice. The court concluded that WPX Energy did not exhaust its tribal court remedies and that a ruling in federal court on the question of tribal court jurisdiction was premature. The court explained that the policy of promoting tribal self-governance is not limited to tribal court proceedings that involve the development of a factual record. Rather, exhaustion of tribal court remedies “means that tribal appellate courts must have the opportunity to review the determinations of the lower tribal courts.” View "WPX Energy Williston, LLC v. Hon. B.J. Jones" on Justia Law
State of Minnesota v. American Petroleum Institute
Minnesota sued a litany of fossil fuel producers1 (together, the Energy Companies) in state court for common law fraud and violations of Minnesota’s consumer protection statutes. In doing so, it joined the growing list of states and municipalities trying to hold fossil fuel producers responsible for alleged misrepresentations about the effects fossil fuels have had on the environment. The Energy Companies removed to federal court. The district court granted Minnesota’s motion to remand, and the Energy Companies appealed. The Eighth Circuit affirmed. The court held that Congress has not acted to displace the state-law claims, and federal common law does not supply a substitute cause of action, the state-law claims are not completely preempted. The court reasoned that because the “necessarily raised” element is not satisfied, the Grable exception to the well-pleaded complaint rule does not apply to Minnesota’s claims. Further, the court wrote that the connection between the Energy Companies’ marketing activities and their OCS operations is even more attenuated. Thus, neither requirement is met, there is no federal jurisdiction under Section 1349. View "State of Minnesota v. American Petroleum Institute" on Justia Law
Timothy Brown v. Continental Resources, Inc.
Continental Resources, Inc. operates an input well on Timothy and Tracy Browns’ land in Harding County, South Dakota. The Browns sued Continental, seeking compensation for damage to the surface of their land and Continental’s use of their pore space. Continental removed the case to federal court and twice moved for partial summary judgment. The district court granted both motions, finding that Plaintiffs: (1) released Continental from liability for surface damage; and (2) could not recover damages under South Dakota law for Continental’s pore space use. The Eighth Circuit affirmed. The court explained that section 45-5A-4 clearly articulates three categories of compensable harm. Plaintiffs sought damages for lost use, which is not one of the categories. They try to infuse ambiguity into the statutory scheme by pointing to Chapter 45-5A’s purpose and legislative findings sections. While these sections may help a court interpret ambiguous statutory language, the court found none in Section 45-5A-4. Accordingly, the court held that Plaintiffs have not suffered compensable harm under South Dakota law, so the district court did not err in granting summary judgment. View "Timothy Brown v. Continental Resources, Inc." on Justia Law
Highline Exploration, Inc. v. QEP Energy Company
Highline Exploration, Inc. (“Highline”) Nisku Royalty and others (collectively, “Plaintiffs”) sued QEP Energy Company (“QEP”), alleging QEP breached overriding royalty interest assignments held by Plaintiffs because QEP deducted post-production costs from royalties (“ORRIs”) in the oil, gas, and other minerals it paid to Plaintiffs. The district court granted summary judgment to QEP and denied the same to Plaintiffs. Highline appealed the district court’s summary judgment order.The Eighth Circuit affirmed and agreed with the district court’s conclusion: the free and clear clause was intended to specify which costs were not deductible from the ORRIs. This interpretation does not render the free and clear clause meaningless. The assignments provide for nonstandard ORRIs, and the free and clear clause clarifies that the standard costs (production costs) are excluded from royalty payment calculations. Therefore, Highline’s argument that the district court failed to provide meaning to the free and clear clause fails.Further, the court held that the “free and clear” language does modify the ORRIs: it limits the expenses that can be deducted from the parties’ nonstandard ORRI grants. Given this interpretation, the free and clear clause’s modification of the ORRIs supports summary judgment. View "Highline Exploration, Inc. v. QEP Energy Company" on Justia Law
Northern Oil and Gas, Inc. v. EOG Resources, Inc.
Northern filed a quiet-title action in federal court against EOG over a dispute regarding the parties' competing interests in mineral rights in North Dakota. Northern and EOG both lease oil and gas rights, and their lessors litigated a similar matter in state court. The district court found that Northern was in privity with its lessor, holding that the lessors' case barred Northern's claims.The Eighth Circuit reversed the district court's grant of EOG's motion to dismiss under principles of res judicata, holding that no privity exists between Northern and its lessor because Northern acquired its lease before the lessors' case. The court applied Gerrity Bakken, LLC v. Oasis Petroleum N. Am., LLC, 915 N.W.2d 677 (N.D. 2018), and held that the privity doctrine cannot be applied if the rights to property were acquired by the person sought to be bound before the adjudication. View "Northern Oil and Gas, Inc. v. EOG Resources, Inc." on Justia Law