Justia Energy, Oil & Gas Law Opinion SummariesArticles Posted in US Court of Appeals for the Tenth Circuit
American Petroleum, et al. v. U.S. Department of Interior, et al.
After the Department of the Interior amended regulations in 2016, the American Petroleum Institute (API) challenged several of the regulations that governed the calculation of royalties for oil and natural gas produced on federal lands. The district court rejected these challenges at summary judgment, and API appealed. Because API did not show that the agency acted arbitrarily and capriciously in enacting the challenged provisions of the 2016 regulations, the Tenth Circuit Court of Appeals affirmed. View "American Petroleum, et al. v. U.S. Department of Interior, et al." on Justia Law
Western Watersheds Project, et al. v. United States Bureau of Land Management, et al.
Three conservation groups challenged the U.S. Bureau of Land Management’s approval of Jonah Energy’s development project on state and federal land in Wyoming. The project was designed to drill exploratory wells on land for which Jonah possessed development rights. The conservation groups argued the district court erred in upholding the BLM’s approval under the National Environmental Protection Act and the Federal Land Polocy and Management Act. Specifically, they contended the BLM inadequately considered the impact of the project on the sage-grouse and pronghorn antelope migration and grazing patterns. The Tenth Circuit concluded the BLM adequately collected and considered information on the sage-grouse and pronghorn, and selected a development plan that met statutory requirements. View "Western Watersheds Project, et al. v. United States Bureau of Land Management, et al." on Justia Law
Bay, et al. v. Anadarko E&P Onshore, et al.
Marvin and Mildred Bay (“the Bays”) challenged a court order dismissing their trespass claim against Anadarko E&P Onshore LLC and Anadarko Land Corporation (collectively, “Anadarko”). Anadarko, an oil and gas company, owned the mineral rights under the Bays’ farm. The Bays brought a putative class action along with other surface landowners against Anadarko, alleging that Anadarko’s mineral lessees had exceeded the scope of their mineral rights by drilling multiple vertical wells on the surface owners’ land when it was possible to drill fewer wells of the “directional” type. At the conclusion of the Bays’ presentation of evidence, the district court found that the Bays’ evidence failed as a matter of law to demonstrate that Anadarko’s activities amounted to a trespass and dismissed the case. Finding that the district court applied the wrong legal standard, the Tenth Circuit reversed the dismissal in "Bay I," finding that Colorado’s common law of trespass required the Bays to show that Anadarko’s lessees had “materially interfered” with the Bays’ farming operations. The appellate court questioned whether the record demonstrated that the Bays met this standard in their trial, but because Anadarko had not raised this specific issue, the case was remanded to the district court for further proceedings. On remand, the district court again granted judgment as a matter of law to Anadarko on the material interference issue. Specifically, the court first held that it was bound by the Tenth Circuit's interpretation in Bay I of the material interference standard, then found that the Bays showed only that Anadarko’s conduct inconvenienced them—which was insufficient to satisfy the material interference standard. The Bays again appealed, arguing that the Tenth Circuit's discussion of the material interference standard in Bay I was dictum; thus, the district court incorrectly determined that it was bound to apply that standard. They further argued the material interference standard applied by the district court was inconsistent with the Colorado standard for trespass outlined in Gerrity Oil & Gas Corp. v. Magness, 946 P.2d 913 (Colo. 1997), and that the evidence they presented in their trial established a prima facie case of material interference under Gerrity. The Tenth Circuit determined the district court did not err in its second dismissal and affirmed judgment. View "Bay, et al. v. Anadarko E&P Onshore, et al." on Justia Law
Black, et al. v. Occidental Petroleum, et al.
Plaintiffs-landowners alleged Anadarko Petroleum Corporation's intracompany practice of leasing its mineral interests to its affiliated operating company, including its 30% royalty rate, had the intent and effect of reducing the value of Plaintiffs’ mineral interests. Plaintiffs claimed Anadarko thereby maintained and furthered its dominant position in the market for leasing oil and gas mineral interests in violation of the Sherman Act § 2 and Wyoming antitrust laws. Plaintiffs sought treble damages and attorneys’ fees under § 4 of the Clayton Act. The federal district court certified a class action, for liability purposes only, comprised of “[a]ll persons . . . having ownership of Class Minerals during the Class Period.” Anadarko appealed the district court’s class certification pursuant to Federal Rule of Civil Procedure 23(f). The Tenth Circuit concluded the district court applied the correct legal standard in deciding whether the class satisfied the requirements of Rule 23, and it did not abuse its discretion in certifying the class. The Court therefore affirmed the district court’s class certification. View "Black, et al. v. Occidental Petroleum, et al." on Justia Law
EFLO Energy, et al. v. Devon Energy
Plaintiffs EFLO Energy (EFLO) and Pacific LNG Operations, Ltd. (Pacific) filed a diversity action alleging that defendant Devon Energy Corporation (Devon Energy) violated warranties under Oklahoma’s Uniform Commercial Code, committed fraud, and was unjustly enriched, when it drew upon a standby letter of credit that plaintiffs had obtained to secure their obligations under two written agreements with Devon Canada Corporation. Devon Energy moved for, and was granted, summary judgment with respect to all three claims. Plaintiffs appealed the district court’s grant of summary judgment. Finding no reversible error in the district court's judgment, the Tenth Circuit affirmed. View "EFLO Energy, et al. v. Devon Energy" on Justia Law
Dine Citizens Against Ruining Our Environment, et al. v. Haaland, et al.
Citizen groups challenged the Bureau of Land Management’s (“BLM”) environmental assessments (“EAs”) and environmental assessment addendum analyzing the environmental impact of 370 applications for permits to drill (“APDs”) for oil and gas in the Mancos Shale and Gallup Sandstone formations in the San Juan Basin of New Mexico. These challenges came after a separate but related case in which the Tenth Circuit Court of Appeals remanded to the district court with instructions to vacate five EAs analyzing the impacts of APDs in the area because BLM had failed to consider the cumulative environmental impacts as required by the National Environmental Policy Act (“NEPA”). BLM prepared an EA Addendum to remedy the defects in those five EAs, as well as potential defects in eighty-one other EAs that also supported approvals of APDs in the area. Citizen Groups argued these eighty-one EAs and the EA Addendum violated NEPA because BLM: (1) improperly predetermined the outcome of the EA Addendum; and (2) failed to take a hard look at the environmental impacts of the APD approvals related to greenhouse gas (“GHG”) emissions, water resources, and air quality. BLM disagreed, contending the challenges to some of the APDs were not justiciable because the APDs had not yet been approved. The district court affirmed the agency action, determining: (1) Citizen Groups’ claims based on APD’s that had not been approved were not ripe for judicial review; (2) BLM did not unlawfully predetermine the outcome of the EA Addendum; and (3) BLM took a hard look at the environmental impacts of the APD approvals. The Tenth Circuit agreed with BLM and the district court that the unapproved APDs were not ripe and accordingly, limited its review to the APDs that had been approved. Turning to Citizen Groups’ two primary arguments on the merits, the appellate court held: (1) BLM did not improperly predetermine the outcome of the EA Addendum, but, even considering that addendum; (2) BLM’s analysis was arbitrary and capricious because it failed to take a hard look at the environmental impacts from GHG emissions and hazardous air pollutant emissions. However, the Court concluded BLM’s analysis of the cumulative impacts to water resources was sufficient under NEPA. View "Dine Citizens Against Ruining Our Environment, et al. v. Haaland, et al." on Justia Law
Citizens for Constitutional, et al. v. United States, et al.
Plaintiffs Citizens for Constitutional Integrity and Southwest Advocates, Inc. appealed the rejection of their challenges to the constitutionality of the Congressional Review Act (CRA), and Senate Rule XXII, the so-called Cloture Rule, which required the votes of three-fifths of the Senate to halt debate. The Stream Protection Rule, 81 Fed. Reg. 93,066 (Dec. 20, 2016), heightened the requirements for regulatory approval of mining-permit applications. The Rule was promulgated by the Department of the Interior’s Office of Surface Mining Reclamation and Enforcement (the Office) in the waning days of the Obama Administration. Within a month of the Stream Protection Rule taking effect on January 19, 2017, both Houses of Congress had passed a joint resolution disapproving the Rule pursuant to the CRA, and President Trump had signed the joint resolution into law. According to Plaintiffs, the repeal of the Rule enabled the approval of a 950.55-acre expansion of the King II Coal Mine (the Mine), located in La Plata County, Colorado, and owned by GCC Energy. Plaintiffs filed suit in the United States District Court for the District of Colorado against the federal government and several high-ranking Department of the Interior officials in their official capacities (collectively, Defendants) seeking: (1) a declaration that the CRA and the Cloture Rule were unconstitutional and that the Stream Protection Rule was therefore valid and enforceable; (2) vacation of the approval of the King II Mine permit modification and an injunction against expanded mining activities authorized by the modification; and (3) attorney fees. The Tenth Circuit Court of Appeals rejected plaintiffs' challenges to the CRA and held that they lacked standing to challenge the Cloture Rule. View "Citizens for Constitutional, et al. v. United States, et al." on Justia Law
Olsen, et al. v. CIR
The issue this appeal presented for the Tenth Circuit's review centered on the denial of tax benefits relating to petitioner Preston Olsen's purchase of solar lenses. The benefits were only available if the taxpayer had a profit motive for the purchases. Olsen bought the lenses in 2009, 2011, 2012, 2013, and 2014, through a program created by Neldon Johnson. Under the program, Johnson would use the lenses in a new system to generate electricity by heating a liquid to generate steam and drive a turbine. Johnson never finished the system; he had completed the lenses on only one tower and hadn’t decided whether those lenses would heat water, oil, or molten salt. Johnson funded the program through investors like Olsen who bought lenses from Johnson’s companies and leased the lenses to another of Johnson’s companies. Once the system began producing revenue, Johnson's company would pay Olsen’s company $150 per lens per year. But the system never generated any revenue. From 2009 to 2014, Olsen annually claimed depreciation deductions and solar energy credits on the lenses. These claims allowed the Olsens to pay little or no federal income taxes. "So the Olsens came out ahead even though they had never obtained any money from the leases." The tax court disallowed the benefits in part because it found Petitioner lacked a profit motive. Finding no reversible error in the tax court's decision, the Tenth Circuit affirmed. View "Olsen, et al. v. CIR" on Justia Law
Suncor Energy v. EPA
The Tenth Circuit found the EPA’s own written decision indicated the EPA concluded that the statutory and regulatory definitions of “small refinery” did not provide specific “guidance or limits” on how the terms “refinery” and “average aggregate daily crude oil throughput” should have been “evaluated.” Accordingly, the EPA proceeded as though it “ha[d] discretion to choose what factors and information it w[ould] consider in this evaluation.” The EPA’s decisions to deny an extension of a temporary exemption to “small refineries” from complying with the Clean Air Act’s Renewable Fuel Standard Program were reversed and remanded. "That does not mean that the EPA could not again arrive at the same conclusion. But, to do so, the EPA would need to (a) either consider and apply its own regulatory definition of “facility” to the circumstances presented here or explain why that regulatory definition is inapplicable, (b) provide clear guidance on its integration analysis, to the extent it continues to rely on that factor, and (c) omit any consideration of Suncor’s management structure or public statements unless it can demonstrate that those factors are somehow consistent with, and have a reasonable connection to, the statutory and regulatory definitions of the term “refinery.” View "Suncor Energy v. EPA" on Justia Law
OXY USA v. DOI, et al.
OXY USA, Inc. appealed a decision of the U.S. Department of the Interior’s Office of Natural Resources Revenue (“ONRR”) ordering it to pay an additional $1,820,652.66 in royalty payments on federal gas leases that were committed to the Bravo Dome Unit (“the Unit”). The owner of the leases OXY subsequently acquired - Amerada Hess Corporation (“Hess”) - used almost all of the CO2 it produced in the Unit for its own purposes rather than sale. ONRR rejected Hess’s valuation method and established its own. Hess appealed, and ONRR’s Director issued a decision reducing the amount Hess owed but affirming the remainder of ONRR’s order. Hess appealed to the Interior Board of Land Appeals, but the Board did not issue a final merits decision prior to the 33-month limitations period. On appeal to the United States District Court for the District of New Mexico, the district court rejected OXY’s challenge to the amount of royalties owed and affirmed the Director’s decision. Finding ONRR's interpretation and application of the marketable-condition rule to this case was not plainly erroneous or inconsistent with the applicable regulations, the Tenth Circuit Court of Appeals affirmed. View "OXY USA v. DOI, et al." on Justia Law