Justia Energy, Oil & Gas Law Opinion Summaries

The Supreme Court reversed in part and affirmed in part the judgment of the district court deciding that a form of the accommodation doctrine governed to resolve the parties' dispute over priority of rights between mineral developers, holding that the BLM was not an indispensable party and that law of the case principles applied.The parties in this case were Berenergy Corporation, which owned rights to both federal and private oil and gas, and Peabody Powder River Mining, LLC, which held federal coal leases. These minerals overlapped. In Berenergy I, the Supreme Court determined that the BLM was a necessary party to the proceedings dealing with competing federal leases and remanded the case. The private oil and gas lease (the Thornburg lease) was not appealed or decided in Berenergy I. On remand, the district court concluded that it did not have subject matter jurisdiction as to the lands underlying the Thornburg lease without the presence of the BLM. The court then applied the law of the case in deciding that a form of the accommodation doctrine governed to resolve the parties' dispute on the overlapping minerals. The Supreme Court held (1) the BLM was not an indispensable party to the lease dispute; and (2) law of the case principles applied. View "Berenergy Corp. v. BTU Western Resources, Inc." on Justia Law

The Supreme Court affirmed the district court’s order on summary judgment motions and order after bench trial in this dispute arising from an ill-conceived business conveyance plan during a downturn in the oil market, holding that the district court did not err or abuse its discretion in any respect.Three Garland brothers, who had separate entities providing specialized services to the oil industry, formed a company with their companies as members and the Garlands individually as members. Alex Mantle was president of the company. Mantle and the Garlands later entered into a memorandum of understanding (MOU) providing that Mantle and his wife would buy the company, but Mantle backed out of the deal. The Garlands liquidated the company, and this litigation followed. The district court disposed of some claims on summary judgment and resolved the remainder after a bench trial. The Supreme Court affirmed, holding (1) the Garlands and their entities did not abandon their counterclaims; (2) the MOU was an enforceable contract; (3) the district court correctly dismissed the Mantles’ fraud claim; (4) the district court correctly concluded that some conveyances by the Garlands fit the definitions of a fraudulent conveyance; (5) the elements for LLC veil-piercing were absent; and (6) the Garlands did not owe Mantle a duty of good faith. View "Garland v. Mantle" on Justia Law

At issue was whether this case presented a justiciable issue when the Supreme Court could not render a decision binding on a federal agency and could only offer an advisory opinion that may or may not ultimately bind the parties.Berenergy Corporation, which produced oil from several sites under oil and gas leases granted by the United States Department of the Interior, Bureau of Land Management (BLM), sought a declaratory judgment that the terms of its BLM oil leases provided it with rights superior to any obtained by Peabody Energy Corporation through its coal leases. The district court granted in part and denied in part both parties’ motions for summary judgment. Both parties appealed. The Supreme Court remanded the case for further proceedings before the district court, holding (1) Congress intended that the issues raised by Berenergy be decided by the Secretary of the Interior or its BLM designees; (2) there was no express consent by the federal government for the Secretary or the BLM to be made a party to suits such as this for the purpose of informing a congressionally approved decision by the district court; but (3) the court nonetheless remands this case for an evaluation of whether a federal agency may participate in this suit. View "Berenergy Corp. v. BTU Western Resources, Inc." on Justia Law

The Supreme Court affirmed the Board of Equalization’s decision affirming the ruling of the Wyoming Department of Revenue against PacifiCorp, Inc., which sought a ruling that its purchases of certain chemicals used in the process of generating electricity in coal-fired electrical generation facilities in Wyoming qualified for either the manufacturers’ sales tax exemption or the wholesalers’ sales tax exemption. The court held (1) The Board erred when it concluded that PacifiCorp is not a manufacturer under Wyo. Stat. Ann. 39-15-105(a)(iii)A); (2) the Board did not err when it held that certain chemicals necessary to treat water and sulfur dioxide emissions during the coal combustion processes that generate electricity are not “used directly” to generate electricity and are therefore not exempt from sales tax under section 39-15-105(a)(iii)(A); and (3) the Board did not err when it held that PacifiCorp’s purchases of certain chemicals and catalysts do not constitute wholesale purchases exempt from taxation under section 39-15-105(a)(iii)(F). View "PacifiCorp, Inc. v. Department of Revenue" on Justia Law

The parties in this case disputed title to certain mineral interests underlying certain property. The dispute arose out of a 1911 Laramie County tax assessment against Union Pacific’s mineral interests in the property and the county’s subsequent tax sale and issuance of a tax deed for the property. Family Tree Corporation, which claimed title to portions of the minerals, filed a complaint for quiet title and declaratory judgment against Three Sisters LLC, which also claimed an ownership in the minerals, and Anardarko Land Corporation. The district court quieted title to Family Tree based upon the 1912 tax sale. Anadarko appealed, arguing that the 1911 tax assessment against the minerals was unconstitutional, and therefore, the resulting tax sale and deed were void. The Supreme Court affirmed after drawing the line between a tax assessment defect that will render a tax deed void and one that will render the tax deed viable, holding (1) the error in Laramie County’s tax assessment against the minerals at issue rendered the resulting tax deed voidable, not void; and (2) accordingly, Anadarko’s challenge to the validity of the tax deed was barred by the statute of limitations. View "Anadarko Land Corp. v. Family Tree Corp." on Justia Law

Pennaco Energy Inc. acquired mineral leases beneath a surface estate owned by Brett Sorenson, Trustee of the Brett L. Sorenson Trust. A surface damage and use agreement between the parties granted Pennaco access to and use of the land for exploration and production of minerals, and, in return, required Pennaco to pay for the damage to and use of the surface estate, and to reclaim the land once operations ended. When Pennaco refused to perform its obligations under the contract, Soreson brought this lawsuit. The jury rendered a verdict finding that Sorenson suffered more than $1 million in damages. The district court entered judgment on the jury’s verdict and also awarded Sorenson costs and attorney fees. The Supreme Court affirmed, holding that the district court did not err by (1) ruling that Pennaco remained liable under the surface damage and use agreement after assignment, and (2) using a 2.5 multiplier to enhance the lodestar amount in awarding attorney fees. View "Pennaco Energy, Inc. v. Sorenson" on Justia Law

Pennaco Energy, Inc. obtained oil and gas leases and made contracts with the surface landowners, who were predecessors of Appellees. The contracts granted Pennaco use of the landowners’ land during exploration and production under the mineral leases. After several years, Pennaco assigned its interest in its coal bed methane operation to CEP-M purchase, LLC, which re-assigned those interests to High Plains Gas, Inc. After the assignment, neither Pennaco nor the assignees made any required payments under the assignments, nor did they reclaim any of the land, as required under the agreements. Appellees sued Pennaco for breach of the agreements. The district court granted summary judgment in favor of Appellees. Pennaco appealed, arguing that the district court erred in concluding that Pennaco remained liable under the agreements even after the assignment. The Supreme Court affirmed, holding that because the agreements contained indications that Pennaco’s contractual obligations continued even after assignment and because there was no express clause that terminated Pennaco’s obligations upon assigning the agreements to a third party, Pennaco remained liable to Appellees to perform the covenants in the event its assignee defaulted. View "Pennaco Energy, Inc. v. KD Co., LLC" on Justia Law

Bowers Oil and Gas, Inc. (BOG) entered into a Gas Purchase Contract with Kinder Morgan Operating, L.P. (Kinder Morgan), pursuant to which Kinder Morgan agreed to purchase coal bed methane gas from certain of BOG's wells. Kinder Morgan transferred its interest in the Contract, and Kinder Morgan's successor eventually terminated the Contract pursuant to a provision that allowed either party to terminate if in the terminating party's sole opinion, the sale or purchase of the gas became unprofitable or uneconomical. BOG thereafter filed suit asserting claims for breach of contract and breach of the covenant of good faith and fair dealing. Following a bench trial, the district court found no contract breach or covenant breach and ruled in favor of Kinder Morgan and its successor. Upon review, the Supreme Court affirmed. The Court found no breach of contract in the successor's removal of the pipelines connecting BOG to the gas gathering system and that the Gas Purchase Contract was properly terminated for economic cause. Furthermore, the Court found no clear error in the district court's rejection of BOG's claim for breach of the implied covenant and fair dealing. View "Bowers Oil & Gas, Inc. v. DCP Douglas, LLC" on Justia Law

John and Minerva Sutherland entered into a mining lease granting Meridian Granite Company the right to conduct mining operations on the Sutherlands' property. A dispute developed between the Sutherlands and Meridian regarding the Sutherlands' obligation to pay taxes relating to the mineral production. The dispute led to litigation. The district court granted Meridian's motion for summary judgment, ruling that the Sutherlands were obligated to pay the disputed taxes. The Supreme Court affirmed, holding that the district court did not err in allowing Meridian to deduct ad valorem and severance taxes from payments to the Sutherlands when such tax payments were not required by the State, as the Sutherlands and Meridian agreed in the mining lease that the Sutherlands would pay the taxes. View "Sutherland v. Meridian Granite Co." on Justia Law

Appellant, Whitney Holding Corporation, challenged a decision of the district court quieting title in a certain mineral estate in favor of Appellees, Clarence and Peggy Terry. The Supreme Court affirmed, holding (1) the district court did not err in concluding that the parties intended, and the limited warranty deed conveying the property from Whitney to the Terrys reflected, that Whitney did not reserve a mineral interest in the property; (2) the district court properly determined that the deed was ambiguous and did not err in considering extrinsic evidence to interpret the deed; and (3) the Terrys' quiet title action was not barred by the statute of limitations. View "Whitney Holding Corp. v. Terry" on Justia Law