Justia Energy, Oil & Gas Law Opinion Summaries

Trans-Western filed an amended complaint in federal district court asserting claims against U.S. Gypsum for breach of an oil and gas lease and breach of the covenant of quiet enjoyment. The district court found that U.S. Gypsum had wrongfully rescinded the lease and that the rescission constituted a breach of contract and a breach of the covenant of quiet enjoyment. The court awarded nominal damages of one dollar to Trans-Western. The parties appealed. The Tenth Circuit Court of Appeals certified to the Supreme Court the question of how to measure expectation damages for the breach of an oil and gas lease. The Supreme Court answered (1) expectation damages for the breach of an oil and gas lease are measured in much the same way as expectation damages for the breach of any other contract; (2) damages may include general and consequential damages; and (3) trial courts may allow the use of post-breach evidence to help establish and measure expectation damages. View "Trans-Western Petroleum, Inc. v. U.S. Gypsum Co." on Justia Law

Dominion obtained necessary certificates for transmission lines to connect Dominion’s recently-approved Wise County power plant with an existing Russell County substation. In 2008, Dominion offered Hylton $19,100 to purchase a 7.88-acre easement. Hylton owned 354 acres across 20 contiguous and two non-contiguous tracts. He owned the surface and mineral rights of some tracts and only the mineral rights of others. Dominion included an appraisal, acknowledging that, according to Hylton, two major coal seams run through or near the property and that Hylton’s ability to sell or lease those mineral rights might be damaged. The appraisal did not consider mineral rights in determining fair market value. The parties signed an agreement granting Dominion the right to enter and construct the transmission line. Dominion filed its petition for condemnation, limited to the surface use of Hylton’s property and moved to prohibit Hylton from presenting evidence of “the separate value of coal,” damage to tracts not taken, and “damages for duplicative or inconsistent claims.” Hylton later moved to dismiss, arguing that Dominion’s pre-petition offer to purchase was not a bona fide offer, under Code 25.1-204, so that Dominion had failed to meet jurisdictional requirements for condemnation. The trial court dismissed and awarded Hylton attorneys’ fees. The Supreme Court of Virginia reversed the dismissal and the denial of Dominion’s motion in limine with regard to evidence related to the separate value of the coal and the potential surface mine. Because the issue of whether the unity of lands doctrine applies with respect to neighboring lands, not part of the taking, is a question of fact, denying the motion on that issue was appropriate. View "Va. Elec. & Power Co. v. Hylton" on Justia Law

Plaintiffs filed suit against the state claiming, inter alia, that the prohibitions in the Minnesota Next Generation Energy Act, Minn. Stat. 216H.03, subd. 3(2) and (3), violate the Commerce Clause. The statute is intended to reduce statewide power sector carbon dioxide emissions by prohibiting utilities from meeting Minnesota demand with electricity generated by a new large energy facility in a transaction that will contribute to or increase statewide power sector carbon dioxide emissions. The district court granted plaintiffs summary judgment and a permanent injunction. The court concluded that plaintiffs meet the Article III standing requirement where Plaintiff Basin can demonstrate a probable economic injury resulting from governmental action; plaintiffs' claims are ripe for judicial review because the issues are predominately legal, and the challenged prohibitions are currently causing hardship by interfering with the ability of plaintiffs such as Basin to plan, invest in, and conduct their business operations; the district court did not err in declining to abstain under Railroad Commission of Texas v. Pullman Co.; the district court correctly concluded that the challenged prohibitions have the practical effect of controlling conduct beyond the boundaries of Minnesota; the statute has extraterritorial reach and will impose Minnesota’s policy of increasing the cost of electricity by restricting use of the currently most cost-efficient sources of generating capacity from prohibited sources anywhere in the grid, absent Minnesota regulatory approval or the dismantling of the federally encouraged and approved MISO transmission system; Minnesota may not do this without the approval of Congress; and the district court did not err by enjoining the defendant state officials from enforcing the prohibitions. The court dismissed plaintiffs' cross-appeal as moot. View "North Dakota v. Heydinger" on Justia Law

Parties to an agreement regarding an area of mutual interest for the purposes of oil and gas exploration sought to determine their respective rights under the agreement. The agreement gave the respondents in this case the right to participate in wells in futuro. The petitioners urged that the provision violated the rule against perpetuities. The district court agreed and granted judgment to the petitioners. The Court of Civil Appeals affirmed in part and reversed in part remanded the matter for further proceedings. The issues this case presented for the Supreme Court's review centered on whether a clause in an agreement giving a limited liability company the right to participate in all future wells on unleased property violated Article II, Section 32 of the Oklahoma Constitution prohibiting perpetuities, and whether a limited liability company was a "life in being." The Court answered the first question in the affirmative and the second question in the negative, finding that the district court did not err in granting a motion to dismiss based on these two questions. View "American Natural Resources, LLC v. Eagle Rock Energy Partners, L.P." on Justia Law

Department of Environmental Protection (DEP) regulations require that those deemed to be liable after a spill of hazardous materials within a specified radius of a public water supply undertake cleanup and monitoring to ensure the spill does not pose a danger to that water supply, 310 Code Mass. Regs. 40.0801, 40.0810, 40.0993(3)(a), 40.1030(2)(e). A 2007 modification exempts "oil" from some requirements when specific conditions are met, 310 Code Mass. Regs. 40.0924(2)(b)(3)(a). Peterborough owns a now-vacant Athol property, within a protection area, where it operated a gasoline station for more than 10 years. In 1994, a release of leaded gasoline from a subterranean gasoline storage tank was detected in soil on the site. DEP required Peterborough to undertake supervised cleanup and monitoring activities. In 2008, after the oil exemption was established, Peterborough submitted a revised plan, stating that further remediation was not required because the entirety of the spill fell within the exemption's definition of "oil." DEP responded that the meaning of "oil" in the exemption does not include gasoline additives such as lead, but refers only to petroleum hydrocarbons naturally occurring in oils, so that a spill of leaded gasoline could not be completely excluded from further remediation. The trial court, on summary judgment, and the Massachusetts Supreme Judicial Court, upheld the DEP interpretation of the regulation as reasonable. View "Peterborough Oil Co., LLC v. Dep't of Envtl. Prot." on Justia Law

Sarah Vogel appealed a district court judgment dismissing without prejudice her complaint against Marathon Oil Company. Marathon operated the Elk USA 11-17H well in Mountrail County. The well began producing in 2011 and continued through at least January 2014. Vogel owned mineral interests and received royalties from the oil or gas produced and sold from the well. Vogel, individually and on behalf of those similarly situated, sued Marathon seeking declaratory relief as well as money damages for failure to pay royalties on flared gas. Vogel argued her claims should not have been dismissed by the district court because she had a private right of action for violations of the statute restricting the flaring of gas produced with crude oil from an oil well, N.D.C.C. 38-08-06.4, and she was not required to exhaust administrative remedies. Finding no reversible error, the Supreme Court affirmed the district court. View "Vogel v. Marathon Oil Corporation" on Justia Law

Netzer owns the 496 patent, entitled “Process for the Coproduction of Benzene from Refinery Sources and Ethylene by Steam Cracking,” which describes a process for the coproduction of ethylene and purified benzene from refinery mixtures. The district court entered summary judgment of noninfringement. The court did not formally construe the claims, but, implicitly agreed with defendant (Shell) that “fractionating” does not include extraction. The court found no literal infringement, reasoning that “Netzer’s method does not include extraction and does not yield benzene of 99.9% purity” and that “[t]o infringe, Shell would have to eliminate the extraction step and still produce benzene purified to at least 80%.” The court also found no infringement under the doctrine of equivalents because Netzer is barred by “specific exclusion, prosecution-history estoppel, and prior art.” The Federal Circuit affirmed; no reasonable jury would find that the accused process performs substantially the same function in substantially the same way to obtain substantially the same result. View "David Netzer Consulting, LLC v. Shell Oil Co." on Justia Law

The issue this interlocutory appeal presented for the Vermont Supreme Court's review centered on whether 12 V.S.A. 462 created an exemption from the general six-year limitation for Vermont’s claims against a host of defendants for generalized injury to state waters as a whole due to groundwater contamination from gasoline additives. On the basis of the statute of limitations, the trial court dismissed the State’s claims insofar as they were predicated on generalized injury to state waters as a whole. On appeal, the State argued that section 462 exempted the State’s claims from the statute of limitations, and, alternatively, that the State’s claims arising under 10 V.S.A. 1390, a statute that established a state policy that the groundwater resources of the state are held in trust for the public, were not time barred because that statute became effective less than six years before the State filed its complaint. The Supreme Court affirmed. View "Vermont v. Atlantic Richfield Company, et al." on Justia Law

The PSC approved the recovery of FPL's costs incurred through its joint venture with an oil and natural gas company to engage in the acquisition, exploration, drilling, and development of natural gas wells in Oklahoma. The court agreed with appellants that the PSC lacks the authority to allow FPL to recover the capital investment and operations costs of its partnership in the Woodford gas reserves through the rates it charges consumers. Because the PSC exceeded its statutory authority when approving recovery of FPL’s costs and investment in the Woodford Project, the court reversed the judgment. View "Citizens of the State of Florida v. Art Graham, etc." on Justia Law

FutureGen was created to research and develop near-zero emissions coal technology and sought to use carbon capture and storage to develop the world’s first near-zero emissions coal power plant. The proposed retrofitted “clean coal” electric energy generating facility, known as “FutureGen 2.0,” was to be located in Meredosia, Illinois, and scheduled to begin operating in 2017. To secure private investment for FutureGen 2.0, the Illinois Commerce Commission issued an order finding that it has the authority to force public utility companies and smaller, privately owned and competitively operated Area Retail Electric Suppliers (ARES) to purchase all of FutureGen 2.0’s electrical output over a 20-year term. The appellate court affirmed the order. In 2015, while appeal was pending, the U.S. Department of Energy suspended funding for the FutureGen 2.0 project. The FutureGen Alliance board of directors approved a resolution in January 2016 ceasing all FutureGen 2.0 project development efforts and indicated its intention to terminate the sourcing agreements. The Illinois Supreme Court dismissed the appeal as moot, vacating the decision of the appellate court. View "Commonwealth Edison Co. v. Ill. Commerce Comm'n" on Justia Law