Justia Energy, Oil & Gas Law Opinion Summaries

Based on an agreement, an oilfield operator was authorized to charge certain costs against revenues prior to paying the oilfield owners. After a dispute arose, an auditor examined the oilfield operator's costs charged to the oilfield owners and found approximately $1 million as being unsubstantiated and, therefore, impermissibly charged to the owners by the operator. The arbitrator reached a different conclusion regarding what charges were permissible and awarded the owners approximately $1.6 million. Satisfied with the arbitrator's decision, the oilfield brought an action in the district court to confirm the award. The oilfield operator, however, moved to vacate the award. The operator argued that the arbitrator improperly considered certain employment documents and that the arbitration was limited in scope by the auditor's findings of the unsubstantiated charges. The district court confirmed the award and denied the operator's motion. The court of appeal affirmed, with one judge dissenting. The issue this case presented for the Supreme Court's review as whether an accountant, serving as an arbitrator, exceeded his arbitral authority. Finding that the arbitrator acted pursuant to the authority lawfully and contractually vested in him by the parties, the Supreme Court affirmed. View "Mack Energy Co. v. Expert Oil & Gas, LLC" on Justia Law

Power Fuels, operator of a facility that receives, blends, stores, and delivers coals for a power plant located across the road, petitioned for review of the Commission's final order, challenging the Secretary's assignment of jurisdiction to the MSHA, rather than to the nonspecialized OSHA. The court held that the Secretary permissibly concluded that a facility that blends coal for a nearby power plant was subject to the Federal Mine Safety and Health Act of 1977, 30 U.S.C. 802(h)(1)(C), (i). Therefore, the MSHA's assertion of jurisdiction was proper because the Mine Act covers this kind of activity. Accordingly, the court denied the petition for review. View "Power Fuels, LLC v. Federal Mine Safety & Health" on Justia Law

In 1979, plaintiff Morristown Associates purchased commercial property located in Morristown. The property contained a strip-mall-style shopping center known as Morristown Plaza. Among the tenants was Plaza Cleaners, a dry cleaning business owned at the time by Robert Herring. Herring and his wife had entered into a lease with the property's previous owner, Morris Center Associates, in 1976. Due to construction, Herring was unable to occupy and operate Plaza Cleaners until 1978. At some point before moving in, Herring installed a steam boiler in a room at the rear of the leased space and an underground storage tank (UST) for fuel to operate the boiler. In 1985, Herring sold Plaza Cleaners to defendants Edward and Amy Hsi. The Hsis owned the business until 1998 when it was sold to current owner and third-party defendant, Byung Lee. In August 2003, a monitoring of a well installed near Plaza Cleaner's UST revealed fuel oil contamination. A subsequent investigation revealed that although the UST was intact, the fill and vent pipes were severely deteriorated, with large holes along a significant portion of their lengths. Plaintiff's experts concluded that those holes had developed as early as 1988 and, since that time, oil had been leaking from the pipes each time the tank was filled. Each of the named oil company defendants in this case allegedly supplied fuel oil to Plaza Cleaners at various times between 1988 and 2003. The issue in this appeal was whether the general six-year statute of limitations contained in N.J.S.A. 2A:14-1 applied to private claims for contribution made pursuant to the New Jersey Spill Compensation and Control Act, N.J.S.A. 58:10-23.11f(a)(2)(a). Based on the plain language of the Spill Act, reinforced by its legislative history, the New Jersey Supreme Court held that N.J.S.A. 2A:14-1 s six-year statute of limitations was not applicable to Spill Act contribution claims. The Court therefore rejected the contrary determination of the Appellate Division and reversed and remanded this case to the Appellate Division for its consideration of other issues raised on appeal that were unaddressed. View "Morristown Associates v. Grant Oil Co." on Justia Law

In 2013, Duke Energy Carolinas filed an application with the North Carolina Utilities Commission requesting authority to adjust and increase its North Carolina retail electric service rates. The Commission entered an order granting a $234,480,000 annual retail revenue increase, approving a 10.2 percent return on equity (ROE), and authorizing the use the single coincident peak (“1CP”) cost-of-service methodology. The Supreme Court affirmed, holding (1) the Commission made sufficient findings regarding the impact of changing economic conditions upon customers, and these findings were supported by competent, material, and substantial evidence in view of the entire record; (2) the use of 1CP did not unreasonably discriminate against residential customers; and (3) no improper costs were included in the Commission’s order. View "State ex rel. Utils. Comm'n v. Cooper" on Justia Law

In 2006, Tellus Operating Group, LLC, sought to integrate the interests of various owners for the purpose of drilling a well unit in Jefferson Davis County. In accordance with its statutory duty to make a good-faith effort to negotiate the voluntary integration of the owners’ interests on reasonable terms, Tellus mailed option forms to the owners in June and July of 2006. In this case, the issue this case presented for the Supreme Court's review was a challenge to a Mississippi Oil and Gas Board pooling order force-integrating various owners’ interests in a proposed drilling unit. After review, the Court held that the Board’s order was supported by substantial evidence. The Court also found that one owner’s attempt to voluntarily integrate his interest within twenty days of the Board’s pooling order did not satisfy Section 53-3-7(2)(g)(iii). View "Tellus Operating Group, LLC v. Maxwell Energy, Inc." on Justia Law

In 2012, after auditing Cloud Peak Energy Resources, LLC’s Montana Coal Tax payments for years 2005-2007, the Department levied a deficiency assessment for additional taxes owing from sales involving non-arm’s length (NAL) agreements. Cloud Peak filed a complaint alleging that the Department’s methodology for determining market value was illegal and that it had also illegally assessed taxes on coal additives for the years 2005-2007. The district court (1) held in Cloud Peak’s favor on the first issue, concluding that the market value of coal sold under NAL agreements is determined by comparing its price with that of coal sold under arm’s length contracts negotiated in a similar timeframe; and (2) ruled in the Department’s favor on the issue regarding additives. The Supreme Court affirmed in part and reversed in part, holding that the district court (1) correctly found that market value is properly based upon similarly negotiated contracts, but the additional language included in the order was inappropriate; and (2) did not err in holding that coal additives used from 2005-2007 are subject to Montana Coal Taxes. View "Cloud Peak Energy Res., Inc. v. Dep’t of Revenue" on Justia Law

L.B. 1161, which was passed in 2012, allows major oil pipeline carriers to bypass the regulatory procedures of the Public Service Commission, instead allowing them to obtain approval from the Governor to exercise the power of eminent domain for building a pipeline in Nebraska. Appellees, a group of landowners, filed a complaint alleging that the bill violated the state Constitution’s equal protection, due process, and separation of powers provisions, as well as the Constitution’s prohibition of special legislation. The district court determined that L.B. 1161 was unconstitutional. Four members of the Supreme Court - a majority of its seven members - held that Appellees had standing to challenge the constitutionality of the bill and that the legislation was unconstitutional. However, because five judges of the Court did not vote on the constitutionality of the bill, the Court held that L.B. must stand by default. View "Thompson v. Heineman" on Justia Law

Bill Head, who owns and operates the Silver Spur Truck Stop in Pharr, Texas, hired Petroleum Solutions, Inc. to manufacture and install an underground fuel system. After the discovery that a major diesel-fuel release leak had occurred, Head sued Petroleum Solutions for its resulting damages. Petroleum Solutions filed a third-party petition against Titeflex, Inc., the alleged manufacturer of a component part incorporated into the fuel system, claiming indemnity and contribution. Titeflex filed a counterclaim against Petroleum Solutions for statutory indemnity. The trial court rendered judgment in favor of Head and in favor of Titeflex. The court of appeals affirmed. The Supreme Court (1) reversed as to Head’s claims against Petroleum Solutions, holding that the trial court abused its discretion by charging the jury with a spoliation instruction and striking Petroleum Solutions’ defenses, and the abuse of discretion was harmful; and (2) affirmed as to Titeflex’s indemnity claim, holding that Titeflex was entitled to statutory indemnity from Petroleum Solutions and that any error with respect to the indemnity claim was harmless. View "Petroleum Solutions, Inc. v. Head" on Justia Law

In 2011, Cahill Seeds, Inc. (Cahill) began planning the construction of a new seed washing plant and submitted requests for electric service to Montana-Dakota Utilities (MDU) and Sheridan Electric Co-op, Inc. MDU subsequently upgraded its transmission and distribution systems near Cahill, which allowed MDU to provide three-phase Wye power to Cahill. MDU then began providing three-way Wye power to Cahill. In 2013, Sheridan filed a complaint alleging that MDU violated the Montana Territorial Integrity Act (MTIA) when it extended power to Cahill. The district court found that Sheridan had the right to serve Cahill under the priority provisions of the MTIA. Specifically, the court found that the 1.33 mile distance from Sheridan’s three-phase Wye transmission line to Cahill gave Sheridan priority over MDU, whose three-phase Wye line was 6.5 miles away. The Supreme Court affirmed, holding that Mont. Code Ann. 69-5-105(1) unambiguously granted priority to Sheridan because it had the line nearest to Cahill and the distribution system capacity to serve Cahill. View "Sheridan Elec. Coop, Inc. v. MT-Dak Utils." on Justia Law

Duke Energy Carolinas (Duke) filed an application with the North Carolina Utilities Commission requesting authority to increase its North Carolina retail electric services rates and asking that the rates be established using a return on equity (ROE) of 11.5 percent. Duke subsequently stipulated to an ROE of 10.5 percent. The Commission entered a Rate Order approving the revenue increase and ROE contained in the stipulation. The Attorney General appealed. The Supreme Court reversed. On remand, the Commission concluded that the Rate Order was supported by the evidence and was reasonable in light of the stipulation as a whole. The Supreme Court affirmed, holding that the Commission’s order authorizing a 10.5 percent ROE for Duke contained sufficient findings of fact to demonstrate that the order was supported by competent, material, and substantial evidence in view of the entire record. View "State ex rel Utils. Comm'n v. Cooper" on Justia Law