Justia Energy, Oil & Gas Law Opinion Summaries

This case stemmed from the explosion and sinking of Transocean's Deepwater Horizon in April 2010. At issue were the obligations of Transocean's primary and excess-liability insurers to cover BP's pollution-related liabilities deriving from the ensuing oil spill in the Gulf of Mexico. Because the court, applying Texas law, found that the umbrella policies between the Insurers and Transocean did not impose any relevant limitation upon the extent to which BP was an additional insured, and because the additional insured provision in the Drilling Contract was separate from and additional to the indemnity provisions therein, the court found BP was entitled to coverage under each of Transocean's policies as an additional insured as a matter of law. The court reversed the judgment of the district court and remanded the case. View "In Re: Deepwater Horizon" on Justia Law

In 2000 the SEC charged violation of securities law. The court appointed a receiver to distribute assets among victims of the $31 million fraud. The receiver found that assets had been used to acquire oil and gas leases. SonCo claimed an interest in the leases. In 2010, the district court issued an “agreed order,” requiring SonCo to pay $600,000 for quitclaim assignment of the leases and release of claims in Canadian litigation. Alco operated the wells and had posted a $250,000 cash bond with the Texas Railroad Commission. Alco could get its $250,000 back if replaced by new operator that posted an equivalent bond. The $250,000 had come, in part, from defrauded investors. Alco was incurring environmental liabilities, with little prospect of offsetting revenues. SonCo was to replace Alco, but failed to so, after multiple extensions. The district judge held SonCo in civil contempt, ordered it to return the leases, and allowed the receiver to keep the $600,000. The Seventh Circuit upheld the finding of civil contempt. Following remand, the Seventh Circuit affirmed the sanction; considering additional environmental compliance costs and receivership fees, a plausible estimate of the harm would be $2 million. ”SonCo will be courting additional sanctions, of increasing severity, if it does not desist forthwith from its obstructionist tactics.” View "Sec. & Exch. Comm'n v. First Choice Mgmt Servs., Inc." on Justia Law

The Pilgrim Nuclear Power Station in Massachusetts submitted an environmental impact statement (EIS) with its relicensing application in 2006. Before relicensing occurred, an earthquake and tsunami occurred off the coast of Japan, which hit the Fukushima Daiichi nuclear power plant. Less than three months later, Massachusetts moved to admit a contention and to reopen the Pilgrim record, arguing that Fukushima revealed new and significant information that the environmental impact analysis needed to address. The Atomic Safety and Licensing Board denied Massachusetts's motion. The Nuclear Regulatory Commission (NRC) denied the Commonwealth's petition for review, rejecting the Commonwealth's claims that the EIS was inadequate in light of the damage to Fukushima. The Commonwealth also petitioned for review from the NRC's vote to renew the license of the Pilgrim station. The First Circuit Court of Appeals denied the petition for review, holding that the NRC did not act arbitrarily or capriciously by (1) failing to require supplementation of the EIS in light of Fukushima; and (2) declining to hear Massachusetts' rulemaking petition and to complete all the post-Fukushima review before granting the license. View "Massachusetts v. U.S. Nuclear Regulatory Comm'n" on Justia Law

Wabash is a power generation cooperative. Northeastern purchases electricity from Wabash and resells it. In 1977, they entered into a contract: Northeastern agreed to purchase electricity from Wabash for 40 years at rates to be set by the Wabash board of directors “[s]ubject to the approval of the Public Service Commission of Indiana.” Revised rates would not be effective unless approved by the “applicable regulatory authorities,” and the federal Rural Electrification Administration. In 2012 Northeastern sought a state court declaratory judgment that Wabash breached the contract by taking action in 2004 that had the effect of transferring regulation of its rates from the Indiana Commission to the Federal Energy Regulatory Commission. Wabash removed the case under 28 U.S.C. § 1441(a), arguing that the claim arises under the Federal Power Act, 16 U.S.C. 791a. The district court denied remand and granted a preliminary injunction. The Seventh Circuit vacated, holding that federal courts lack subject matter jurisdiction. Northeastern’s claim is limited to construction of the contract and does not necessarily raise a question of federal law. While Northeastern may eventually use a favorable state court judgment to seek permission to terminate its obligations under the tariff filed with FERC,that cannot be achieved in this suit View "NE Rural Elec. Membership Corp. v. Wabash Valley Power Assoc." on Justia Law

Lehigh appealed the district court's award of damages to plaintiffs under the Petroleum Marketing Practices Act (PMPA), 15 U.S.C. 2801-2841. At issue was whether a franchisor could be held under the PMPA for failing to provide notice to a "trial franchisee" prior to termination of its franchise. The court held that the PMPA provided a right of action, both to "full" and "trial" franchisees, when a franchisor failed properly to notify it prior to terminating the franchise. The court also concluded that the district court did not abuse its discretion in awarding plaintiffs compensatory damages, punitive damages, attorney's fees and costs, and interest. View "Jimico Enterprises, Inc. v. Lehigh Gas Corp." on Justia Law

This case stemmed from the interaction between the NRC's regular decommissioning process of a licensed nuclear facility and a statutory provision (section 2021 of the Atomic Energy Act, 42 U.S.C. 2021) authorizing the NRC to transfer regulatory authority over classes of nuclear materials located within a state to the government of that state. In regards to the basic standards for decommissioning, the court's inability to understand the key regulatory materials purportedly guiding the agency exercise of control over decommissioning required a remand. The court found no legal error in the remainder of the Commission's Order. View "Shieldalloy Metallurgical Corp. v. Nuclear Regulatory Comm., et al" on Justia Law

In this case, FERC reviewed rates resulting from an auction process and concluded that though the rates were not contract rates, they warranted the Mobile-Sierra doctrine presumption anyway. The NEPGA and State Petitioners petitioned for review. Because the NEPGA lacked standing, the court dismissed its petition for review. The court rejected the merits of the State Petitioners' arguments where FERC did not exceed the bounds of its considerable discretion by adopting the public interest standard for deciding whether a given Forward Capacity Auction rate was just and reasonable. Accordingly, the court denied the State Petitioners' petition for review. View "New England Power Generators Assoc., Inc. v. FERC" on Justia Law

This case stemmed from Chevron's involvement in litigation over the alleged environmental contamination of oil fields in Ecuador. Ecuador sought discovery from John Connor and GSI Environmental, his company, for use in a foreign arbitration against Chevron. During the course of extended litigation with Ecuador, Chevron, an intervenor in the district court, benefited repeatedly by arguing against Ecuador and others that the arbitration was a "foreign or international tribunal." Because Chevron's previous positions were inconsistent with its current argument, judicial estoppel was appropriate to make discovery under 28 U.S.C. 1782 available for Ecuador. Accordingly, the court reversed and remanded for determination of the scope of discovery. View "Republic of Ecuador, et al v. Connor, et al" on Justia Law

Petitioners, HPBA and NPGA, sought review of two recently promulgated rules that they believed expanded the Energy Policy and Conservation Act (EPCA), 42 U.S.C. 6201 et seq., to include decorative fireplaces. The court agreed with the HPBA that the DOE's interpretation of decorative fireplaces as "Direct heating equipment," a specifically enumerated class of covered products under the Act, contravened the EPCA's statutory scheme and, in turn, clear congressional intent. Accordingly, the court vacated and remanded for further proceedings. View "Hearth, Patio & Barbecue Assoc. v. Dept. of Energy" on Justia Law

Columbia Gas disagrees with the Singhs over the scope of an existing pipeline right-of-way. Columbia suit in federal court to enjoin the Singhs and their tenant from engaging in activity that Columbia believed could lead to violations of Columbia’s duties under federal laws regulating natural gas service and pipeline safety. Although the cause of action appeared to be an Ohio interference-with-easement claim, Columbia’s complaint referred to the Natural Gas Act, 15 U.S.C. 717–717w, as a basis for federal jurisdiction. Without explicitly addressing jurisdiction, the district court held a status conference at which the parties reached a settlement. When the Singhs refused to comply with Columbia’s understanding of the settlement, the district court granted Columbia’s motion to enforce the settlement. The Sixth Circuit vacated, holding that the district court did not have jurisdiction over this property dispute between nondiverse parties. Columbia’s complaint neither asserted a federal cause of action nor showed that a substantial federal interest was implicated by its state-law claim. View "Columbia Gas Transmission, LLC v. Singh" on Justia Law