Justia Energy, Oil & Gas Law Opinion Summaries

Robert Madrid worked for Petitioner Public Service Company of New Mexico (PNM) as a bill collector. "Angered by a particularly obstinate customer," and without permission, Madrid drove to the customer's home and disconnected the customer's gas service. It would later be determined that the customer was not a customer of PNM. PNM fired Madrid. Madrid responded by filing a grievance against PNM with his union, arguing that Madrid's termination violated its collective bargaining agreement with the Company. In making its argument, the union hypothesized that PNM treated Madrid more harshly than other employees guilty of similar conduct. The union sent PNM three discovery requests for documents to prove its hypothesis. Those requests became the subject of the appeal before the Tenth Circuit, as PNM refused to comply. An ALJ determined that PNM had engaged in an unfair labor practice, and ordered the Company to comply with the discovery requests. The National Labor Relations board adopted the ALJ's decision. PNM appealed the Board's order, and the Board cross-petitioned to have its order enforced. Upon review, the Tenth Circuit was unpersuaded by PNM's arguments on appeal, and affirmed the Board's decision. View "Public Service CO of NM v. NLRB" on Justia Law

This case stemmed from a dispute over the proper calculation of royalty payments on state oil and gas leases. Over the years, the Legislature has enacted several versions of the statutory oil and gas lease, and Lessees have entered into “hundreds” of oil and gas leases with the State. Specifically, the New Mexico Legislature enacted statutory oil and gas leases in 1919, 1925, 1927, 1929, 1931, 1945, 1947 and 1984. This appeal concerned the royalty clauses contained in the 1931 and the 1947 statutory lease forms. Both the 1931 lease and 1947 lease specified that the payment of royalty was to be calculated as a percentage of the “net proceeds” resulting from the sale of gas. During 2005 and 2006 Commissioner audited ConocoPhillips Company and Burlington Resources Oil & Gas Company’s royalty payments. Following the Audit, Commissioner notified Lessees that they had been underpaying their royalty obligations and issued them assessments for the underpayment. The Commissioner claimed that pursuant to the terms of the statutory lease forms Lessees could not deduct the post-production costs necessary to prepare the gas for the commercial market when calculating their royalty payments. Commissioner claimed that the improper deductions for post-production costs resulted in ConocoPhillips underpaying royalties by approximately $18.9 million and Burlington underpaying by approximately $5.6 million. In response to Commissioner’s audit and assessments, Lessees filed a complaint in the district court seeking a declaration that Commissioner’s assessment of additional royalty constituted a deprivation of due process, an unconstitutional impairment of contract, and breach of contract. In addition, Lessees claimed that Commissioner had exceeded his constitutional and statutory powers by issuing the assessments and had effectively usurped legislative power by seeking royalty payments under calculation methods not approved by the Legislature. In response, Commissioner alleged a host of counterclaims for breach of contract, breach of the implied covenant of good faith and fair dealing, and breach of the implied covenant to market. This appeal pertained to three orders granting summary judgment on behalf of Lessees and a fourth order denying Commissioner’s motion for reconsideration of the district court’s previous dismissal of his counterclaim for breach of the implied covenant to market. In the first order, the district court granted Lessees’ motion for summary judgment. Upon review of the several orders and claims before the Supreme Court on appeal, the Court affirmed the trial court's grant of summary judgment. View "ConocoPhillips Co. v. Lyons" on Justia Law

The property at the center of this dispute was located in San Juan County with productive oil and gas wells thereon. While ownership of the land was the ultimate question the parties sought to resolve in the underlying lawsuit, the issue on appeal was narrower: whether, as a matter of law, a joint tenancy in realty may be terminated and converted into a tenancy in common by a mutual course of conduct between the owners that demonstrates their intent to hold the property as tenants in common. Upon review of the matter, the Supreme Court held that such a course of conduct may effectively terminate a joint tenancy. Accordingly, the Court reversed the Court of Appeals and remanded the case to the district court for further proceedings. View "Edwin Smith, LLC v. Synergy Operating, LLC" on Justia Law

Plaintiff-Appellant Devon Energy Production Company, L.P. appealed a district court's judgment which dismissed Devon’s declaratory-judgment action against Defendant-Appellee Mosaic Potash Carlsbad, Inc. for lack of subject-matter jurisdiction. More specifically, under Federal Rule of Civil Procedure 57, Devon sought a declaratory judgment that federal law completely preempted Mosaic’s anticipated state-law claims emanating from Devon’s unauthorized drilling in a federally managed area of New Mexico known as the "Potash Area," and that the only remedies available to Mosaic were derived from the federal administrative and judicial remedies of the Administrative Procedure Act and certain regulatory provisions of the U.S. Department of the Interior that govern oil, gas, and potash leasing and development within the Potash Area. Devon alleged that the district court had federal-question jurisdiction over its declaratory-judgment action under 28 U.S.C. 1331. The district court concluded that there was no federal-question jurisdiction to support Devon’s action and dismissed its complaint, and subsequently denied Devon’s motion to alter or amend the judgment under Federal Rule of Civil Procedure 59(e). Upon review of the district court's judgment, the Tenth Circuit affirmed. View "Devon Energy Production Co. v. Mosiac Potash Carlsbad, Inc." on Justia Law

The Council of the City of New Orleans and the Louisiana Public Service Commission petitioned for review of an order of the Federal Energy Regulatory Commission (FERC) allowing two companies to withdraw from a regional energy system agreement without paying exit fees. FERC concluded that there was nothing in the agreement that compelled payments prior to withdrawal. FERC found that, under the terms of the agreement, (1) withdrawing companies were not obligated to pay exit fees, and (2) once companies left the agreement, they no longer needed to continue to make rough equalization payments. The D.C. Circuit Court of Appeals denied the petitions for review, holding that FERC's findings were reasonable. View "Council of City of New Orleans v. FERC" on Justia Law

Underlying this appeal was the case of Center for Biological Diversity v. Interior, in which the Court vacated a five-year program for expanding leases for oil and gas development in the coast of Alaska. The U.S. Department of Interior, which approved the program, then issued a new five-year program. Here, the Native Village of Point Hope, Alaska, petitioned the D.C. Circuit Court of Appeals for reimbursement of attorneys' fees and costs it incurred in this matter. The D.C. Circuit allowed reimbursement in the amount of $192,293 in fees and $8,493 in costs, for a total reimbursement of $200,786. View "Ctr. for Biological Diversity v. DOI" on Justia Law

Shell imported petroleum products, 1993-1994, upon which custom duties, taxes, and other fees were paid. During the same period, Shell exported drawback-eligible substitute finished petroleum derivatives. In 1995-1996, substitution drawback claims were filed with the U.S. Customs and Border Protection on Shell’s behalf. Generally, Customs provides a drawback of 99% of any duty, tax, or fee imposed under federal law upon entry or importation if the merchandise (or a commercially interchangeable substitute) is subsequently exported or destroyed under Customs supervision and not used within the U.S. before exportation or destruction, 19 U.S.C. 1313(j),(p). Drawback claims must be filed within three years of exportation. During the time of Shell’s imports, drawback eligibility of Harbor Maintenance Tax and Environmental Tax payments, which Shell now seeks, were heavily disputed. Shell was found not to have included an express request for HMT and ET in the “net claim” figure. In 1997, after the three-year period for the filing of drawback claims had expired Shell filed protests with Customs, seeking drawback as to HMT and ET payments. Customs denied Shell’s protests. The Court of International Trade found the claims time-barred. The Federal Circuit affirmed, holding that 1999 and 2004 statutory amendments did not change Shell’s position. View "Shell Oil Co. v. United States" on Justia Law

Plaintiff-Appellant WildEarth Guardians sued Public Service Company of Colorado (PSCo) pursuant to the Clean Air Act's citizen-suit provisions seeking civil penalties and an injunction to halt construction for a new coal-fired power plant in Pueblo, Colorado. WildEarth's principal argument was that PSCo failed to obtain a valid construction permit. Although the project initially complied with all applicable federal and state laws when construction commenced in 2005, the regulatory landscape changed in 2008. A decision of the D.C. Circuit required regulators to impose additional Clean Air Act requirements upon new power plant construction. While litigation was pending, PSCo finished constructing the plant and came into compliance with the new regulatory regime. The district court dismissed the suit, reasoning that to find a Clean Air violation under the circumstances would be to give unwarranted retroactive effect to the decision of the D.C. Circuit. The question before the Tenth Circuit was whether WildEarth's allegations that PSCo violated the Act became moot. Upon review, the Tenth Circuit concluded that "under the unusual circumstances of this case . . . PSCo's violations could nto reasonably be expected to recur, and thus no deterrent effect could be achieved." Accordingly, the Court dismissed the appeal as moot. View "WildEarth Guardians v. Public Service Company" on Justia Law

Watson’s father, Hickle, worked for the Department of Energy, 1954 to 1962. Hickle died of Hodgkin’s disease in 1964. Congress enacted the Energy Employees Occupational Illness Compensation Program Act in 2000 to compensate for illnesses caused by exposure to radiation and other toxic substances while working for the Department of Energy. Covered employees or eligible survivors may receive compensation in a lump sum payment; under specific circumstances, a covered employee’s child is also eligible, 42 U.S.C. 7385s-3(d)(2). When her father died, Watson was 19 years old, not a full-time student; she lived with her parents, worked as a waitress, relied on her parents for support, and was listed as a dependent on their income tax returns. She sought survivor benefits in 2002 and received a lump-sum payment of $150,000. She later claimed further compensation as a “covered child,” under a different section of the Act, arguing that she was “incapable of self-support” at the time of Hickle’s death. The Department of Labor denied her claim. Before the district court, Watson challenged the interpretation of “incapable of self-support,” claiming that the Department impermissibly required a showing of physical or mental incapability. The district court denied her motion for summary judgment. The Sixth Circuit affirmed. View "Watson v. Solis" on Justia Law

Banks worked as a coal miner for 17 years and smoked about one pack of cigarettes per day for 38 years. His employment ended in 1991. After two unsuccessful attempts, in 2003, Banks filed a claim for benefits under the Black Lung Benefits Act, which provides benefits to coal miners who become disabled due to pneumoconiosis, 30 U.S.C. 901. An ALJ found that Banks had shown a change in his condition and that he suffered from legal pneumoconiosis which substantially contributed to his total disability. Banks was awarded benefits and the Benefits Review Board affirmed. The Sixth Circuit affirmed, adopting the regulatory interpretation urged by the Director of the Office of Workers’ Compensation Programs. The ALJ relied on reasoned medical opinions. View "Cumberland River Coal Co. v. Banks" on Justia Law