Justia Energy, Oil & Gas Law Opinion Summaries

Pattison Sand Company operated a sandstone mine in Iowa. After part of the mine roof collapsed near where a miner was working, the Mine Safety and Health Administration (MSHA) issued an order under the Federal Mine Safety and Health Act prohibiting any activity in much of the mine. Pattison challenged the order before the Federal Mine Safety and Health Review Commission. An ALJ determined that the order was valid and that the Commission lacked authority to modify it. Pattison moved for a temporary restraining order and preliminary injunction preventing MSHA from enforcing parts of the order. The federal district court denied relief. The Eighth Circuit Court of Appeals granted in part and denied in part Pattison's petition for review and affirmed the judgment of the district court, holding (1) substantial evidence supported the ALJ's determination that the roof fall was an accident within the meaning of the Act; (2) the ALJ's determination that he lacked the authority to modify the order was in error; and (3) the district court's conclusion that it lacked jurisdiction to consider the company's request for a temporary restraining order and preliminary injunction was not in error. View "Pattison Sand Co., LLC v. Fed. Mine Safety & Health Review Comm'n" on Justia Law

Two environmental groups (Petitioners) petitioned for review of a final rulemaking by the EPA that approved a revision to a California state plan to implement national ambient air quality standards for air pollutants. The revision required the South Coast Air Quality Management District to transfer credits to a soon-to-be-completed power plant named Sentinel. Petitioners alleged that the EPA committed procedural errors during the rulemaking process and that the substance of the revised state plan violated the Clean Air Act. Petitioners and the EPA agreed this case should be remanded because the EPA's final rule was invalid, so the only dispute was whether vacatur was appropriate. The Ninth Circuit Court of Appeals remanded without vacatur so the construction of the power plant could proceed without delay, as the power supply would otherwise be interrupted and the plant's operation was not authorized to commence without a new and valid EPA rule in place. View "Ca. Cmtys. Against Toxics v. EPA" on Justia Law

Joseph purchased the BP franchise in 2006 for $400,000. In 2009, Sasafrasnet purchased BP’s interests in the land and a Dealer Lease and Supply Agreement, becoming lessor and franchisor. The DLSA authorizes Sasafrasnet to terminate if Joseph fails to make payment according to EFT policy, causing a draft to be dishonored as NSF more than once in 12 months; Sasafrasnet is not obligated to extend credit, but did deliver fuel before collecting payment. There were several instances of NSF EFTs; Sasafrasnet began to require payment in advance. Later, Sasafrasnet allowed Joseph to resume paying by EFT within three days of delivery, but established a $2,500 penalty for any NSF and stated that pre-pay would resume if he incurred two more NSFs. There were additional NSFs, so that Joseph had incurred nine for amounts over $20,000 and three for amounts over $45,000. Sasafrasnet gave Joseph 90 days’ notice that it was terminating his franchise, listing the NSFs and failing scores on a mystery shopper inspection as bases for termination. Joseph sued under the Petroleum Marketing Practices Act, 15 U.S.C. 2801. The district court denied a preliminary injunction to prevent the termination. The Seventh Circuit reversed, holding that the statute requires additional findings.View "Joseph v. Sasafrasnet, LLC" on Justia Law

The Stockmans entered into an extension of their mineral lease with Chesapeake Louisiana, L.P. and received a $240,000 bonus. In May 2008, the Stockmans entered into a mineral lease with Petrohawk Properties, L.P. for a $1.45 million bonus. Petrohawk then dishonored the draft and executed a second mineral lease with the Stockmans, paying them a $1.7 million bonus. Chesapeake sued the Stockmans for breach of contract, and the parties settled at trial. The Stockmans then sued Petrohawk for fraud in obtaining the first mineral lease, and Chespeake sued Petrohawk for intentional interference with its contract with the Stockmans. The district court (1) found that Petrohawk procured the first mineral lease by fraud and rescinded the lease, (2) dismissed Chesapeake's tort claim, and (3) dismissed Petrohawk's claim for a return of its bonus money. The Fifth Circuit Court of Appeals affirmed, holding (1) Petrohawk obtained the first lease by fraud, and the district court did not err in rescinding the lease, awarding attorney's fees to the Stockmans; (2) the district court did not err in dismissing Petrohawk's counterclaim for the return of the lease bonus; and (3) the district court correctly dismissed Chespeake's intentional interference with a contract claim. View "Petrohawk Props., L.P. v. Chesapeake Louisiana, L.P." on Justia Law

Plaintiffs, successors in title to land located in Arkansas, brought a declaratory judgment action in Arkansas state court against AgriBank, FCB, seeking to quiet title to oil and gas rights that AgriBank held in Plaintiffs' land. AgriBank removed the case to federal district court. The district court granted AgriBank's motion to dismiss, identifying two bases on which to do so: (1) that a regulation promulgated by the Farm Credit Administration (FCA) specifically approved the sort of ownership interests held by AgriBank that Plaintiffs now attacked; and (2) that the challenge to AgriBank's oil and gas rights was based on a repealed act of Congress. The Eighth Circuit Court of Appeals affirmed, holding that the district court correctly dismissed the case under its first rationale, as the reservations at issue enjoyed the FCA's approval. View "Nixon v. AgriBank, FCB" on Justia Law

Orton filed a Chapter 7 petition. On Schedule A (realty), he listed his one-eighth interest in vacant land that is subject to an oil and gas lease, stating fair market value as $34,000 and claiming an exemption for $4,250 (1/8). On Schedule B (personal property), Orton listed his one-fourth interest in royalty interest in the oil and gas lease, assigning a fair market value of $1; no well has been drilled. On Schedule C (claimed exemptions), Orton claimed wildcard exemptions, 11 U.S.C. 522(d)(5), for $4,250 and $1. No party objected. The Trustee moved to close the case and to except Orton’s royalty interest from abandonment, preserving ability to recover any future royalties for the estate. Orton objected, claiming that he had successfully, permanently removed the assets from the estate, securing for himself future appreciation, free from creditors’ claims. The Bankruptcy Court held that the Trustee was entitled to pursue any future increase in value above the amount stated in Schedule C. The district court and Third Circuit affirmed. The Trustee, not the Debtor, is entitled to post-petition appreciation in value of estate assets that surpasses the amount exempted. Orton had exempted only an interest, not the asset itself, and was entitled to only the amount listed in Schedule C, not to future appreciation. View "In Re:Orton" on Justia Law

Respondent City of Concord appealed a superior court order that denied it summary judgment in favor of Petitioner EnergyNorth National Gas (d/b/a National Grid NH, or "National Grid"). The City argued that the trial court erroneously determined that RSA 231:185 (2009) and RSA 236:11 (2009) preempted the City's ordinance authorizing it to charge certain roadway fees. The issue between the parties arose from National Grid's desire to excavate certain streets to install, maintain or replace its underground pipes that delivered natural gas. The fees covered damage for damages arising from the excavation. Upon review, the Supreme Court concluded that granting summary judgment in favor of National Grid was in error. The City argued that its roadway fees are consistent with the pertinent statutes because they "cover[ ] maintenance costs to repair the roadway after it has been initially patched, which [are] used to restore the excavated roadway to the condition that existed prior to the excavation." The Court was not persuaded that when the legislature enacted the statutes at issue, it made any assumption or finding, implied or otherwise, as to whether repaving a paved excavated roadway restored the roadway's original life expectancy. The Court was thus left with a factual dispute whether patching an excavated roadway with new pavement diminished or restored its original life expectancy. Because of that "genuine issue of material fact," the Court remanded the case for further proceedings. View "EnergyNorth Natural Gas, Inc. v. City of Concord" on Justia Law

Defendant-Appellant and Cross-Appellee BP America Production Company (BP) appealed a judgment from a jury verdict in favor of Plaintiffs-Appellees and Cross-Appellants, a certified class of royalty and overriding royalty owners. The judgment included $9,740,973 in damages for failure to pay royalties consistent with the underlying leases and $3,443,372.40 in prejudgment interest (calculated at 15%). The class took issue with two aspects of BP's "netback" method for market-value-at-the-well contracts: its sales price for natural gas liquids (NGLs) at the tailgate and its processing cost. Specifically, the class complained that BP sold refined NGLs at the tailgate of the processing plant to an affiliate company at a discount (called an "affiliate transfer price"), and that BP, as co-owner of the plant, deducted an inflated processing fee, thereby lessening their royalty payments. Further, the class alleged BP breached the covenants of good faith and fair dealing in their contracts. BP's theory of the case was that there is a market for gas at the well, and that its netback method resulted in royalty payments in line with market values. BP unsuccessfully moved in limine to prohibit the class from introducing evidence regarding the royalty practices of ConocoPhillips ("COP"), co-owner of the processing plant with BP. Upon review, the Tenth Circuit concluded that disputed evidence of material fact on the market-value leases existed to preclude either party from judgment as a matter of law in their favor. Admission of the COP evidence was an abuse of district court's discretion and reversible error; the Tenth Circuit reversed for a new trial on that ground. On remand, the Court ordered the district court vacate the judgment entered on the jury's verdict and the prejudgment interest award, and provide an explanation of any ruling on the breach of the implied covenant of good faith and fair dealing. View "Abraham v. BP America Production Co." on Justia Law

In 2010, the EPA promulgated a final rule adopting a new, one-hour primary national ambient air quality standard (NAAQS) for nitrogen dioxide (NO2). The American Petroleum Institute, the Utility Air Regulatory Group, and the Interstate Natural Gas Association of America (collectively the API) petitioned for review of that rule, claiming the EPA, in adopting the NAAQS, was arbitrary and capricious and violated the Clean Air Act. The API also challenged a statement in the preamble to the final rule regarding the EPA's intended implementation of the NAAQS. The D.C. Circuit Court of Appeals (1) denied the petitions insofar as they challenged the EPA's adoption of the NAAQS, holding that the EPA's adoption of the NAAQS for NO2 was neither arbitrary or capricious nor in violation of the Clean Air Act; and (2) dismissed the portions of the petitions challenging the EPA's non-final statement regarding permitting in the preamble to the Final Rule, holding that it did not have jurisdiction to consider those portions of the petitions. View "Am. Petroleum Inst. v. EPA" on Justia Law

Pentonville Developers, Ltd. and Marblearch Trading, Ltd., two Cyprus oil brokerage companies, sued the Republic of Iraq for unilaterally terminating two contracts for the purchase and sale of Iraqi oil. The district court concluded it had subject matter jurisdiction notwithstanding Iraq's assertion of sovereign immunity under the Foreign Sovereign Immunities Act because the lawsuit fell within the "commercial exception" to that immunity. The Ninth Circuit Court of Appeals reversed, holding that because the lawsuit was not based upon commercial activity by Iraq in the United States, nor upon an act in connection with such commercial activity having a direct effect in the United States, the district court erred in denying Iraq's motion to dismiss for lack of subject matter jurisdiction. View "Terenkian v. Republic of Iraq " on Justia Law