Justia Energy, Oil & Gas Law Opinion Summaries

The City of Newkirk and Kay Electric Cooperative both provide electricity to Oklahoma consumers. "When a city acts as a market participant it generally has to play by the same rules as everyone else. It can't abuse its monopoly power or conspire to suppress competition. Except sometimes it can. If the city can show that its parent state authorized it to upend normal competition [. . . ] the city enjoys immunity from federal antitrust liability. The problem for the City of Newkirk in this case is that the state has done no such thing." Kay sued Newkirk alleging that the City engaged in unlawful tying and attempted monopolization in violation of the Sherman Act, 15 U.S.C. 1,2. The district court refused to allow the case to proceed, granting Newkirk's motion to dismiss after it found the City "immune" from liability as a matter of law. Upon review, the Tenth Circuit found that the state did not authorize Newkirk to enter the local electricity market as it did in this case. The Court reversed the district court and remanded the case for further proceedings. View "Kay Electric Cooperative v. City of Newkirk" on Justia Law

Plaintiff filed a complaint against defendant, seeking indemnity and/or contribution based on the damage defendant allegedly caused through gross negligence in removing plaintiff's vessel from a coral reef. At issue was whether the district court properly denied defendant's motion to compel arbitration of the dispute under the Federal Arbitration Act (FAA), 9 U.S.C. 1 et seq., where defendant alleged that the district court erred in refusing to apply English arbitrability law. The court held that based on the Supreme Court's reasoning in First Options of Chicago, Inc. v. Kaplan, courts should apply non-federal arbitrability law only if there was clear and unmistakable evidence that the parties intended to apply such non-federal law. Because there was no clear and unmistakable evidence in this case, federal arbitrability law applied. Under federal arbitrability law, the court's decisions in Mediterranean Enterprises, Inc. v. Ssangyong Construction Co. and Tracer Research Corp. v. National Environmental Services, Co., mandated a narrow interpretation of a clause providing for arbitration of all disputes "arising under" an agreement. Under this narrow interpretation, the present dispute was not arbitrable. Therefore, the court affirmed the district court's judgment. View "Cape Flattery Ltd. v. Titan Maritime, LLC" on Justia Law

This case involved two related oil and gas mineral lease disputes that were jointly tried. At issue was whether limitations barred the Marshalls' (respondents and lessors) fraud claim against BP America Production Co., et al. (the lessee and operator), and whether Vaquillas Ranch Co., Ltd., et al. (lessors) lost title by adverse possession after Wagner Oil Co. (successors-in-interest) succeeded to BP's interests, took over the operations, and produced and paid Vaquillas royalties for nearly twenty years. The court held that because the Marshalls' injury was not inherently undiscoverable and BP's fraudulent representations about its good faith efforts to develop the well could have been discovered with reasonable diligence before limitations expired, neither the discovery rule nor fraudulent concealment extended limitations. Accordingly, the Marshalls' fraud claims against BP were time-barred. The court further held that by paying a clearly labeled royalty to Vaquillas, Wagner sufficiently asserted its intent to oust Vaquillas to acquire the lease by adverse possession. View "BP America Prod. Co., et al. v. Marshall, et al." on Justia Law

The Public Service Commission (PSC) approved Great Plain Energy's acquisition of Aquila, a Missouri utility company. Before approval was granted, Praxair, AG Processing, and Sedalia Industrial Energy Users' Association (collectively, Praxair) intervened. During evidentiary hearings, Great Plains, Aquila, and a subsidiary of Great Plains filed a motion to limit the scope of the proceedings, seeking to preclude any evidence as to their gift and gratuity policies. The regulatory law judge granted the motion, finding the evidence was wholly irrelevant to the merger. After the merger was approved, Praxair and the Office of Public Counsel filed petitions for writs of review. The circuit court affirmed the regulatory law judge's order. After opinion by the court of appeals, the Supreme Court granted transfer. The Court affirmed, holding (1) while the evidence as to Great Plains' gift policy should have been admitted, its exclusion was not prejudicial as the gift policy could not have substantially impacted the weight of the evidence evaluated to approve the merger; and (2) although certain PSC commissioners who heard the merger application had been subject to ex parte contact with executives from Great Plains, Public Counsel did not overcome the presumption that the PSC acted impartially. View "State ex rel. Praxair, Inc. v. Mo. Pub. Serv. Comm'n " on Justia Law

Appellants, owners of interstate natural gas pipelines subject to a 25% ad valorem tax under Louisiana Constitution article 7, section 18, brought and won a state court suit alleging certain intrastate pipelines were unconstitutionally given more favorable tax treatment by being taxed only 15% from 1994-2003. At issue was whether the state court's revaluation process violated the Due Process, Equal Protection, and Commerce Clauses, via 42 U.S.C. 1983, where that court ordered appellants' tax liability to be recalculated under the same fair-market-value determination process to which the intrastate pipelines were subjected. The court held that the district court properly dismissed appellants' suit because their federal claims were barred by the Tax Injunction Act, 28 U.S.C. 1341, which deprived the federal courts of jurisdiction over suits that sought to interfere with the administration of state tax systems so long as the state provided an adequate procedural vehicle for raising the claims and where appellants have raised their claims in state court and the Louisiana courts did not cease to provide a plain, speedy, or efficient remedy for appellants' injuries. Accordingly, the district court properly granted defendants' motion to dismiss. View "ANR Pipeline Co., et al. v. Louisiana Tax Comm'n, et al." on Justia Law

The Sierra Club and several related parties brought this action against the U.S. Army Corps of Engineers (the Corps) seeking to set aside a Clean Water Act, 33 U.S.C. 1251 et seq., permit (the section 404 permit) the Corps had issued to the Southwestern Electric Power Company (SWEPCO) which planned to construct a new power plant. SWEPCO subsequently appealed the preliminary injunctions ordered by the district court, arguing that the district court lacked subject matter jurisdiction and that the district court abused its discretion in granting the preliminary injunction. The court held that the district court did not err in concluding that the Sierra Club and Hunting Club had Article III standing. The court also held that plaintiffs have shown a likelihood of success where there was ample evidence in the record to show that plaintiffs were likely to succeed on at least three of their claims; that there was a likelihood of irreparable harm; that the balance of harms weighed in favor of an injunction; and that the public interest that might be injured by a preliminary injunction did not outweigh the public interest that would be served by the injunction. Accordingly, the court affirmed the preliminary injunction. View "Sierra Club, et al. v. U.S. Army Corps of Engineers, et al.; Hempstead County Hunting Club, Inc. v. Southwestern Elec. Power Co., et al." on Justia Law

Appellants Marion Energy (Marion) and the State of Utah School and Institutional Trust Lands Administration (the Trust) leased and owned oil and gas deposits that lay underneath property owned by the KFJ Ranch Partnership (KFJ). To build a road to access their deposits, Marion and the Trust sought to condemn a portion of KFJ's land. To do so, they relied on a statute that permits the exercise of eminent domain for the construction of roads to facilitate the working of "mineral deposits." At issue was whether the phrase "mineral deposits" as used in the statute was intended by the legislature to encompass oil and gas deposits. The district court granted KFJ's motion to dismiss, concluding that the statute did not provide authority to take land for roads to access oil and gas deposits. On appeal, the Supreme Court affirmed, holding (1) the statute is ambiguous as to whether "mineral deposits" includes oil and gas, and (2) because the Court strictly construes an ambiguous statute purporting to grant the power of eminent domain against the condemning party, Marion and the Trust were not authorized by the statute to condemn KFJ's land.

Petitioners sought review of a decision by the Nuclear Regulatory Commission (NRC) under the Atomic Energy Act, 42 U.S.C. 2201 et seq., to renew the operating license of the Duane Arnold Energy Center (DAEC) in Palo, Iowa. The court held that the NRC order at issue was entered on December 16, 2010, and the petition for review was not filed until February 28, 2011. Therefore, the petition was filed 14 days late and accordingly, the court dismissed the petition for review as untimely.

This case stemmed from a contract between the Indonesian government and the Exxon Mobil Corporation (Exxon), a United States corporation, and several of its wholly owned subsidiaries where Exxon operated a large natural gas extraction and processing facility in the Aceh province. Plaintiffs were fifteen Indonesian villagers. Eleven villagers filed a complaint in 2001 alleging that Exxon's security forces committed murder, torture, sexual assault, battery, and false imprisonment in violation of the Alien Tort Statute (ATS) and the Torture Victim Protection Act (TVPA), 28 U.S.C. 1350, and various common law torts. Four villagers alleged that in 2007, Exxon committed various common law torts. All plaintiffs alleged that Exxon took actions both in the United States and at its facility in the Aceh province that resulted in their injuries. Plaintiffs challenged the subsequent dismissal of their claims and Exxon filed a cross-appeal, inter alia, raising corporate immunity for the first time. The court concluded that aiding and abetting liability was well established under the ATS. The court further concluded that neither the text, history, nor purpose of the ATS supported corporate immunity for torts based on heinous conduct allegedly committed by its agents in violation of the law of nations. The court affirmed the dismissal of the TVPA claims in view of recent precedent of the court. The court concluded, however, that Exxon's objections to justiciability were unpersuasive and that the district court erred in ruling that plaintiffs lacked prudential standing to bring their non-federal tort claims and in the choice of law determination. The court finally concluded that Exxon's challenge to the diversity of parties in the complaint at issue was to be resolved initially by the district court. Therefore, the court affirmed the dismissal of plaintiffs' TVPA claims, reversed the dismissal of the ATS claims at issue, along with plaintiffs' non-federal tort claims, and remanded the cases to the district court.

This appeal challenged a final order of the Public Utility Commission (PUC) in a true-up proceeding under Chapter 39 of the Utilities Code. AEP Texas Central Co. (AEP), a transmission and distribution utility, and CPL Retail Energy, L.P., its affiliated retail electric provider, initiated a proceeding under section 39.262 to finalize stranded costs and other true-up amounts and the state, several municipalities, and several other parties who were consumers of electricity or represent consumer interests (collectively, consumers), intervened in the proceeding. The issues before the court concern market value, net book value (NBV), and the capacity auction true-up. The court held that where, as here, the utility managed to sell its stake in a nuclear plant, the court saw no error in using the sale of assets method, which was, if anything, the preferred method for valuing generation assets. The court also held that it saw no error in PUC's approach where the interest rate AEP received on its stranded costs was grossed up. The court further held that section 39.262 unambiguously specified that the statutory capacity auction price, not some other blended price the PUC found more appropriate, must be used in calculating the capacity auction true-up amount. On remand, the PUC must recalculate the capacity auction true-up in a manner consistent with the court's opinion in State v. PUC, rather than relying on the proxy price it selected in the true-up proceeding. Accordingly, the court granted the petition for review, affirming in part and reversing in part.