Justia Energy, Oil & Gas Law Opinion Summaries

SPP, a regional transmission organization (RTO), filed with FERC revisions to its tariff that reflected an agreement with Integrated System entities to integrate their facilities. Pursuant to the requirements of section 205 of the Federal Power Act, 16 U.S.C. 824d, SPP filed with FERC revisions to its tariff that reflected the parties' agreement. FERC approved the revisions over the objections of Kansas. The DC Circuit denied Kansas' petition for review, holding that FERC accurately described the agreement as reciprocal; Kansas misread various precedents and the court rejected its contention that the arrangement violated critical norms of ratemaking; the court saw no basis for a claim of undue discrimination; and the court rejected Kansas' arguments regarding SPP's reliance on a study commissioned by the IS Parties. Finally, FERC did not abuse its discretion by deciding not to hold an evidentiary hearing on the disputed features of the record underlying its approval of the merger. View "State Corp. Commission of KS v. FERC" on Justia Law

AOPL petitioned for review of FERC's issuance of an order adopting the index formula to govern oil pipeline rates for the 2016 to 2021 period. The DC Circuit denied the petition for review, holding that there was no merit to AOPL's claim that FERC impermissibly relied solely on the middle 50 percent of pipeline cost-change data and failed to incorporate the middle 80 percent of cost-change data, and that FERC impermissibly used "Page 700" cost-of-service data to calculate the index level. The court held that the record makes it plain that the Commission adequately and reasonably explained its decision not to consider the middle 80 percent of pipelines' cost-change data; nothing in any of FERC's past index review orders bound the agency to use the middle 80 percent of pipelines' cost-change data; the Commission's rationale for utilizing the cost-of-service data from Page 700 was clear and reasonable; and there was nothing in the record to support AOPL's claim that FERC's decision to use Page 700 data indicates an unexplained shift in its measurement objective. View "Association of Oil Pipe Lines v. FERC" on Justia Law

Hess Corporation ("Hess") appealed the grant of summary judgment which held Sundance Oil and Gas, LLC ("Sundance") held the superior leasehold mineral interest in a property located in Mountrail County. Sundance and Hess both moved for summary judgment, each arguing they had a superior claim to the mineral interests. The district court determined the trust action was res judicata and granted partial summary judgment in favor of Sundance, quieting title to the leasehold interest. Although the district court entered an order for partial summary judgment, the parties stipulated to the remaining issues related to revenues and expenses, and the district court later entered a final judgment. On appeal, Hess argued: (1) the district court erred in applying res judicata to determine Sundance was a good-faith purchaser for value; (2) the district court erred in granting summary judgment in Sundance's favor because genuine disputes of material fact existed; and (3) the district court erred by concluding Sundance could obtain a superior lease for the same property without providing Hess actual notice of the trust action proceedings. After review, the North Dakota Supreme Court determined the district court improperly applied res judicata and failed to consider the factual issues raised by Hess: a district court may not use the findings in an unlocatable mineral owner trust action as res judicata in a subsequent quiet title action to resolve all factual disputes regarding whether a later purchaser was a good-faith purchaser for value. The judgment was reversed and the matter remanded for further proceedings. View "Sundance Oil and Gas, LLC v. Hess Corporation" on Justia Law

In 2011, OXY USA Inc. (“Oxy”), made a mistake that caused it to overpay its property taxes on oil and gas produced from leaseholds. Oxy failed to deduct certain costs it was entitled to deduct. By the time it realized the mistake, the protest period had expired. The company nonetheless contended it was entitled to abatement and refund of the overpayment pursuant to section 39-10-114(1)(a)(I)(A), C.R.S. (2017). The county board of commissioners maintained that the abatement-and-refund provision did not apply because Oxy was the sole source of the error. Relying on Colorado Supreme Court precedent, the court of appeals held that Oxy couldn't receive abatement and refund for overpayment due to its own mistake. The Supreme Court held section 39-10-114(1)(a)(I)(A) gave taxpayers the right to seek abatement and refund for erroneously or illegally levied taxes resulting from overvaluation caused solely by taxpayer mistake. Therefore, Oxy was entitled to abatement and refund for its overpayment of taxes in the tax year at issue in this appeal. View "OXY USA Inc. v. Mesa County Board of Commissioners" on Justia Law

The Supreme Court reversed the circuit court’s order invaliding the arbitration provision at issue in this case involving an oil and gas lease and remanded with directions that the case be dismissed and referred to arbitration.Petitioner and Respondents were parties to an oil and gas lease that included an arbitration provision. Respondents sued Petitioner, seeking to recover payments to which they claimed to be entitled under the lease and various other damages. Petitioner filed a motion to compel arbitration, relying on the arbitration provision in the lease. The circuit court denied Petitioner’s motion to compel arbitration, finding ambiguity in the lease’s arbitration provision. The Supreme Court reversed, holding (1) the circuit court erred in going outside of the provisions in the arbitration clause to find language to create an ambiguity; and (2) the arbitration provision was not ambiguous and therefore should be enforced. View "SWN Production Co. v. Long" on Justia Law

The 1977 deed at issue in this case was ambiguous and of such doubtful meaning that reasonable minds disagreed as to the deed’s intent, and therefore, the circuit court erred in finding the deed was clear and in finding that the grantors did not convey one-half interest in oil and gas beneath a tract of land in Marshall County to the grantee.In 2013, Plaintiffs filed a complaint against Defendants asserting that, in the 1977 deed, Plaintiffs retained ownership of the one-half undivided interest in the oil and gas and, therefore, Defendants trespassed on their oil and gas interest and engaged in conversion. Plaintiffs then amended the complaint to request a declaratory judgment interpreting the 1977 deed. The circuit court determined that the deed was clear and unambiguous and declared that Plaintiffs kept for themselves the one-half interest in the oil and gas. The Supreme Court reversed, holding that the circuit court erred in finding that the 1977 deed was unambiguous and in granting a declaratory judgment in favor of Plaintiffs. View "Gastar Exploration Inc. v. Rine" on Justia Law

Joan Hallin, John Hallin and Susan Bradford (collectively Hallin and Bradford) appeal from a judgment in favor of Inland Oil & Gas Corporation. In 2007, Hallin and Bradford each leased to Inland mineral interests they owned in 160 acres of land in Mountrail County. The leases provided Hallin and Bradford leased to Inland "all that certain tract of land situated in Mountrail County." Hallin and Bradford, along with members of their extended family, owned a fraction of the minerals in the entire 160 acres. On the basis of irregularities in the chain of title, it was unclear whether Hallin and Bradford collectively owned sixty net mineral acres or eighty net mineral acres when the parties executed the leases. Hallin and Bradford believed they owned sixty net mineral acres and their relatives owned sixty acres. When Hallin and Bradford executed the leases, they also received payment drafts for a rental bonus showing they each leased thirty acres to Inland. The leases provide royalty compensation based upon the number of net mineral acres. The North Dakota Supreme Court decided Hallin and Bradford collectively owned eighty net mineral acres and their relatives owned forty net mineral acres. Inland and Hallin and Bradford disagreed whether the leases covered all of Hallin and Bradford's mineral interests. Hallin and Bradford sued Inland, arguing they leased sixty acres and the remaining twenty acres were not leased. Inland argued Hallin and Bradford leased eighty acres because the leases cover all of their mineral interests. The district court granted summary judgment to Inland, concluding the leases were unambiguous and that "as a matter of law, the Hallins and Bradford leased to Inland whatever interest they had in the subject property at the time the leases were executed." Finding no reversible error in that judgment, the North Dakota Supreme Court affirmed. View "Hallin v. Inland Oil & Gas Corporation" on Justia Law

Plaintiff David Speed filed a petition asserting a putative class action against defendant JMA Energy Company, LLC. He alleged that JMA had willfully violated an Oklahoma statute that required payment of interest on delayed payment of revenue from oil and gas production. He further asserted that JMA fraudulently concealed from mineral-interest owners that it owed interest due under the statute, intending to pay only those who requested interest. JMA removed the case to the United States District Court for the Eastern District of Oklahoma, asserting that the district court had jurisdiction under the Class Action Fairness Act (CAFA - 28 U.S.C. 1332(d)). After conducting jurisdictional discovery, Speed filed an amended motion to remand the case to state court. The district court granted this motion, relying on an exception to CAFA that permitted a district court to decline to exercise jurisdiction over a class action meeting certain citizenship prerequisites “in the interests of justice and looking at the totality of the circumstances,” based on its consideration of six enumerated factors. On appeal JMA challenged the district court’s remand order. Because the district court properly considered the statutory factors and did not abuse its discretion by remanding to state court, the Tenth Circuit affirmed. View "Speed v. JMA Energy Company" on Justia Law

The Illinois Commerce Commission granted a certificate of public convenience and necessity to Rock Island for construction of a high voltage electric transmission line between O’Brien County, Iowa, and a converter station adjacent to Commonwealth Edison Company’s Grundy County, Illinois substation. Rock Island is a wholly owned subsidiary of Wind Line, which is a wholly owned subsidiary of Clean Line, which is owned in part by Grid America, a subsidiary of National Grid, which owns and operates more than 8600 miles of high-voltage transmission facilities. Rock Island has never constructed a high voltage transmission line and does not yet own, control, operate, or manage any plants, equipment, or property used or to be used in the transmission of electricity or for any other purpose related to utilities; it has an option to purchase real property in Grundy County. The appellate court reversed, holding that the Commission had no authority under the Public Utilities Act, 220 ILCS 5/1-101, to consider Rock Island’s application because the company did not qualify as a public utility under Illinois law. The Illinois Supreme Court affirmed. Whatever Rock Island’s motives for seeking a certificate of public necessity and convenience, it does not qualify as a public utility; eligibility for a certificate of public convenience and necessity unambiguously requires present ownership, management, or control of defined utility property or equipment. View "Illinois Landowners Alliance, NFP v. Illinois Commerce Commission" on Justia Law

Jeffrey Ware, Ph.D., was a University of Pennsylvania neuroscientist, studying the effects of radiation on biological organisms with the goal of better understanding how radiation affects astronauts while in orbit. Ware used cesium-137 irradiators to track the effects of low-level radiation on mice and rats. In 2010, Ware suffered a rare form of brain cancer, gliosarcoma. His widow, Boyer, claims gliosarcoma is associated with radiation exposure but produced no expert reports and that Ware’s cancer specifically resulted from radiation exposure that UPenn failed to properly monitor, protect against or warn of. Ware underwent chemotherapy and radiation at the University’s hospital. Boyer alleges that Ware was not given appropriate information about these treatments; that, given the advanced stage of his disease, they provided little benefit; and that a UPenn doctor enrolled Ware in a research study to investigate the effects of chemotherapy and radiation on brain cancer patients without his knowing consent. The Third Circuit affirmed the application of the Price-Anderson Act, 42 U.S.C. 2011, and its remedy-limiting provisions to Boyer's suit. The Act gives federal courts jurisdiction to resolve a broad set of claims involving liability for physical harm arising from nuclear radiation. Boyer’s case is within the Act’s reach. View "Estate of Ware v. Hospital of the University of Pennsylvania" on Justia Law