Justia U.S. 8th Circuit Court of Appeals Opinion Summaries

Articles Posted in Energy, Oil & Gas Law
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Northern filed a quiet-title action in federal court against EOG over a dispute regarding the parties' competing interests in mineral rights in North Dakota. Northern and EOG both lease oil and gas rights, and their lessors litigated a similar matter in state court. The district court found that Northern was in privity with its lessor, holding that the lessors' case barred Northern's claims.The Eighth Circuit reversed the district court's grant of EOG's motion to dismiss under principles of res judicata, holding that no privity exists between Northern and its lessor because Northern acquired its lease before the lessors' case. The court applied Gerrity Bakken, LLC v. Oasis Petroleum N. Am., LLC, 915 N.W.2d 677 (N.D. 2018), and held that the privity doctrine cannot be applied if the rights to property were acquired by the person sought to be bound before the adjudication. View "Northern Oil and Gas, Inc. v. EOG Resources, Inc." on Justia Law

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SPP, a Regional Transmission Organization (RTO), is authorized by the Commission to provide electric transmission services across a multi-state region. Pursuant to SPP's license-plate rate design, SPP is divided into different zones, and customers in each zone pay rates based on the cost of transmission facilities in that zone.The Eighth Circuit denied a petition for review brought by NPPD of FERC's approval of SPP's placement of Tri-State into Zone 17. The court held that substantial evidence supported the Commission's finding that Tri-State's placement into Zone 17 was just and reasonable. In this case, because the Commission stated plausible and articulable reasons for why the costs and benefits were comparable in this case, the court could not say that its cost-causation analysis was arbitrary and capricious. Furthermore, the Commission did not act arbitrarily and capriciously in deciding that Tri-State's placement into Zone 17 was just and reasonable. View "Nebraska Public Power District v. Federal Energy Regulatory Commission" on Justia Law

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Pitchblack and Whitetail filed suit against Hess, alleging that their overriding royalty interests in a number of oil and gas leases should continue to burden various top leases that Hess acquired over the subject leases.The Eighth Circuit affirmed the district court's grant of summary judgment for Hess, holding that Hess did not owe Pitchblack or Whitetail any fiduciary duty that would have required Hess to treat the top leases as extensions or renewals. Based on North Dakota law and the lack of any fiduciary duties expressed in the parties' agreement, the court held that Hess did not owe Pitchblack and Whitetail any fiduciary duty to extend or renew the subject leases. Consequently, Pitchblack and Whitetail's argument that the top leases were extensions or renewals of the subject leases based on a fiduciary duty fails. The court also held that the district court correctly concluded that the top leases were not extensions or renewals of the subject leases. Therefore, because the top leases were new leases, the extension or renewal clause did not attach the overriding royalty interests to the top leases. The court held that the top leases were thus not burdened by the overriding royalty interests. View "Hess Bakken Investments II, LLC v. Whitetail Wave" on Justia Law

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Suits over oil and gas leases on allotted trust lands are governed by federal law, not tribal law, and the tribal court lacks jurisdiction over the nonmember oil and gas companies. This appeal involved a dispute over the practice of flaring natural gas from oil wells, and at issue was the scope of Native American tribal court authority over nonmembers. The Eighth Circuit affirmed the district court's grant of a preliminary injunction enjoining the tribal court plaintiffs and tribal court judicial officials and held that the district court correctly rejected the tribal court officials' argument that this suit was barred by tribal sovereign immunity.The court also held that the district court did not abuse its discretion in granting the preliminary injunction because the oil and gas companies are likely to prevail on the merits. In this case, the district court correctly concluded that the oil and gas companies exhausted their tribal court remedies by moving to dismiss the case for lack of jurisdiction and appealing the issue to the MHA Nation Supreme Court; the district court correctly concluded that the tribal court lacked jurisdiction over the oil and gas companies; and the balance of the remaining preliminary injunction factors, along with the oil and gas companies' strong likelihood of success on the merits, showed that the district court did not abuse its discretion by granting the preliminary injunction. View "Kodiak Oil & Gas (USA) Inc. v. Burr" on Justia Law

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The Eighth Circuit affirmed the district court's grant of summary judgment in favor of OGT in an action brought by the oil field construction company to quiet a pipeline title based on defendant's ineligibility to claim a lien under North Dakota Century Code 35-24-04. The court agreed with the district court that defendant was an employee, rather than an independent contractor, and that section 35-24-04 does not confer lien rights upon employees.In this case, the factors that indicated that defendant was an employee include, among other things, that defendant earned a weekly salary that OGT paid him regardless of the number of hours, amount of work, or number of projects he completed; defendant completed a W-4 to indicate his tax withholdings; OGT withheld and paid employment taxes on defendant's wages and reported his income to him and the IRS on a Form W-2; OGT offered defendant regular employment benefits; and he worked full-time for OGT and no one else. View "Oil & Gas Transfer LLC v. Karr" on Justia Law

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The Eighth Circuit affirmed the district court's grant of summary judgment to defendant in an action alleging claims of negligent misrepresentation, unjust enrichment, and denial of equitable relief. The court held that the district court did not err in granting defendant's summary judgment motion on the negligent misrepresentation claim because Lonesome Dove had not alleged any specific damage from the misrepresentation; the district court did not err by granting summary judgment as to the unjust enrichment claim because Lonesome Dove failed to present specific facts to illustrate any benefit to defendant other than the list of things in the contract; the district court did not abuse its discretion by denying Lonesome Dove equitable relief where Lonesome Dove had an adequate remedy at law in this case; and the district court did not err by denying Lonesome Dove's motion for a new trial where the verdict was not against the clear weight of the evidence. View "Lonesome Dove Petroleum, Inc. v. Holt" on Justia Law

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Smoky II filed a breach of contract suit against the city when it did not receive payment from the city on invoices related to curtailed energy (wind energy that was not actually produced because the producer was directed to reduce production). The Eighth Circuit affirmed the district court's judgment and held that the parties' contract provided that the city could be billed for economic curtailments; the district court did not err in holding the city liable for certain charges that it found to be "timely-billed;" the plain language of the Renewable Energy Purchase Agreement (REPA) supported the district court's interpretation of the meaning of "Emergency Curtailment;" the trial evidence clearly supported the district court's rejection of the city's theory regarding over-allocation of energy; and Smoky II waived the issue of substantial performance. View "Smoky Hills Wind Project II v. Independence, Missouri" on Justia Law

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Great Lakes filed suit against ESML for breach of contract. ESML later filed a motion to dismiss based on lack of subject matter jurisdiction, but the district court denied the motion. The case proceeded to trial and judgment was entered for Great Lakes. The court agreed with the district court that the Natural Gas Act (NGA), 15 U.S.C. 717u, does not create an express cause of action under which Great Lakes may sue for breach of contract; the NGA also does not create an implied cause of action where there is no indication of legislative intent to create a federal cause of action displacing traditional state law breach of contract causes of action; and assuming that the district court correctly held that federal issues were “necessarily raised” and “actually disputed,” the court concluded that the federal issues in this case are not “substantial,” and the federal courts cannot exercise federal question jurisdiction “without disturbing any congressionally approved balance of federal and state judicial responsibilities.” Accordingly, the court vacated and remanded with instructions to dismiss for lack of jurisdiction. View "Great Lakes Gas Transmission v. Essar Steel Minnesota LLC" on Justia Law

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Plaintiffs filed suit against the state claiming, inter alia, that the prohibitions in the Minnesota Next Generation Energy Act, Minn. Stat. 216H.03, subd. 3(2) and (3), violate the Commerce Clause. The statute is intended to reduce statewide power sector carbon dioxide emissions by prohibiting utilities from meeting Minnesota demand with electricity generated by a new large energy facility in a transaction that will contribute to or increase statewide power sector carbon dioxide emissions. The district court granted plaintiffs summary judgment and a permanent injunction. The court concluded that plaintiffs meet the Article III standing requirement where Plaintiff Basin can demonstrate a probable economic injury resulting from governmental action; plaintiffs' claims are ripe for judicial review because the issues are predominately legal, and the challenged prohibitions are currently causing hardship by interfering with the ability of plaintiffs such as Basin to plan, invest in, and conduct their business operations; the district court did not err in declining to abstain under Railroad Commission of Texas v. Pullman Co.; the district court correctly concluded that the challenged prohibitions have the practical effect of controlling conduct beyond the boundaries of Minnesota; the statute has extraterritorial reach and will impose Minnesota’s policy of increasing the cost of electricity by restricting use of the currently most cost-efficient sources of generating capacity from prohibited sources anywhere in the grid, absent Minnesota regulatory approval or the dismantling of the federally encouraged and approved MISO transmission system; Minnesota may not do this without the approval of Congress; and the district court did not err by enjoining the defendant state officials from enforcing the prohibitions. The court dismissed plaintiffs' cross-appeal as moot. View "North Dakota v. Heydinger" on Justia Law

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Plaintiff, individually and as surviving spouse of Arlie Walls, filed suit against Petrohawk alleging claims related to an oil and gas lease. The court concluded that Petrohawk's failure to pay royalties in a timely manner did not substantially defeat the purpose of the contract and therefore does not constitute a material breach of contract; plaintiff waived the breaches with respect to all of the assignments except the Petrohawk-Exxon assignment; the district court did not err in concluding that plaintiff unreasonably withheld consent to the assignment from Petrohawk to Exxon; the language of the lease does not support plaintiff's argument that the lease holds Petrohawk liable for breaches of previous assignees, specifically Alta; and plaintiff is not entitled to statutory penalties because she failed to make factual allegations of Petrohawk's willfulness or bad faith. Accordingly, the court affirmed the district court's judgment. View "Walls v. Petrohawk Properties, LP" on Justia Law