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

The Swecker farm in Iowa has a wind generator and is a qualifying power production facility certified by the Federal Energy Regulatory Commission (FERC). The Sweckers sell surplus electric energy to Midland Power Cooperative at a rate established by the Iowa Utilities Board (IUB), implementing FERC rules and regulations, 16 U.S.C. 824a-3(f). For many years, the Sweckers and Midland have litigated rate disputes. The district court dismissed their current suit against Midland and its primary supplier, Central Iowa Power Cooperative (CIPCO), seeking declaratory and injunctive relief requiring Midland “to purchase available energy from plaintiffs . . . at Midland’s full avoided cost, rather than CIPCO’s avoided cost.” The Eighth Circuit affirmed. FERC’s interpretation is controlling and forecloses the contrary interpretation of 18 C.F.R. 292.303(d) urged by the Sweckers. View "Swecker v. Midland Power Coop." on Justia Law

Phillips owns an underground petroleum pipeline, built in 1930. A 1963 report stated that 100 barrels of leaded gasoline had leaked beneath West Alton, Missouri, and not been recovered. The leak was repaired. In 2002 a West Alton resident noticed a petroleum odor in his home. He contacted Phillips, which investigated. West Alton has no municipal water. Testing on the owner’s well disclosed benzene, a gasoline additive and carcinogen, at three times allowable limits. Phillips purchased the property, and two nearby homes and, with the Missouri Department of Natural Resources (MDNR), established a remediation plan. In 2006 Phillips demolished the homes, removed 4000 cubic yards of soil, and set up wells to monitor for chemicals of concern (COCs). Phillips volunteered to provide precautionary bottled water to 50 residents near the site. Sampling of other wells had not shown COCs above allowable limits. MDNR requested that Phillips test the wells of each family receiving bottled water before ending its water supply program. Phillips chose instead to continue distributing bottled water. Most of the recipients are within 0.25 miles of the contamination site. In 2011 nearby landowners sued, alleging nuisance, on the theory that possible pockets of contamination still exist. The Eighth Circuit reversed class certification, noting the absence of evidence showing class members were commonly affected by contamination, View "Smith v. ConocoPhillips Pipe Line Co." on Justia Law

Knickel approached Macquarie Bank about a loan to develop North Dakota oil and gas leases, providing confidential information about leased acreage that he had assembled over 10 years. Macquarie entered agreements with Knickel’s companies, LexMac and Novus. His other company, Lexar was not a party. Macquarie acquired a mortgage lien and perfected security interest in the leases and in their extensions or renewals. Royalties and confidential information—reserves reports on the acreage, seismic data, and geologic maps—also served as collateral. The companies defaulted. Because of the lack of development or production, many leases were set to expire. Knickel claims he agreed to renew only leases that included automatic extensions. Macquarie claims that Knickel promised to renew all leases serving as collateral in the names of LexMac and Novus. Upon the expiration of the leases without automatic extensions, Knickel entered into new leases in the name of Lexar, for development with LexMac and Novus, since they owned the confidential information. A foreclosure judgment entered, declaring that LexMac and Novus’s interest in the leases would be sold to satisfy the debt: $5,296,252.29,. Marquarie filed notice of lis pendens on Lexar’s leases, leased adjoining acreage, used the confidential information to find a buyer, and sold the leases at a profit of about $7,000,000. Marquarie filed claims of deceit, fraud, and promissory estoppel, and alleged that the corporate veil of the companies should be pierced to hold Knickel personally liable. The defendants counterclaimed misappropriation of trade secrets and unlawful interference with business. The Eighth Circuit affirmed summary judgment on all but one claim and judgment that Macquarie had misappropriated trade secrets. View "Macquarie Bank Ltd. v. Knickel" on Justia Law

Lion Oil, a small Arkansas refinery, petitioned the Environmental Protection Agency for an exemption from the 2013 Renewable Fuel Standard program, 42 U.S.C. 7545(o), under which refineries must blend their share of renewable fuel or buy credits from those who exceed blending requirements. Congress exempted “small” refineries—75,000 barrels of crude oil or less per day—from RFS obligations until 2011. The exemption can be extended. Lion cited disruption to a key supply pipeline and argued that RFS compliance would cause disproportionate economic hardship. Before EPA considered the petition, the Department of Energy determined that Lion Oil did not score high enough on the viability index to show disproportionate economic hardship. EPA “independently” analyzed the pipeline disruption and Lion Oil’s blending capacity, projected RFS-compliance costs, and financial position. EPA denied the petition. The Eighth Circuit affirmed, first holding that it could consider the matter because EPA had not “published” a determination of nationwide scope or effect. The denial was not arbitrary or inadequately explained. View "Lion Oil Co. v. Envt'l Protction Agency" on Justia Law

The City of Osceola purchases wholesale energy from Entergy Arkansas under an agreement filed with and approved by the Federal Energy Regulatory Commission (FERC). Osceola sued Entergy in Arkansas state court, seeking reimbursement for charges allegedly in violation of their agreement. Entergy removed the case to the federal district court which denied Osceola's motion to remand, granted summary judgment to the defendant energy providers, and dismissed the case. The Eighth Circuit affirmed, finding that FERC has primary jurisdiction to determine the appropriate treatment of the bandwidth payments under the parties' agreement. View "City of Osceola v. Entergy Ark., Inc." on Justia Law

Plaintiffs own mineral interests in Chalybeat Springs and granted 21 oil and gas leases based on those interests. EnerQuest and BP America are the lessees. The property interests in Chalybeat, including the leases at issue, are subject to a Unit Agreement that establishes how the oil and gas extracted from certain formations will be divided and provides for a unit operator with the exclusive right to develop the oil and gas resources described in the Unit Agreement. In the late 1990s, PetroQuest became the operator of the Chalybeat Unit. Unhappy with the level of extraction, lessors filed suit against EnerQuest and BP, seeking partial cancellation of the oil and gas leases on the ground that EnerQuest and BP breached implied covenants in the leases to develop the oil and gas minerals. The district court granted the companies’ motion for summary judgment, reasoning that the lessors had not provided EnerQuest and BP with required notice and opportunity to cure a breach. The Eighth Circuit affirmed, rejecting an argument that the plaintiffs’ earlier effort to dissolve the Chalybeat Unit constituted notice. View "Lewis v. Enerquest Oil & Gas, LLC" on Justia Law

Shields and Wilson are Indians with interests on the Bakken Oil Shale Formation in the Fort Berthold Reservation in North Dakota, allotted to them under the Dawes Act of 1887. Such land is held in trust by the government, but may be leased by allottees. Shields and Wilson leased oil and gas mining rights on their allotments to companies and affiliated individuals who won a sealed bid auction conducted by the Board of Indian Affairs in 2007. After the auction, the women agreed to terms with the winning bidders, the BIA approved the leases, and the winning bidders sold them for a large profit. Shields and Wilson filed a putative class action, claiming that the government had breached its fiduciary duty by approving the leases for the oil and gas mining rights, and that the bidders aided, abetted, and induced the government to breach that duty. The district court concluded that the United States was a required party which could not be joined, but without which the action could not proceed in equity and good conscience, and dismissed. The Eighth Circuit affirmed. The United States enjoys sovereign immunity for the claims and can decide itself when and where it wants to intervene. View "Two Shields v. Wilkinson." on Justia Law

Plaintiff filed suit against XTO, an oil and natural gas producer, for damages caused by vibrations from drilling operations. The jury returned a verdict for plaintiff and XTO moved for a new trial. The district court denied the motion and XTO appealed. The court concluded that, even assuming the jury's fracking and earthquake discussions included any extraneous matters under Federal Rule of Evidence 606(b)(2)(A), XTO has not shown a reasonable possibility that the discussions prejudiced it or altered the verdict. Therefore, the district court did not abuse its discretion in denying XTO's motion for a new trial. Further, the district court did not abuse its discretion in declining to subpoena the jury foreman under Moore v. Am. Family Mut. Ins. Co. Accordingly, the court affirmed the judgment.View "Hiser v. XTO Energy, Inc." on Justia Law

Plaintiffs filed suit seeking a declaratory judgment quieting title to an interest in the Bakken formation that Phillip Armstrong purchased from Berco. Armstrong also filed suit against Encore for breaching a Letter Offer and for trespassing on, and converting the oil and gas attributable to, Armstrong's interest. Berco counterclaimed. The court affirmed the dismissal of Armstrong's quiet-title claim, based on the district court's conclusion that the Purchase Agreement and Assignment, taken together, conveyed to Armstrong a wellbore-only assignment; Armstrong's trespass claim was properly dismissed because Armstrong did not assert that Encore interfered with his use of the two wellbores; Armstrong's conversion claim was properly dismissed because Armstrong has an interest in only the Thompson and Yttredahl wellbores, the equipment associated with those wellbores, and the production through those two wellbores; the breach of contract claim was properly dismissed because Armstrong had no leasehold interest to transfer and thus could not comply with the Letter Offer; and the district court correctly ruled that Armstrong's unilateral alteration of Exhibit A before recording it rendered the recorded Assignment null and void. Accordingly, the court affirmed the judgment of the district court. View "Armstrong, et al. v. Berco Resources, LLC, et al." on Justia Law

First Tennessee and members of the Gregg family filed suit against Pathfinders and its assignees for breaching an oil and gas lease. The district court granted summary judgment in favor of Pathfinder, finding the case analagous to Frein v. Windsor Weeping Mary, LP. The court concluded, as in Frein, the best evidence of Arkansas law, that a large-up front payment with a surrender clause creates an option to cancel the lease, which Pathfinder exercised. Accordingly, the court affirmed the judgment of the district court. View "First Tennessee Bank Nat'l Assoc., et al. v. Pathfinder Exploration, et al." on Justia Law