Justia Civil Procedure Opinion Summaries

This case involved an implied covenant to market gas. Energen owned and operated oil and gas wells in the San Juan Basin in northwestern New Mexico and southern Colorado. Its wells were subject to leases and other agreements (many of which were quite old) requiring it to pay a monthly royalty or overriding royalty on production to the Anderson Living Trust, the Pritchett Living Trust, the Neely-Robertson Revocable Family Trust (N-R Trust), and the Tatum Living Trust. Believing Energen was systematically underpaying royalties, the Trusts filed a putative class action complaint against it. The New Mexico Trusts claimed Energen was improperly deducting from their royalties their proportionate share of (1) the costs it incurs to place the gas produced from the wells in a marketable condition (postproduction costs) and (2) a privilege tax the State of New Mexico imposes on natural gas processors (the natural gas processors tax). They also alleged Energen had not timely paid royalties or interest thereon, as required by the New Mexico Oil and Gas Proceeds Payments Act. Both the New Mexico Trusts and the Tatum Trust further claimed Energen was wrongfully failing to pay royalty on the gas it used as fuel. The district judge dismissed the New Mexico Trusts’ marketable condition rule claim for failure to state a claim under Fed. R. Civ. P. 12(b)(6) and entered summary judgment in favor of Energen on the remaining claims. All of the Trusts appealed those judgments. For the most part, the Tenth Circuit agreed with the district court. The Tenth Circuit’s analysis differed from that of the district court relating to: (1) the fuel gas claims made by the N-R Trust and Tatum Trust; and (2) the New Mexico Trusts’ claim under the New Mexico Oil and Gas Proceeds Payments Act. As to the former, the N-R Trust’s overriding royalty agreement required royalty to be paid on all gas produced, including that gas used as fuel. And the Tatum Trust’s leases explicitly prohibited Energen from deducting post-production costs (Energen treats its use of the fuel gas as an in-kind postproduction cost). Moreover, the “free use” clauses and royalty provisions in the Tatum Trust’s leases limited the free use of gas to that occurring on the leased premises. Because use of the fuel gas occurred off the leased premises, Energen owed royalty on that gas. With regard to the latter, the district court was right in permitting Energen to hold funds owed to the N-R Trust in a suspense account until a title issue concerning a well was resolved in favor of that Trust. However, the district court did not address whether the N-R Trust was entitled to statutory interest on those funds. It was so entitled, yet the current record (at least in the Tenth Circuit’s analysis) did not show interest to have been paid on the funds. View "Anderson Living Trust v. Energen Resources" on Justia Law

At issue was whether this case presented a justiciable issue when the Supreme Court could not render a decision binding on a federal agency and could only offer an advisory opinion that may or may not ultimately bind the parties.Berenergy Corporation, which produced oil from several sites under oil and gas leases granted by the United States Department of the Interior, Bureau of Land Management (BLM), sought a declaratory judgment that the terms of its BLM oil leases provided it with rights superior to any obtained by Peabody Energy Corporation through its coal leases. The district court granted in part and denied in part both parties’ motions for summary judgment. Both parties appealed. The Supreme Court remanded the case for further proceedings before the district court, holding (1) Congress intended that the issues raised by Berenergy be decided by the Secretary of the Interior or its BLM designees; (2) there was no express consent by the federal government for the Secretary or the BLM to be made a party to suits such as this for the purpose of informing a congressionally approved decision by the district court; but (3) the court nonetheless remands this case for an evaluation of whether a federal agency may participate in this suit. View "Berenergy Corp. v. BTU Western Resources, Inc." on Justia Law

Petitioner Atlantic Richfield Company (“ARCO”) petitioned the Montana Supreme Court seeking reversal of five district court orders. Relevant here, the underlying action concerned a claim for restoration damages brought by property owners in and around the town of Opportunity, Montana. As part of ARCO’s cleanup responsibility relating to the Anaconda Smelter, EPA required ARCO to remediate residential yards within the Smelter Site harboring levels of arsenic exceeding 250 parts per million in soil, and to remediate all wells used for drinking water with levels of arsenic in excess of ten parts per billion. The Property Owners, a group of ninety-eight landowners located within the bounds of the Smelter Site, sought the opinion of outside experts to determine what actions would be necessary to fully restore their properties to pre-contamination levels. The experts recommended the Property Owners remove the top two feet of soil from affected properties and install permeable walls to remove arsenic from the groundwater. Both remedies required restoration work in excess of what the EPA required of ARCO in its selected remedy. The Property Owners sued, seeking restoration damages. ARCO conceded that the Property Owners could move forward on their first four claims, but contended that the claim for restoration damages was preempted by the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (“CERCLA”). The Supreme Court agreed with the district court that the Property Owners’ claims for restoration damages was barred by CERCLA. View "Atlantic Richfield v. 2nd Jud. Dist" 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

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

This case arose from competing claims to a portion of the Yuba Goldfields, a 10,000-acre valley on both sides of the Yuba River near Marysville. At issue was whether an arbitration award resolving a dispute between plaintiff Cal Sierra Development, Inc. (Cal Sierra), and Western Aggregates, Inc., served as res judicata to bar Cal Sierra’s lawsuit against Western Aggregates’ licensee George Reed, Inc., and the licensee’s parent Basic Resources, Inc. The Court of Appeal concluded yes. View "Cal Sierra Development v. George Reed, Inc." on Justia Law

In an amendment to the Clean Air Act (CAA), Congress directed the EPA to operate a Renewable Fuel Standards Program (the RFS Program) to increase oil refineries’ use of renewable fuels. But for small refineries that would suffer a “disproportionate economic hardship” in complying with the RFS Program, the statute required the EPA to grant exemptions on a case-by-case basis. Petitioner Sinclair Wyoming Refining Company owned and operated two refineries in Wyoming: one in Sinclair, and another in Casper. Both fell within the RFS Program’s definition of “small refinery” and were exempt from the RFS requirements until 2011. Those exemptions were extended until 2013 after the Department of Energy found Sinclair’s Wyoming refineries to be among the 13 of 59 small refineries that would continue to face “disproportionate economic hardship” if required to comply with the RFS Program. Sinclair then petitioned the EPA to extend their small-refinery exemptions. The EPA denied Sinclair’s petitions in two separate decisions, finding that both refineries appeared to be profitable enough to pay the cost of the RFS Program. Sinclair filed a timely petition for review with the Tenth Circuit court, which concluded the EPA exceeded its statutory authority under the CAA in interpreting the hardship exemption to require a threat to a refinery’s survival as an ongoing operation. Because the Court found the EPA exceeded its statutory authority, it vacated the EPA’s decisions and remanded to the EPA for further proceedings. View "Sinclair Wyoming Refining v. EPA" on Justia Law

A person dealing with a personal representative does not receive the protections of N.D.C.C. 30.1-18-14 unless the person obtains the personal representative's letters of appointment or any other court order giving the personal representative authority to act in this state. Dudley Stuber, trustee of the D.J. Stuber Land and Royalty Trust, and Rocky Svihl, trustee of the RGKH Mineral & Royalty Trust (collectively "Plaintiffs") appealed a judgment deciding ownership of certain mineral interests in favor of the estates of Victoria Davis and Helen Jaumotte. Plaintiffs moved for summary judgment, arguing there were no genuine issues of material fact and they were entitled to judgment as a matter of law. They claimed Jay Jaumotte, as personal representative of the estates, was authorized to sell property in North Dakota as a foreign personal representative, and Northland Royalty Corp. (to whom Jay Jaumotte first conveyed the interests) was a good-faith purchaser and was entitled to statutory protections under N.D.C.C. 30.1-18-14, and the statute of limitations had expired, precluding the heirs' claims. The heirs also moved for summary judgment. The heirs argued the deeds transferring the minerals to Northland were void because Jay Jaumotte lacked any authority to act on behalf of the Davis or Helen Jaumotte estates when dealing with North Dakota property, the Plaintiffs were not good-faith purchasers, and there were genuine issues of material fact about whether Northland was a good-faith purchaser. EOG Resources intervened and responded to the motions, arguing the Plaintiffs had no interest in the mineral estate, the Plaintiffs' predecessor-in-interest had notice of the heirs' potential interests in the property and failed to investigate, and the Plaintiffs and Northland were not good-faith purchasers. The North Dakota Supreme Court affirmed the district court's decision quieting title, but reversed its decision awarding damages to the Victoria Davis and Helen Jaumotte heirs. View "Stuber v. Engel" on Justia Law

A party with a royalty interest in a property, who has not signed a division order with an oil company, may recover underpayments from the oil company. Newfield Production Company ("Newfield") operates four oil and gas wells on the property at issue here. The Trustees of the George S. Maragos Residuary Trust ("the Trust") asserted they owned a 1/8 of 1% royalty interest in the property. While operating the wells, Newfield relied upon a division order-title opinion ("division order") to allocate the royalty interest for the property. The Trust argued it acquired its interest in the royalties through the following process: H. H. Hester possessed a royalty interest in the property and conveyed to George S. Maragos a 1/8% royalty interest in December 1937. George S. Maragos retained his interest until his death when the administrators of his estate assigned the royalty interest to the Trust in January 1985. The Trust sued Newfield for an accounting and all unpaid revenue from the 1/8% royalty interest in the property. The Trust moved for summary judgment. Newfield filed a cross-motion for summary judgment, arguing it was not a proper party defendant because it did not have a competing interest in the 1/8% royalty interest. The district court granted Newfield's cross-motion for summary judgment, holding the Trust claim was really a quiet title claim, Newfield was not a proper party defendant, the proper parties are the other competing royalty interest owners, and the Trust was not entitled to attorney's fees and interest under N.D.C.C. 47-16-39.1. The Trust appealed the district court's summary judgment in favor of Newfield, determining Newfield was not a proper party defendant. Because Newfield failed to establish they were entitled to judgment as a matter of law, the North Dakota Supreme Court reversed and remanded. View "Maragos v. Newfield Production Company" on Justia Law