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Energy & the Law

Category Archives: Litigation

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Listen to the Words In the Injunction Battle

Posted in Litigation, operations

If it’s an injunction you want, some words are your friend and others aren’t. For example: “Imminent” = friend “Might” = not friend “Likely” = friend “Could” = not friend “Irreparable” = friend “Money damages” = not friend In Lightning Oil Company v. Anadarko E&P Offshore, LLC, the surface and 1/6 of the minerals of the… Continue Reading

Hydrocarbon Exposure Reconsidered

Posted in Litigation, Pollution

Co-author Maryann Zaki You might recall previous entries (here is one) discussing the $2.9 million Dallas County verdict and judgment in Parr v. Aruba. Not all similar suits have the same result. Michael and Myra Cerny sued Marathon Oil Corp. and Plains Exploration & Production Company, alleging, as in Parr,  private nuisance, negligence, and negligence per se…. Continue Reading

How Much Are Your Trees Worth?

Posted in Construction, Litigation

In Texas, more than your dog. Gilbert Wheeler, Inc. v. Enbridge Pipelines (East Texas), L.P. is good news for landowners. The Texas Supreme recognized the intrinsic-value-of-trees exception to the general rule for damages to real property, so that landowners are compensated for the loss of the ornamental (esthetic) and utilitarian (shade) value that trees bring… Continue Reading

Frac(k)ing, Parr v. Aruba, and Minority Oppression

Posted in Hydraulic Fracturing, Litigation

WHAT IS IT, FRACING OR FRACKING? Having gone back-and-forth over how to spell the process, I’ve figured it out. Why it is “Fracing”: That’s what the engineers call it, and they’re the ones who do it.  Some law firm blogs stand fast with their friends and agree.  It’s a gerund:  A noun formed from a verb by adding “-ing”.  So… Continue Reading

Federal Court: General Partnership Interest Could Be a Security

Posted in Litigation, Regulations

By: Martin P. Averill Are general partnership agreements for oil and gas exploration considered “securities” governed by federal securities regulations? The U.S. Court of Appeals for the 10th Circuit  thinks they could be. In SEC v. Jeffory D. Shields and Geodynamics, Inc. et al., the court reversed a trial court ruling which dismissed the SEC’s claims… Continue Reading

Distributions from a Texas Trust Deemed Separate Property

Posted in Litigation

Co-author Alexandra A. Crawley Conventional wisdom is that a spouse’s earnings from separate property are community property. But it’s not that simple. In Benavides v. Mathis a Texas court denied wife Leticia’s claim to one-half of the income derived from minerals held in a trust in which incapacitated husband Carlos was a beneficiary. Years before Carlos and Leticia began their nuptial… Continue Reading

Fear Alone Won’t Get You an Injunction

Posted in Litigation

With apologies for being absent for a week, I ask you to ponder this question when you embark on a fight with the officers and directors of the energy company you own a part of:  How does your subjective fear of harm factor into your right to injunctive relief? Not much, according to a Texas court… Continue Reading

Oral Transfer of an Immovable is Established in Louisiana

Posted in Litigation

Co-author Brooke Sizer In Louisiana, in order to have a valid oral transfer of immovable property under Civil Code Art. 1839, two requirements must be met: Delivery must be actual—physical possession must be in the transferee who claims title, and Recognition by the transferor under oath. In Harter v. Harter, mineral interests (which are immovables) were… Continue Reading

How an Oil and Gas Scammer Avoided Justice

Posted in Litigation

Co-author Brooke Sizer Scoundrels often get away with their crimes by scamming lots of victims for small amounts, so that no single investor can afford to prosecute his claim. Big Rock Investors Association v. Big Rock Petroleum, Inc. was an unsuccessful effort by investors to clear this hurdle. Big Rock Investors Association (BRIA) was created to prosecute claims by 226 investors of… Continue Reading

Deepwater Horizon Settlement Fine-Tuned By Fifth Circuit

Posted in Litigation

By Jim Reed and David Leonard The Fifth Circuit has taken steps to fine-tune the interpretation and implementation of the agreement BP negotiated to settle its massive liabilities arising from the April 2010 oil spill following the explosion of the Deepwater Horizon. Interpretation of the 1,000- plus-page settlement agreement—which the court described as one of the “largest… Continue Reading

Seismic Map is at the Center of Trade Secret Case

Posted in Litigation

Co-author Brooke Sizer The ”tradition” of stealing a prospect generator’s maps – and getting caught at it – is alive and well. Lamont et al v. Vaquillas Energy Lopeno Ltd et al is the second recent Texas case on theft of trade secrets and, like the first, resulted in a large judgment against the alleged thieves. The Players… Continue Reading

The Prospect Generator’s Case, a Second Look

Posted in Contract Disputes, Litigation

There is more to learn from Southwestern Energy Production Co. v. Berry-Helfand and Muncey, discussed in a recent post. Damages – With Room to Run, the Expert Scores. Courts are entitled to be “flexible and imaginative” when determining damages for misappropriation. The methods could include value of the plaintiff’s lost profits, the defendant’s actual profits from the use of… Continue Reading

Hold on to Your Insurance … Federal Court Certifies Deepwater Horizon Questions to Texas Supreme Court

Posted in Contract Disputes, Litigation

By David Leonard and Julie Palmer BP’s woes from the Deepwater Horizon disaster in the Gulf continue. The federal Fifth Circuit in In re: Deepwater Horizon, withdrew an opinion of a three-judge panel and certified questions for consideration by the Supreme Court of Texas. Resolution of this dispute could significantly impact insurance law in Texas, which… Continue Reading

Prospect Generator is Vindicated

Posted in Contract Disputes, Litigation

The prospect generator’s worst nightmare is presented in Southwestern Energy Production Co. v. Berry-Helfand and Muncey. I will over-simplify the facts: Hefland and Muncey toil for years generating James Lime prospects in a five-county area in East Texas. They show it. Dry holes are drilled. More data is generated. They show it many times again.  Parties who are shown… Continue Reading

Should I Agree to Arbitrate My Contract Dispute?

Posted in Litigation

You are negotiating a master service agreement, exploration agreement, farmout, or other oil-field contract, and the other side proposes that all disputes be resolved by arbitration. Should you agree?  The answer? It depends. I try lawsuits, advocate in arbitrations, and preside as an arbitrator, so I’m often asked this question. The answer isn’t the same in every case…. Continue Reading

Homeowner’s Testimony About Market Value Can’t be Speculative

Posted in Litigation

A multiple choice question: You’ve gotten to the trial you’ve waited two years for. You are presented with a “naked conjecture … “ followed shortly by an “ipsi dixit”. Your reaction: a. “Finally, something interesting happened at the courthouse.” b. “No thanks, I’m spoken for.” c. Rejoice, you won. Natural Gas Pipeline Company of America v. Justiss is a… Continue Reading

Executive Right Owner Could Be Liable for Failing to Forward Royalty Payments

Posted in Land Titles, Lease Disputes, Litigation

The ghosts of Clinton Manges and people like him continue to haunt executive right owners in Texas. In the 1980’s, Mr. Manges’ abuse of his non-participating royalty owner inspired the Texas Supreme Court to re-affirm the obligations of an executive right owner to the NPRI owner: “utmost fair dealing” and a fiduciary duty. In Friddle v. Fisher an appellate court… Continue Reading

Theft of Trade Secrets Nets Large Damage Award

Posted in Litigation

For the sake of conversation let’s say I burgle your trade secrets after failing to close a big deal that would have saved your company. I would be in big trouble, according to a bankruptcy court in In re TXCO Resources., Inc., a case study in treachery and self-dealing in the executive suite worthy of J.R Ewing at… Continue Reading

Reformation For Mutual Mistake Is Not Available to a Negligent Party

Posted in Land Titles, Litigation

My, how times change!  In a suit that brings the chaos, frenzy, and all-embracing madness of 2008 Haynesville leasing activity into focus, Hall Ponderosa LLC vs. Petrohawk Properties L.P. held that reformation of an oil and gas lease because of mutual error was not available to a lessor who was negligent in executing the agreement. In… Continue Reading

Louisiana Addresses Legacy Pollution Claims

Posted in Litigation, Pollution

  Louisiana Governor Bobby Jindal signed into law two bills significantly revising Louisiana’s oilfield cleanup statute, La. R. S 30:29. The new law affects the procedures for remediating oil field pollution and resolving oilfield contamination claims.  The purupose is to expedite the remediation process and the resolution of claims. For the highlights that were important to the Louisiana Oil and Gas Association,… Continue Reading