BY CHANCE DECKER
Kurt Mix’s nightmare probably won’t happen to you, but ignoring electronic discovery laws could cause you big problems in litigation.
You might have heard of Mr. Mix, the former BP engineer now facing federal obstruction of justice charges for deleting text messages about the 2010 Gulf oil spill. His nightmare is playing
You’re driving while texting your engineers about enhancing reservoir performance with LPG gel fracturing technology, and you rear-end a broken-down 15-year old Kia. The owner demands to be made whole. Is he entitled to the equivalent of another jalopy just as good as the one he had or, say, the brand-new Mercedes he says he
Two states recently addressed regulation of hydraulic fracturing of gas wells in two radically different ways.
Ohio
The Ohio legislature has passed Senate Bill 315, to be signed by the governor, requiring reporting of information on all wells that are stimulated (If you go to the link, the new legislation is underlined). To summarize:
Was it your long-time confidant who says your fiancee isn’t good enough for you and then runs off and marries her, or a seller’s remorse on a hundred-million dollar scale? We don’t know yet, but in Allen v. Devon Energy Holdings, a Houston court set guidelines for the trial of a case involving redemption of a member’s ownership interest in a limited liability company for a fraction of the amount he would have received in the sale of the entire company 20 months later.
This was an appeal of a summary judgment, not a trial, so no actual wrongdoing by anyone was established.
The facts are complicated and the legal analysis is detailed, which makes this post longer than usual. For lawyers, it is a quick treatise on the ins and outs of fraud claims and a warning that the “boilerplate” in your agreements might not be as effective as you think. For non-lawyers, it is about legal issues that could affect behavior among members of LLCs and shareholders of corporations, whether majority or minority owners.
Having tried in vain to avoid the turgid legalese non-lawyers have come to expect from people like me, I’ve inserted musical interludes about cheatin’ and betrayal that should help alleviate the stupefying boredom you are about to experience. For example:
John Maynard Keynes is no favorite of fiscal conservatives (There is more to like from Friedrich Hayek), but Mr. Keynes did have it right when he said, “The avoidance of taxes is the only intellectual pursuit that carries any reward”.
In two separate Texas suits, oil and gas producers are attempting to live out Mr.
Contract law 101: To have a binding contract there must be an offer and an acceptance. And so it is in oil and gas leasing in Louisiana. Thus, in Ballard v. XTO there was no binding agreement to take a lease.
A landowner representing an unknown number of potential lessors
Sponsoring the most paranoid Texas conspiracy theory since the puff of smoke from the grassy knoll, groups of neighborhood associations, homeowners, and businesses sued virtually all of the major Barnett Shale producers over their failure to complete negotiations for oil and gas leases for bonuses of up to $20,000 per acre. Cessation of negotiations –
Surely, the Pennsylvania Supreme Court has been busy since century before last, but apparently not on a lot of oil and gas cases. The court revisited the standard, first established in 1899, for determining whether an oil and gas lease has produced in paying quantities. In T.W. Phillips Gas & Oil Co. v. Jedlicka,
My last post featured editorial kudos for the EPA’s evenhanded approach to regulation of one aspect of drilling: handling of methane and volatile organic compounds during fracking. Perhaps the accolades were premature. I speak of the recently exposed and widely distributed video of the then-new and recently-resigned EPA Region 6 director Al Armendariz invoking an
“The wolf will live with the lamb,
the leopard will lie down with the goat,
the calf and the lion and the yearling together . . .”
(Isaiah 11:6)
What does the Old Testament have to do with the oil business? It seems the EPA’s new rules on the capture of methane and volatile organic