Justia U.S. 5th Circuit Court of Appeals Opinion Summaries

Articles Posted in Energy, Oil & Gas Law
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Defendants appealed the district court's judgment favoring Five Star in a quiet title action over oil-and-gas interests. Five Star, asserting itself as the grantee’s successor-in-interest, sought a declaration that it owns a "floating" royalty entitling it to a three-eighths share of any leased royalty. The district court declared that Five Star owns an undivided three-eighths mineral interest pursuant to a 1927 deed. The Fifth Circuit affirmed the judgment, but clarified that Five Star's three-eighths mineral interest includes solely a right to receive a proportionate share of royalties and does not include an executive right or right to develop the land. View "Five Star Royalty Partners, Ltd. v. Mauldin" on Justia Law

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Plaintiffs filed a citizen suit against Exxon, seeking to recover from more than 16,000 Clean Air Act violations arising from the Baytown, Texas complex.The Fifth Circuit held that Clean Air Act plaintiffs must prove standing for each violation in support of their claims. The court held that the evidence supports the district court's findings of injury, traceability, and redressability for a number of the violations. However, a limited remand is needed for the district court to determine what other violations could have contributed to plaintiffs' members' injuries and then to tabulate its findings. The court noted that it does not require line-by-line findings, but that the district court may group violations. Furthermore, plaintiffs have standing for at least some of the violations that Exxon asserts affirmative defenses against. The court remanded for findings on whether Exxon proved its Act of God defense for the relatively small number of violations occurring during Hurricane Ike. The court affirmed the district court's rejection of Exxon's Rule 52(b) motion, because Exxon failed to meet its burden in supporting its no-fault defenses by failing to identify evidence establishing that it met the relevant criteria for each individual emissions event. Because the court remanded for the district court to determine the number of violations for which plaintiffs have standing, as well as whether Exxon proved its Act of God defense for any violations, the court will also have to reassess the penalties. View "Environment Texas Citizen Lobby, Inc. v. ExxonMobil Corp." on Justia Law

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The Fifth Circuit affirmed the district court's order confirming a $622 million arbitration award. The parties are oil and gas companies incorporated in different countries, and the dispute arose from the Agreement for the Provision of Drilling Services (DSA). About two years into the DSA's term, Vantage and Petrobras executed the Third Novation and Amendment Agreement, which included an arbitration clause.As a preliminary matter, the court stated that it need not decide the issue of whether the appeal waiver was enforceable. On the merits, the court held that there was no public policy bar to confirmation of the arbitration award. In this case, the district court did not engage in inappropriate deference to the arbitrator's decision and the district court did not base its decision just on "mutual mistake." The court also held that Petrobras has not shown that the district court abused its discretion in denying the discovery motions. Finally, the court rejected Petrobras' motion to vacate the arbitration award. View "Vantage Deepwater Co. v. Petrobras America, Inc." on Justia Law

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Digidrill filed suit against its competitor, Petrolink, alleging that Petrolink hacked into its software at various oil drilling sites in order to "scrape" valuable drilling data in real time. The district court granted Petrolink's motion for summary judgment on Digidrill's copyright claims. Digidrill's unjust enrichment claim proceeded to trial, where a jury returned a verdict in Digidrill's favor.In regard to the copyright infringement claim, the Fifth Circuit affirmed the district court's judgment and held that Digidrill likely waived its "qualitative importance" argument but, even if not, the argument fails on the merits because no reasonable jury could find substantial similarity based on the qualitative importance of the copied schema to DataLogger as a whole. The court also affirmed the district court's judgment as to the Digital Millennium Copyright Act claims, holding that the USB dongle and Interface Process did not effectively control access to the protected database schema.The court also held that Digidrill's unjust enrichment claim is not preempted by the Copyright Act because the claim incorporates an element beyond mere unauthorized copying. The court held that the available Texas authorities do not foreclose the possibility that a litigant may show the taking of an undue advantage without showing the violation of a law or legal duty. Therefore, the court affirmed the district court's denial of Petrolink's judgment as a matter of law on the issue of whether Digidrill adduced sufficient evidence of the benefit Petrolink obtained from Digidrill. Finally, the court held that the district court failed to treat Petrolink as the prevailing party under the relevant statutes and failed to apply the correct legal standard. Accordingly, the court vacated the district court's denial of Petrolink's motion for fees and remanded. View "Digital Drilling Data Systems, LLC v. Petrolink Services, Inc." on Justia Law

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Defendants own the surface of land sitting atop the property leased by Petro Harvestor. When the lease expired, Petro Harvestor sought a declaratory judgment that it could continue to operate its oil and gas activities on the property. Defendants claimed that the Surface Lease required Petro Harvester to return the surface land to its pre-lease condition upon expiration, requiring that Petro Harvester remove its machinery and vacate the property.The Fifth Circuit affirmed the district court's grant of summary judgment for Petro Harvestor, holding that the district court correctly held that the Surface Lease here does not supersede the Mineral Lease; the district court properly rejected defendants' affirmative defenses of waiver, ratification, and estoppel; Mississippi's statute of limitations does not bar Petro Harvester's declaratory judgment action; and defendants waived any argument that there are genuine issues of material fact that preclude summary judgment. View "Petro Harvester Operating Co. v. Keith" on Justia Law

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In this appeal stemming from the Deepwater Horizon litigation, the Fifth Circuit reversed the district court's order granting discretionary review and affirming a $77 million award against BP.The court held that the district court failed to consider investigating credible evidence of a sole, superseding cause for the claimant's loss. Furthermore, the district court's decision was made without the benefit of this circuit's guidance on causation. In this case, claimant is a global commodities merchandiser that purchases and supplies ammonia and fertilizers around the world. BP argued that claimant passed the V-Shaped Revenue Pattern due solely to a price spike and drop in the price of fertilizer that was unrelated to the oil spill. The court remanded for the district court to examine the issue in the first instance and to determine whether to remand to the Claims Administrator for additional factfinding. View "BP Exploration & Production, Inc. v. Claimant ID 100191715" on Justia Law

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The Fifth Circuit affirmed the district court's Federal Rule of Civil Procedure 12(b)(6) dismissal of LOGI's complaint for failure to state a claim. The magistrate judge and district court concluded that LOGI failed to provide Shell and Gulfport with notice under Article 137 of the Louisiana Mineral Code of their alleged failure to pay royalties timely and properly, and that LOGI consequently was barred from recovering under Article 138.Applying Louisiana law, the court held that the magistrate judge and district court did not err in determining that plaintiff's January 2014 communication was insufficient under Article 137. Furthermore, LOGI's second communication also did not satisfy the requirements of Article 137. View "Louisiana Oil & Gas Interests, LLC v. Shell Trading U.S. Co." on Justia Law

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The Fifth Circuit affirmed the district court's decision declining discretionary review of the appeal panel's affirmance of a Settlement Program determination that Walmart's submission was a "start-up business" claim. The court also affirmed the nearly $1 million award. In this case, Walmart submitted an economic loss claim under the Deepwater Horizon Settlement Agreement for one of its stores located on the Mississippi Gulf Coast. The store had reopened six months before the oil spill, having been closed ever since it was destroyed by Hurricane Katrina years earlier. The court held that the underlying appeal panel decision did not actually contradict or misapply the Settlement Agreement on a pressing question of implementation, and there was no split among appeal panels on the issue presented. View "BP Exploration & Production, Inc. v. Claimant ID 100354107" on Justia Law

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The Fifth Circuit affirmed the district court's denial of discretionary review of five awards made to Walmart under the Settlement Agreement arising from the 2010 Deepwater Horizon disaster. The court held that there was no showing of a misapplication or contradiction of the Settlement Agreement requiring the district court's review. In this case, the Claims Administrator conducted a searching review of the financial statements Walmart provided from both its old and new accounting system, and the PWC accountants brought specific clarification questions to Walmart regarding the changes. Furthermore, Walmart responded to the satisfaction of the Claims Administrator.The court rejected BP's claim that there was a split Appeal Panels on how to address changes in accounting systems like the one at issue here. The court saw BP's claim as one challenging the Appeal Panels' discretionary decision that raises the correctness of a discretionary administrative decision on the facts of a single claimant's case, and held that the district court's denial of a request for discretionary review of such a decision was not an abuse of discretion. View "BP Exploration & Production, Inc. v. Claimant ID 100354107" on Justia Law

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At issue in this oil and gas royalty case were orders to pay issued by the Department of the Interior to W&T in order to resolve volumetric gas delivery imbalances. The district court granted partial summary judgment on each of the parties' motions.The Fifth Circuit held that the Department of the Interior permissibly required resolution of delivery imbalances via cash payment, but that it improperly promulgated a substantive rule without subjecting it to notice and comment. The court also held that the Department of the Interior should have credited all W&T’s deliveries under the doctrine of equitable recoupment. Accordingly, the court affirmed the district court's partial grant of summary judgment in part, reversed in part, and remanded for further proceedings. View "W & T Offshore, Inc. v. Bernhardt" on Justia Law