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

Drillers filed a mineral lien on Debtor's well after Drillers performed work on the well and were never paid. The bankruptcy court dismissed Drillers' constructive trust and equitable lien claims and granted summary judgment to Debtors on Drillers' mineral contractor's and subcontractor's lien claims. The district court affirmed. The court affirmed the dismissal of Drillers' constructive trust and equitable lien claims. However, the court reversed and remanded the grant of summary judgment on Drillers' mineral subcontractors' lien claims because Drillers submitted sufficient evidence to survive summary judgment. The court held that it is possible under Texas law for an owner to also be a contractor, and for a laborer to secure liens against both the contracting and non-contracting owners. Viewed in the light most favorable to Drillers, the facts demonstrate that Drillers were subcontractors with regard to Debtors.View "Endeavor Energy Resources, L.P, et al. v. Heritage Consolidated, L.L.C., et al." on Justia Law

Plaintiffs filed suit against defendants, the owners and operators of a neighboring mineral lease, alleging that defendants committed "unlawful drainage" in violation of federal and Louisiana law. The district court subsequently dismissed the Second Amended Complaint (SAC) under Rule 12(b)(6). The court concluded that the SAC stated a claim for waste against Defendant IP, the company that allegedly perforated a hydrocarbon reservoir named the K-1 sands. The court concluded, however, that the SAC insufficiently alleged that the non-perforating defendants committed waste. Accordingly, the court affirmed in part, vacated in part, and remanded.View "Breton Energy, L.L.C., et al. v. Mariner Energy Resources, Inc., et al." on Justia Law

Entergy sells electricity in Arkansas, Louisiana, Mississippi, and Texas through its six operating companies. The System Agreement governs dealings between the companies and establishes an operating committee. In Appeal No. 13-60140, the first three orders on review arose from the Arkansas Commission's complaint requesting that FERC modify the System Agreement. In Appeal No. 13-60141, the two orders on review relate to a second bandwidth proceeding. The court concluded that FERC's corrective interpretation of the System Agreement's depreciation formula was reasonable, not arbitrary, and not otherwise discordant with law. The Louisiana Commission also challenged Entergy's reversal of the Vidalia transaction under the language of the System Agreement as an impermissible change to the formula rate without proper notice. The court dismissed the petition as an impermissible collateral attack. View "LA Public Service Commission v. FERC" on Justia Law

Lessors appealed the district court's grant of summary judgment in favor of the lessee, Chesapeake, in this dispute over oil and gas lease royalty provisions. The court concluded that the value of the lessors' royalty is a percentage of the market value at the point of sale, which in this case is at the well; a "net-back" method of calculation does not "burden" or reduce the value of the royalty; Chesapeake has sold the gas at the wellhead and that is the point of sale at which market value must be calculated under the terms of the lessors' lease; and the Texas court's decision in Heritage Res., Inc. v. NationsBank, remains binding law. Therefore, the court affirmed the judgment of the district court.View "Potts, et al. v. Chesapeake Exploration, L.L.C." on Justia Law

Plaintiff filed suit against Denbury, alleging that Denbury breached its duty to act as a reasonable and prudent operator of the well that was drilled under oil, gas, and mineral leases. At issue on appeal was whether the district court erred in remanding the case on the basis that the local single event exclusion under the Class Action Fairness Act (CAFA), 28 U.S.C. 1332(d)(11)(B)(ii), (ii)(I), applies to this case. The court concluded that the plain text of the exclusion supports plaintiffs' view that the terms "event" and "occurrence" are not generally understood to apply only to incidents that occur at a discrete moment in time. Moreover, this understanding is supported by legislative history and other case law interpreting the local single event exclusion. Therefore, the court held that, although the exclusion applied in cases in which the single event or occurrence happens at a discrete moment in time, the single event or occurrence may also be constituted by a pattern of conduct in which the pattern is consistent in leading to a single focused event that culminates in the basis of the asserted liability. Accordingly, the court held that the failure of the Well constituted the "event or occurrence" from which the claims of plaintiffs arose. The court affirmed the judgment of the district court.View "Rainbow Gun Club, Inc., et al. v. Denbury Onshore, L.L.C., et al." on Justia Law

ACL contracted with ES&H and USES following an oil spill to provide cleanup services. After ACL failed to pay the outstanding amounts owed to the companies, the United States paid the balance out of the Oil Spill Liability Trust Fund and then filed suit against ACL to recover its payments. The court concluded that the Oil Pollution Act of 1990 (OPA), 33 U.S.C. 2701 et seq., provides the exclusive source of law for an action involving a responsible party's liability for removal costs governed by OPA and held that ACL does not have a cause of action against the spill responders who exercised their statutory right to file claims with the Fund after ACL failed to timely pay their claims. Accordingly, the court affirmed the district court's dismissal of ACL's claims against ES&H and USES as displaced under OPA.View "United States v. American Commercial Lines" on Justia Law

Plaintiffs, the Warrens and the Javeeds, filed suit against defendants (Chesapeake entities), alleging that defendants breached royalty provisions in oil and gas leases by deducting post-production costs from the sales proceeds of natural gas. The district court held that the leases contained "at the well" royalty provisions, under decisions of the Supreme Court of Texas in Heritage Resources, Inc. v. NationsBank and Judice v. Mewbourne Oil Co., Chesapeake was authorized to make post-production deductions in determining the amount realized at the mouth of the well, despite the provisions in the Warrens' leases that the royalty would be free of certain post-production costs. The court affirmed the district court's dismissal of the Warrens' claims for failure to state a claim. However, the court concluded that the Javeeds' claim should not have been dismissed with prejudice where it was not apparent from the face of the complaint or attachments that they could not conceivably state a cause of action. Accordingly, the court modified the district court's judgment as to the Javeeds' claims.View "Warren, et al. v. Chesapeake Exploration, L.L.C., et al." on Justia Law

This case stemmed from Pioneer's efforts to seek insurance coverage under Steadfast's umbrella policy for costs and expenses incurred in cleaning up and remediating some property. Applying Louisiana's choice-of-law rules, the court concluded that Texas law applied because the insurance policy at issue was issued and delivered under Texas insurance statutes. The district court found that Texas and Louisiana law do not conflict on the issue of insurance policy interpretation and applied Louisiana law. Because neither party challenged this determination, the court did the same. On the merits, the court concluded that the district court did not err by holding that the exclusions within the Property Damage exclusion and the Blended Pollution endorsement were applicable, thus precluding coverage for the costs of remediating the Meaux property and containment; the costs of containment were precluded by the clear language of the policy; the costs of remediating the Rutherford property were unavailable due to its inability to allocate remediation costs; the costs of settling the lawsuits were unavailable due to the retained limit; and the costs of plugging the well were precluded by the OIL endorsement. Accordingly, the court affirmed the judgment of the district court. View "Pioneer Exploration, L.L.C. v. Steadfast Ins. Co." on Justia Law

BP and Andarko appealed the district court's grant of summary judgment in favor of the the government on the question of their liability for civil penalties under 33 U.S.C. 1321(b)(7)(A). Section 1321(b)(7)(A) imposes mandatory penalties upon the owners of facilities "from which oil or a hazardous substance is discharged." The court found no genuine dispute as to defendants' liability for civil penalties where the well's cement failed, resulting in the loss of controlled confinement of oil such that the oil ultimately entered navigable waters. Therefore, the well is a facility "from which oil or a hazardous substance was discharged""into or upon the navigable waters of the United States." Andarko and BP "shall be subject to a civil penalty" calculated in accordance with statutory and regulatory guidelines and this liability is unaffected by the path traversed by the discharged oil. Nor is liability precluded by any culpability on the part of the vessel's owner or operator. Accordingly, the court affirmed the judgment of the district court. View "In Re: Deepwater Horizon" on Justia Law

EMS appealed the district court's order denying its motion to remand its suit against the City to the state court from which it was removed. The court concluded that removal was improper because none of the claims in EMS's state court civil action satisfied either the federal question or diversity requirements of original jurisdiction; the district court's prior jurisdiction over the claims asserted in City v. CLECO, which were now dismissed, did not vest the district court with jurisdiction over EMS's claims; regardless of how factually intertwined with EMS's suit, the district court's retention of jurisdiction over the post-settlement matters could not substitute for original jurisdiction for the purpose of supplemental jurisdiction under 28 U.S.C. 1367 or removal under section 1441, given that EMS's claims were not asserted in the same proceeding as the claims in City v. CLECO; and, if Baccus v. Parrish retained any precedential value, it was distinguishable and inapposite in this instance. Accordingly, the court reversed and remanded. View "Energy Mgmt. Servs. v. City of Alexandria" on Justia Law