Litigation

Industrywide Issues | Lease & Royalty Payments | Litigation | Ohio | Statewide OH

Ohio DMA Decision Explained at December Seminar in Columbus
November 10, 2016November 10, 2016

MDN has highlighted the importance of the Ohio Supreme Court’s decision with regard to the Ohio Dormant Mineral Act (DMA). In September the OH Supreme Court ruled in three DMA cases, saying all of the other cases come under those three (see Important: OH Supreme Court Finally Rules on Dormant Mineral Act). Following that ruling, we brought you insights on what it means from international law firm Jones Day (see One More Look at Important OH Supreme Court DMA Decision). We later ran a copy of an analysis done by attorney David Wigham, who said, “[T]he landscape regarding title and ownership to mineral interests in Ohio has significantly changed” (see Expert Says OH DMA Decision “Significantly Changed” Mineral Rights). An MDN subscriber from a major Ohio driller reached out to editor Jim Willis to ask for help in promoting an event being hosted by the Energy & Mineral Law Foundation for lawyers on the topic of the recent DMA decision. We are happy to do so given the importance of the decision and its profound effect on both drillers and landowners in the Buckeye State. Here’s the lowdown on the Ohio Dormant Mineral Act Special Institute, Dec. 12 in Columbus, OH…
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Industrywide Issues | Litigation | Pennsylvania | Regulation | Statewide PA

PA Judge Temporarily Blocks Some DEP Chapter 78a Drilling Regs
November 9, 2016November 9, 2016

On Oct. 8, after five years in the making, Pennsylvania adopted new shale drilling regulations (see PA’s New Chapter 78a Drilling Regs Go into Effect Oct 8). Although the regs were ready at the end of the Gov. Tom Corbett Administration, Corbett fumbled the ball and the regs didn’t get adopted, which left them vulnerable to the incoming left-leaning Tom Wolf. Wolf’s people mangled the regulations under the Dept. of Environmental Protection Dictator/Secretary John Quigley, who got fired over unethical collusion with Big Green groups. Some of the good stuff remained, but onerous new elements were introduced. The Marcellus Shale Coalition (MSC), which represents PA’s biggest shale drillers, filed an appeal in Commonwealth Court to block the most onerous aspects of the new regulations (see Marc. Shale Coalition Files Lawsuit to Block PA Chapter 78a Regs). When the court judge held a hearing on the matter, he was shocked the MSC didn’t call any witnesses (i.e. shale companies) adversely affected by the new regs (see Judge “Shocked” MSC Didn’t Present Witnesses @ Chapter 78a Hearing). However, that same judge yesterday decided the MSC has a case, at least with some of the new rules. So he has temporarily blocked some of the items the MSC objected to in its lawsuit, including rules governing freshwater impoundments…
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Anti-Drilling/Fossil Fuel | Electrical Generation | Industrywide Issues | Litigation | Pipelines

Court Setback for NJ Pipeline Slated to Run Through Scrub Pines
November 9, 2016November 9, 2016

In January 2014, MDN brought you the story that due to incessant nagging from the NJ Sierra Club and the NJ League of [Liberal Democrat] Women Voters the Pinelands Commission, which oversees a stand of scrub pines in South Jersey, nixed a plan for a new natural gas pipeline to bring cheap, clean, abundant Marcellus Shale natural gas to South Jersey for use by residents and to feed an electric plant a local utility wants to convert from burning coal to natgas (see Sierra Club, LWV Chooses Coal over NatGas in South Jersey). In May 2014, NJ Gov. Chris Christie replaced two of the “no” voters on the Pinelands Commission, much to the consternation of the antis (see Marcellus Pipeline May Come to South Jersey After All). In August 2015, the staffers who actually do the work of the Commission decided to act, saying that they had the authority to approve the pipeline without a full Commission vote to do so. A panel of three New Jersey Appellate Division judges on Monday rejected that claim and said if you want to build a pipeline through the scrub pines, the full Commission must vote to do so…
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CNG/LNG | Dominion Energy | Energy Services | Exporting | Industrywide Issues | Litigation | Maryland | Regulation | Statewide MD

Radicalized Sierra Club Files Cove Point Appeal in DC Court
November 9, 2016November 9, 2016

The Sierra Club, which may have been founded for good reasons, long ago left the realm of sanity. Sierra Clubbers, as we call them, now live in an alternative universe where clean-burning natural gas and all fossil fuels are from the devil himself. The Clubbers have tried to get multiple LNG (liquefied natural gas) export facilities blocked on the theory that if you cut off the demand you can cut off the supply (i.e. end fracking of new wells). Yeah, crazy. But that’s what they’re trying. Lately they’ve tried to attack and bully both the Dept. of Energy and the Federal Energy Regulatory Commission. With legions of lawyers, they file frivolous lawsuit after frivolous lawsuit, hoping if they throw enough legal (ahem) feces against the wall, some it will stick. So far it hasn’t. One of the facilities the Sierra Club continues to fight against is Cove Point LNG in Maryland. They filed an appeal of a Dept. of Energy approval to allow Cove Point to export LNG to non-free trade agreement countries–namely Japan and India. Yep, the Sierra Club doesn’t want us to help out Japan or India. They’d rather have us help Saudi Arabia and Qatar, apparently. After the appeal went nowhere, the Clubbers have no sued in the uber-liberal D.C. Circuit Court of Appeals. Thing is, that very same court recently handed the Sierra Club a defeat in a similar case…
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Industrywide Issues | Litigation | Regulation

21 Senators, 67 Representatives Join Case Against EPA WOTUS Rule
November 9, 2016March 1, 2017

In May 2015 the Obama rogue Environmental Protection Agency (EPA) along with the Obama U.S. Army Corps of Engineers (USACE) released a finalized rule clarifying what “Waters of the United States” (WOTUS) means vis a vis what can be regulated under the federal Clean Water Act (see EPA Power Grab: Redefines Waters of the U.S. to Include Everything). Essentially the rule change redefines everything down to mud puddles (we’re not exaggerating) as subject to the federal Clean Water Act. In October 2015 a federal judge stopped WOTUS from going into effect, while it’s litigated (see Sixth Circuit Court Stops EPA from Implementing WOTUS Anywhere). It took a year, but last week 31 states along with other entities filed briefs with the 6th U.S. Circuit Court of Appeals opposing the rule (see 31 States Ask Court to Dump Obama WOTUS Rule as Unconstitutional). Good news: 21 U.S. Senators and 67 House of Representatives members (Congresspersons) have filed a “friend of the court” (amicus) brief urging the court to vacate the EPA’s WOTUS rule…
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Anti-Drilling/Fossil Fuel | Hydraulic Fracturing | Industrywide Issues | Litigation | Pennsylvania | Regulation | Statewide PA | Wayne County

PA Senators File to Join Case Against DRBC Fracking Moratorium
November 7, 2016November 7, 2016

In May MDN told you about a group of brave landowners in Wayne County, PA who have had their property rights stolen by the Delaware River Basin Commission (see Wayne County, PA Landowner Sues DRBC Over Fracking Ban). They filed a lawsuit against the DRBC asking a judge to declare the DRBC does not have jurisdiction to prevent construction of a natural gas well. Several northeastern PA counties (unfortunately) are located in the Delaware River Basin and the DRBC has steadfastly refused to allow them to drill any shale wells, citing concerns that the Delaware River supplies fresh water to millions downstream–even though they can’t explain how that water might get contaminated. A few months later, the DRBC’s best friend and patron, THE Delaware Riverkeeper, sued to join the lawsuit to help defend the inept DRBC (see Delaware Riverkeeper “Intervenes” to Protect its Patsy – the DRBC). Last week three PA senators filed to join the lawsuit on behalf of the landowners that they represent. Predictably, THE Delaware Riverkeeper wants to prevent the senators from joining the lawsuit…
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Accidents | Atlas Energy | Energy Companies | Greene County (PA) | Industrywide Issues | Litigation | Pennsylvania

Atlas Energy Not Liable in PA Rig Worker’s Death
November 4, 2016November 4, 2016

This is an important story for both drillers and rig workers, potentially answering the question of who can and can’t be sued if something goes wrong when drilling a well. In 2006 Atlas Resources leased land in Greene County, PA to drill shale wells. In 2007 Atlas hired Gene D. Yost & Son, Inc. to drill wells for Atlas, including on the land leased in Greene County. Yost was the subcontractor, employing people to do the work using Yost’s equipment. As workers were removing drill pipe, preparing to shut in the well, there was an accident which appears to be operator error. One man, Rock A. Doman, was killed. The Doman family later filed a wrongful death lawsuit against Atlas Energy for negligence. After years of litigation and court findings, an appeals court ruled last week that Atlas is, in fact, a “statutory employer” under PA law, meaning they are immune from such lawsuits. That is, because Atlas hired another company for that company’s services, they (Atlas) cannot be held responsible for what the company they hired theoretically did or did not do. In this case, Yost’s “negligence” (if indeed there was any negligence) is not transferable to Atlas…
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Industrywide Issues | Lease & Royalty Payments | Litigation | Ohio | Regulation | Statewide OH

Expert Says OH DMA Decision “Significantly Changed” Mineral Rights
November 4, 2016November 4, 2016

MDN has been reporting on the Ohio Dormant Minerals Act (DMA) for years. In a nutshell, there are two DMAs in Ohio–one passed in 1989 that went into effect in 1992, and another in 2006 which added certain additional procedural requirements to the 1989 version. The DMA in its various versions provides for mineral rights that had previously been separated from surface rights to transfer back to the surface owner under certain conditions. The problem, for drillers and for landowners in Ohio, is in knowing which set of DMA rules to use (1989 or 2006) in determining who owns the mineral rights. A number of DMA cases went before the Ohio Supreme Court. In May, Ohio attorney David Wigham (Roetzel & Andress law firm) said there are signs that the Supremes were about to release a massive, all-in-one-go ruling on the DMA (see OH Attorney Predicts DMA Ruling to Come Soon, Settle Now). He was right. In September they did rule in three cases, saying all of the other cases come under those three (see Important: OH Supreme Court Finally Rules on Dormant Mineral Act). Following that ruling, we brought you insights on what it all means from international law firm Jones Day (see One More Look at Important OH Supreme Court DMA Decision). Since the series of DMA decisions are so important to both drillers and landowners, we thought we would bring you follow up analysis from the lawyer who predicted it was coming–David Wigham. In speaking about the decision, Wigham says, “[T]he landscape regarding title and ownership to mineral interests in Ohio has significantly changed”…
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Chesapeake Energy | Energy Companies | Industrywide Issues | Lease & Royalty Payments | Litigation | Ohio | Statewide OH

OH Supreme Court: Royalty Deductions Decided Case-by-Case
November 3, 2016November 3, 2016

Last year the Ohio Supreme Court accepted a case that will sound familiar to readers of MDN. The case, known as Lutz v. Chesapeake Appalachia, is about whether or not drillers (Chesapeake in this case) is allowed to deduct certain post-production costs from landowner royalty checks. That debate currently rages in Bradford County, PA–as well as other locations across the country. In the Ohio case, the high court was asked to decide whether Ohio follows the “at the well” rule, which permits the deduction of post-production costs, or if the state follows the “marketable product” rule, which limits the deduction of post-production costs under certain circumstances. Drillers and landowners have a lot riding on the decision. The Supremes came down off Mount Olympus yesterday to render their verdict (full copy of the decision below). The court said in so many words, “We’re not deciding.” In other words, each royalty case should be litigated individually, case-by-case, in a trial court. There is no one-size-fits-all with respect to deducting expenses from royalty checks. Each case will depend on how the contract is written, and the success of lawyers litigating it…
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Industrywide Issues | Litigation | Regulation

31 States Ask Court to Dump Obama WOTUS Rule as Unconstitutional
November 3, 2016November 3, 2016

In May 2015 the Obama rogue Environmental Protection Agency (EPA) along with the Obama U.S. Army Corps of Engineers (USACE) released a finalized rule clarifying what “Waters of the United States” (WOTUS) means vis a vis what can be regulated under the federal Clean Water Act (see EPA Power Grab: Redefines Waters of the U.S. to Include Everything). Essentially the rule change redefines everything down to muddle puddles (we’re not exaggerating) as subject to the federal Clean Water Act. In October 2015 a federal judge stopped WOTUS from going into effect, while it’s litigated (see Sixth Circuit Court Stops EPA from Implementing WOTUS Anywhere). It’s taken a year, but earlier this week 31 states along with other entities filed briefs with the 6th U.S. Circuit Court of Appeals opposing the rule…
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Industrywide Issues | Litigation | Pennsylvania | Pipelines | Regulation | Statewide PA

PA Green Radicals Hope They’ve Got a New Way to Stop Pipelines
November 2, 2016November 2, 2016

The well-funded Big Green radical movement–the movement that wants to end the use of all fossil fuels–thinks it has found a new legal tactic to use in their attempts to stop the Mariner East 2 (and other) pipeline in Pennsylvania. You may recall that in September the Democrat-controlled PA Supreme Court further eviscerated the 2012 Act 13 Marcellus drilling law (see PA Supreme Court Rules Against Act 13 Drilling Law, Yet Again). One of the items the Supremes decided to overturn is the use of eminent domain for gas storage. The judges said using eminent domain for gas storage facilities violates both the federal and PA state constitutions. Gas storage is tied to pipelines, so Big Green zealots believe the decision provides a legal loophole they can leverage in their quest to stop pipelines…
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Energy Services | Industrywide Issues | Litigation | New York | Pipelines | Regulation | Statewide NY | Williams

Constitution Pipeline Case Goes to Court in 2 Weeks, Briefs Filed
November 2, 2016November 2, 2016

You may recall that in April, New York’s anti-drilling governor, Andrew Cuomo, decided he would cave to pressure from radical environmentalists once again and block the building of the federally-approved Constitution Pipeline (see NY Gov. Cuomo Refuses to Grant Permits for Constitution Pipeline). Cuomo’s toadies at the Dept. of Environmental Conservation (DEC) denied the Constitution the permits it needs to cross creeks and swamps. That was finally enough for Williams and the other partners in the project, who promptly sued NY in federal, NOT state, court (see Williams Sues NY Over Constitution Pipe – DEC May Lose Authority). The court venue is important, because in NY our court system at the highest level is corrupt–the governor appoints judges and those judges like their big-salary jobs and want to get reappointed–so they “decide” cases the way Andy wants them decided (see Shale Drilling in NY is Over – High Court Upholds Town Bans). We’ve predicted, repeatedly, that the NY DEC runs the very real risk of being removed from the decision process when it comes to federally-approved pipeline projects. If they lose the Constitution case, they will no longer have a role to play. Even the libs at Bloomberg think the DEC has a weak case (see Bloomberg Predicts Court Will Strip NY’s Right to Stop Constitution). We’re now two weeks away from the court hearing date and Williams has filed a couple of briefs blasting the DEC (copies below), and the DEC has filed a brief responding (copy below). It’s turning into a legal brawl. Warning to Williams: be prepared to fight like a New York street-fighter. Fortunately, the case sits in U.S. Circuit Court of Appeals and not the NY Court of Appeals (NY’s highest court)…
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Energy Companies | Energy Corporation of America | Industrywide Issues | Lease & Royalty Payments | Litigation | Pennsylvania | Statewide PA

PA Landowners Win $1.1M Lawsuit Against ECA re Royalty Deductions
November 1, 2016November 1, 2016

On Monday, October 24, 2016, the Third Circuit Court of Appeals (in Western Pennsylvania) ruled that Marcellus driller ECA (Energy Corporation of America) did not prove a need for a new trial in the case it previously lost. Pennsylvania landowners sued ECA in federal court beginning in 2010, saying their royalty checks were shorted because ECA was improperly deducting post-production costs. Sound familiar? In February 2013 a federal judge upheld a split decision that said most of what ECA was deducting was OK, but the one thing they can’t deduct from royalty checks are charges for interstate pipeline transmission (for the full story, read our post Federal Judge Upholds Split Decision in PA Royalty Case). More legal wrangling ensued after that decision and a jury trial convened in March 2015. The trial was to determine whether or not the landowners were shorted royalty payments because ECA was deducting charges for transportation and marketing. The jury found for the landowners and against ECA, awarding the landowners a $1.1 million judgment. ECA asked for a new trial and they have now been denied…
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Energy Services | Industrywide Issues | Litigation | Ohio | Pipelines | Statewide OH | Sunoco Logistics

OH Court Sides with Mariner East 2 Pipe in Eminent Domain Case
October 31, 2016October 31, 2016

Mariner East 2 – click for larger version

An Ohio landowner whose land Sunoco Logistics Partners wants to traverse with the Mariner East 2 pipeline tried a novel legal argument. The landowner’s attorneys argued in the Ohio Seventh District Court of Appeals that pure propane and pure butane–both of which would be transported through the pipeline from eastern Ohio all the way to the Marcus Hook refinery near Philadelphia–are not “petroleum.” At least, not petroleum for the purposes of the permit which grants Sunoco the right to use eminent domain to build the pipeline to transport petroleum products. The Court of Appeals justices rejected that argument and said, in essence, that propane and butane fit under the definition of petroleum as that word has been used for generations…
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Energy Companies | Industrywide Issues | Litigation | Pennsylvania | Range Resources Corp | Washington County | Wastewater

PA Court Says Range Impoundment Did NOT Contaminate Water Well
October 31, 2016December 2, 2016

You may recall that for some time we’ve been following the back and forth between Range Resources and their (former) wastewater impoundments in Washington County, PA. The PA Dept. of Environmental Protection (DEP) fined Range a whopping $4.15 million for violations in September 2014 (see PA DEP Fines Range Resources $4.15M for Wastewater Impoundments). Some of the nearby neighbors claimed that Range’s leaky impoundments (a quarter of a mile away) contaminated their water wells. One of those landowners was Loren Kiskadden, who is suing Range in civil court. The problem is, the DEP found that the nearby Yeager impoundment had not contaminated Kiskadden’s well, which led to allegations that the DEP had bungled the investigation (see Did DEP Mishandle Range Wastewater Impoundment Investigation?). Kiskadden had to press on, because if the DEP doesn’t reverse its finding, he has no civil case against Range. Press on he did (see Hearing on Range Yeager Impoundment/Water Contamination Continues). The matter was heard by the DEP’s Environmental Hearing Board (EHB). The EHB found that Kiskadden didn’t have a case–his well was not contaminated by Range’s impoundment. So Kiskadden and his lawyers asked for a re-hearing. The result of that re-hearing came back in December and (we thought) closed the door, once and for all, on the case (see DEP Final Determination: Range Didn’t Pollute Kiskadden Water Well). But no, that was not the end. Kiskadden appealed again. Last week a Commonwealth Court appeals panel affirmed the EHB’s 2015 dismissal of Kiskadden’s appeal of the DEP 2011 ruling that Range’s Yeager site operations did not contaminate Kiskadden’s well water. Have we finally reached the end of this drawn-out saga?…
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Industrywide Issues | Litigation | Pennsylvania | Regulation | Statewide PA

Judge “Shocked” MSC Didn’t Present Witnesses @ Chapter 78a Hearing
October 27, 2016November 9, 2016

Two weeks ago the Marcellus Shale Coalition (MSC) filed a court challenge to the Pennsylvania Dept. of Environmental Protection’s (DEP) onerous new Marcellus drilling regulations (see Marc. Shale Coalition Files Lawsuit to Block PA Chapter 78a Regs). The MSC lawsuit, filed in PA Commonwealth Court, does not object to the entire canon of new regulations–only those regulations that are “vague or are unsupported by authorizing legislation.” Just yesterday we brought you an excellent editorial outlining the justified reasons the MSC is pushing back against the DEP’s new regulations (see PA DEP Declares War on Shale Gas – a.k.a. Chapter 78a). On Tuesday and Wednesday a judge conducted hearings in the case, to accept testimony. The DEP put forward Scott Perry, the DEP deputy secretary for oil and gas. Perry spent most of Tuesday outlining the new rules for the judge, along with the (tortured) process that produced the rules. Wednesday was the MSC’s day. However, the MSC only put forward their own lawyers and did not call any witnesses–no drillers to testify how the rules will harm them. On that score, the judge said he was “shocked” that there were no witnesses for the MSC. We’re not lawyers, but a judge offering a comment like that doesn’t, in our book, bode well for the MSC’s case…
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