In recent years, there has been an increase in litigation relating to the unleased owner reporting requirements contained in La. R.S. 30:103.1 and the penalty imposed in La. R.S. 30:103.2. There are few cases interpreting these statutes. However, the existing authority recognizes that even if an operator fails to comply with such reporting requirements, an unleased owner must provide sufficient notice under La. R.S. 30:103.1 and 103.2 before the statutory penalty may be imposed. The recent non-final interlocutory ruling in Limekiln Development, Inc. v. XTO Energy, Inc.,[1] provides yet another data point in an otherwise barren area of Louisiana law about the notices required under this statutory scheme in order to properly place operators on notice and to potentially impose the penalty of La. R.S. 30:103.2. Continue Reading
What Does Washington’s Pro-Union Push Mean for You?
After previously speaking in favor of the workers who were trying to organize an Amazon facility in Alabama, President Biden last week signed an Executive Order on Worker Organizing and Empowerment and delivered an address to a joint session of Congress discussing the importance of unions. In his speech at the Capitol, the president said, “Wall Street didn’t build this country. The middle class built this country. And unions build the middle class. And that’s why I’m calling on Congress to pass the Protecting the Right to Organize Act – the PRO Act — and send it to my desk to support the right to unionize.”
Texas Supreme Court Update: Boundary Dispute Between Leasehold Owner and Lessees of Adjacent Tract
Bringing to mind the infamous Hatfield-McCoy family feud, Concho Resources, Inc. v. Ellison is a classic boundary dispute between a leasehold owner and neighboring lessees with allegations of fraud and more than $1 million at stake. See 2021 WL 1432222 (Tex. Apr. 16, 2021). The plaintiff, Martha Ellison d/b/a Ellison Lease Operating, alleged that the defendant lessees, Samson Resources Company (“Samson”), COG Operating LLC (“Concho”), drilled and operated a well on her leasehold. The defendants—relying on a boundary stipulation and a written acceptance of such stipulation signed by Jamie Ellison, Mrs. Ellison’s deceased husband—claimed that Mr. Ellison ratified the agreed boundary line before his passing, foreclosing any claims of trespass. What ensued was a long legal battle with an ironic outcome. The defendants won in the trial court; the court of appeals reversed. The tables turned again at the Texas Supreme Court, which ultimately held that the boundary stipulation was valid and that the defendants conclusively established their ratification defense, but the case is still ongoing. Continue Reading
Federal Agency Recommends Updated Regulations for Pipeline Monitoring, Decommissioning, and Abandonment
On April 19, the United States Government Accountability Office (“GAO”) released a report (the “Report”) in response to a request from the House of Representatives Committee on Natural Resources regarding the oversight and decommissioning of pipelines in federal waters, which are mainly located within the Gulf of Mexico. The Report concluded that the Bureau of Safety and Environmental Enforcement (“BSEE”) lacks a robust oversight process (1) for ensuring the integrity of active offshore oil and gas pipelines and (2) to address the environmental risks posed by decommissioning and abandoning pipelines on the seafloor. The GAO recommended that BSEE take actions to further develop, finalize, and implement updated pipeline regulations to address limitations in its ability to (1) ensure active pipeline integrity and (2) address safety and environmental risks associated with pipeline decommissioning and abandonment. Continue Reading
Texas Supreme Court Update: TRO-X Lives to Fight Another Day in Contractual Dispute over Share of Income on Production from Equitable Interests
The Texas Supreme Court recently released its anticipated opinion in Eagle Oil & Gas Co. v. TRO-X, L.P., 18-0983, 2021 WL 1045723, at *1 (Tex. Mar. 19, 2021) (“Eagle II”). The Eagle II case is the second case that arose between TRO-X, L.P. (“TRO-X”) and Eagle Oil & Gas Co. (“Eagle”) regarding their agreement to jointly acquire and sell oil and gas leases. In the first, Eagle Oil & Gas Co. v. TRO-X, L.P., 416 S.W.3d 137, 149 (Tex. App.—Eastland 2013, pet. denied) (“Eagle I”), TRO-X alleged that Eagle deprived TRO-X of its right to acquire certain mineral interests upon the sale of several leases in violation of their agreement. TRO-X lost that suit on appeal when the court of appeals found that TRO-X held equitable title to those interests and thus was not deprived of them. In Eagle II, TRO-X alleged that Eagle failed to pay TRO-X its share of income generated from production on the equitable interests. In response, Eagle asserted several affirmative defenses—res judicata (claim preclusion), the statute of limitations, and waiver—in a motion for summary judgment. The trial court granted the motion, the court of appeals reversed, and the Supreme Court affirmed the court of appeals, finding that Eagle did not conclusively establish any of its affirmative defenses. Continue Reading
FinCEN Seeking Comments on New Beneficial Owner Reporting Requirements
On April 5, 2021, the Financial Crimes Enforcement Network (“FinCEN”) released its advance notice of proposed rulemaking (“ANPRM”) to solicit public comments on questions pertinent to its implementation of the Corporate Transparency Act’s (“CTA”) beneficial owner reporting requirements. As discussed in a previous Energy Law Blog post, the CTA was adopted as part of the 2021 National Defense Authorization Act and requires that certain business entities disclose to FinCEN the identities of their beneficial owners and applicants. The information will then be stored in a secure, private database that may be accessed by, among others, law enforcement agencies for crime prevention and certain financial institutions for customer due diligence purposes. FinCEN has until January 1, 2022, to implement the regulations regarding reporting requirements, although FinCEN is also using this ANPRM to solicit comments on the implementation of the related database maintenance use and disclosure provisions. Final rules on customer due diligence requirements for financial institutions will be the subject of separate rulemaking and comment periods.
Bystander Training: The Best Defense Against Sexual Harassment
Why Do We Need to Talk About Bystander Training?
Many companies train employees on sexual harassment, but studies have shown that much of this training is ineffective and does not empower companies and employees to prevent harassment.
The Equal Employment Opportunity Commission’s Select Task Force on the Study of Harassment in the Workplace issued a report in 2016 finding that some sexual harassment training even caused men to be more likely to blame both the harasser and the victim involved in a sexual harassment scenario. The EEOC’s study goes on to say that training often focused too much on legal standards and simply avoiding legal liability. Continue Reading
President Biden Faces Constitutional Challenges to Revocation of Keystone XL Permit
During his first hours in the Oval Office, President Biden issued Executive Order 13990, entitled “Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis.” Section 6 of the Order revoked TransCanada Keystone Pipeline, L.P.’s March 2019 permit to construct and operate cross-border pipeline facilities at the U.S.-Canada border in Montana. This March, however, Attorneys General from 21 states[1] filed a lawsuit[2] in the Southern District of Texas against President Biden and several Cabinet members[3] alleging that the President’s Order violates the U.S. Constitution.
Texas Supreme Court Update: The Court Decides Issue of First Impression Related to the Scope of an Oil and Gas Lease’s Free-Use Clause and Further Interprets Conflicting Royalty Clause Provisions
The Texas Supreme Court recently issued its anticipated decision in BlueStone Natural Resources II, LLC v. Randle, affirming in part and reversing in part the lower court’s ruling. No. 19-0459, 2021 WL 936175 (Tex. Mar. 12, 2021). The Court (1) affirmed that the lower court correctly concluded the oil and gas lease at issue explicitly resolved conflicting royalty provisions in favor of a gross-proceeds calculation; and (2) affirmed the lower court’s interpretation regarding application of the lease’s free-use clause, but remanded the case to recalculate the amount awarded to the royalty owners. Continue Reading
Western District Rejects Disgorgement of Profits Claim for Pipeline Trespass
In Mary v. QEP Energy Company, the Western District of Louisiana rejected, for the second time in this case, Plaintiffs’ claims seeking a disgorgement of QEP’s profits. QEP was the lessee of a mineral lease covering Plaintiffs’ property, but because it wanted to transport off-site gas across their property, QEP also obtained a pipeline servitude across Plaintiffs’ land. A dispute arose after the pipeline contractor “cut the corner” of the servitude when laying the pipeline, resulting in approximately 45 feet of pipeline being buried outside the designated servitude. Plaintiffs asserted a number of claims, all of which were resolved except their claims seeking a disgorgement of profits. Continue Reading
