On Thursday, a divided panel of the Texas Court of Appeals in Houston held that the 2014-2015 drop in oil prices is not a force majeure for purposes of general force majeure contractual protection. In TEC Olmos, LLC v. ConocoPhillips, the court addressed a dispute between ConocoPhillips Company and TEC Olmos over a farmout agreement that required Olmos to commence drilling by a specified date. No. 01-16-00579, 2018 WL 2437449 (Tex. App. —Houston May 31, 2018). During the interval between execution of the agreement and commencement of drilling, however, changes in the global supply and demand of oil caused the price of oil to drop significantly. As a result, Olmos was unable to secure financing for drilling and informed ConocoPhillips that it would be unable to meet its drilling obligations. ConocoPhillips filed suit against Olmos and the guarantor of the contract, Terrace Energy Company, for breach of the farmout agreement. The lawsuit sought $500,000 in liquidated damages.
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Construction
Federal Circuit Holds U.S. Army Corps of Engineers Not Liable for Hurricane Katrina Flood Damage
By Liskow & Lewis on
The United States Court of Appeals for the Federal Circuit recently issued a significant opinion in a case in which a takings claim was asserted to redress Hurricane Katrina-related flood damage. On April 20, 2018, it reversed a decision of the United States Court of Federal Claims (“Claims Court”), which had held the U.S. Army Corps of Engineers liable under the Tucker Act for flood damage to the Plaintiffs’ properties.
In 1968, the Corps completed construction of the Mississippi River Gulf Outlet (“MRGO”) in New Orleans. The purpose of this navigation channel was to increase commerce between the port of New Orleans and the Gulf of Mexico. Around the same time, Congress authorized funding for flood control through the Lake Pontchartrain and Vicinity Hurricane Protection Project (“LPV”). This project was instituted to reduce the risk of flooding in New Orleans, and it resulted in the construction of levees and floodwalls along the banks of MRGO.…
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Highly Anticipated En Banc Fifth Circuit Opinion Reframes Maritime Contract Analysis
In a highly anticipated ruling, the United States Fifth Circuit Court of Appeals issued its en banc decision in In re: Larry Doiron, Inc., No. 16-30217 (5th Cir. Jan. 8, 2018). The case called upon the court to determine whether a contract for performance of specialty services to facilitate the drilling or production of oil and gas on navigable waters is maritime in nature. In ruling that the particular contract at issue in the case was non-maritime, the Fifth Circuit took the significant step of streamlining and re-framing the analysis for maritime contracts generally.…
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Thinking About Improving Your Louisiana Facility? Follow These Steps or Risk Unlimited Lien Liability Under Louisiana’s Private Works Act
By Shannon S. Holtzman on
If a subcontractor or supplier on a Louisiana construction project is not paid in full, it can file a lien against the owner’s property and sue the owner for payment even though it did not contract with the owner and even if the owner has fully paid the general contractor. This can occur on any project involving any physical change to real property in Louisiana. See La. Rev. Stat. § 9:4808(A).…
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