Justia Government & Administrative Law Opinion Summaries

The companies obtained an oil and gas lease from the government for a 5760-acre tract on the Outer Continental Shelf. They made an initial bonus payment of $23,236,314 and have paid additional rental payments of $54,720 per year. The lease became effective on August 1, 2008, and had an initial term running through July 31, 2016. It provided that it issued pursuant to and was subject to the Outer Continental Shelf Lands Act of August 7, 1953, (OCSLA) 43 U.S.C. 1331 and “all regulations issued pursuant to the statute in the future which provide for the prevention of waste and conservation of the natural resources of the Outer Continental Shelf and the protection of correlative rights therein; and all other applicable statutes and regulations.” In 2010, an explosion and fire on the Deepwater Horizon semi-submersible oil drilling rig in the Gulf of Mexico killed 11 workers and caused an oil spill that lasted several months. As a result, the government imposed new regulatory requirements, Oil Pollution Act (OPA), 33 U.S.C. 2701. The companies sued for breach of contract. The Claims Court and Federal Circuit ruled in favor of the government, finding that the government made the changes pursuant to OCSLA, not OPA. View "Century Exploration New Orleans, LLC v. United States" on Justia Law

Two firms receiving gas storage service in the Washington Storage Field ceased taking service and "released" their storage rights to Paribas. The departing customers exercised their contract rights to buy back so-called "base gas" from the field's operator, Transco. Given the buy-back, Transco had to make new purchases to replenish its base gas so as to maintain service at the levels prevailing before the replacement. At the time of the exiting customers' departure, the historic customers who remained, and the new replacement customers, disputed whether the cost of the new base gas should be charged entirely to the replacement shippers ("incremental pricing") or should be charged to all shippers in proportion to their usage ("rolled-in pricing"). On appeal, Paribas challenged the Commission's ratemaking decisions under the Administrative Procedure Act (APA), 5 U.S.C. 551 et seq. In a decision purporting to apply the familiar "cost causation" principle, the Commission chose incremental pricing. The court concluded that the Commission failed to offer an intelligible explanation of how its decision manifested the cost causation principle; failed to explain how or why or in what sense the historic customers' continued demand did not share, pro rata, in causing the need for the new base gas, or, how or why or in what sense the historic customers did not share proportionately in the benefits provided by the new base gas; and brushed off Paribas's invocation of a seemingly parallel set of the Commission's own decisions. Accordingly, the court vacated and remanded. View "BNP Paribas Energy Trading GP v. FERC" on Justia Law

Shirley Adams and other landowners challenged a petition of the U.S. Oil and Gas Association that proposed amendments to Statewide Rule 681 which authorized the surface and subsurface landspreading of NORM as additional methods of disposal. The Mississippi Oil and Gas Board approved the proposed amendments to Rule 68, and its decision was upheld by the Chancery Court. After careful consideration, the Supreme Court found that the landowners failed to prove that the Board's adoption of amended Rule 68 was arbitrary and capricious or against the weight of the evidence. In addition, the Board's decision did not violate federal law or the landowners' constitutional rights; however, the Board violated state law when it exceeded its statutory authority under Section 53-1-17 by amending Rule 68 without gaining the approval of the Mississippi Commission on Environmental Quality. Accordingly, the Chancery Court's decision was reversed and the case remanded for review by the Commission. View "Adams v. Mississippi State Oil & Gas Board" on Justia Law

The Federal Energy Regulatory Commission is a federal agency that, under the Federal Power Act, regulates rates charged by public utilities for transmission and sale of energy in interstate commerce, and rules pertaining to such rates, 16 U.S.C. 824d. In 2006, FERC approved a new tariff (rules governing interstate sale of electricity and electric capacity) for the PJM market, covering 13 states and the District of Columbia, as a result of an extensively negotiated settlement between power providers, utility companies, government authorities and others. The order required that load serving entities (LSEs) in the market procure a certain amount of energy capacity for access during peak load; included a rule that offers for the sale of capacity in the markets at artificially low prices would, with some exceptions, be required to be raised to a competitive level (mitigation). In 2011, FERC altered the 2006 Order: eliminating a mitigation exemption for resources built under state mandate; eliminating a provision that guaranteed that LSEs would be able to use “self-supply” to satisfy capacity obligations; and changing factors used in determining whether an offer was subject to mitigation. Objectors argued that the changes amounted to direct regulation of power facilities in violation of the FPA, and that FERC arbitrarily eliminated the mitigation exemption for state-mandated resources. Electric utilities challenged elimination of self-supply assurances for LSEs. Others challenged new rules governing calculation of a resource’s net cost of new entry (for determining whether an offer for sale of capacity will be mitigated) and FERC’s determination that a new generation resource must clear only one capacity auction to avoid further mitigation. The Third Circuit rejected all of the challenges. View "NJ Bd. of Pub. Utils. v. Fed Energy Regulatory Comm'n" on Justia Law

The issue before the Supreme Court in this case involved the assessed value of the Trans-Alaska Pipeline System for property tax purposes. The parties disputed the method used to assess the pipeline's value as well as the specific deductions made for functional and economic obsolescence. Finding no reversible error, the Supreme Court affirmed the superior court's valuation. View "BP Pipelines (Alaska) Inc. v. Alaska" on Justia Law

Denali Citizens Council challenged the Department of Natural Resources' (DNR) finding that issuing a license to Usibelli Coal Mine for gas exploration in the Healy Basin was in the best interests of the state on two grounds: (1) DNR failed to take a "hard look" at the economic feasibility of excluding certain residential areas and wildlife habitat from the license; and (2) DNR's treatment of environmental mitigation measures in the best interest finding was arbitrary and capricious. Upon review, the Supreme Court affirmed the superior court's order upholding DNR's decision to issue the gas exploration license to Usibelli because the Court concluded that DNR did not act arbitrarily in developing and publishing its best interest finding. View "Denali Citizens Council v. Alaska Dept. of Natural Resources" on Justia Law

Issues of constitutional import stemming from cross-appeals taken from the Commonwealth Court's ruling on expedited challenges to Act 13 of 2012 were before the Supreme Court in this case. Act 13 contained sweeping legislation affecting Pennsylvania’s environment particularly the exploitation and recovery of natural gas in Marcellus Shale. The litigation was accelerated in part because the legislation itself was designed to take effect quickly and imposed obligations which required the challengers to formulate their legal positions swiftly; and in part in recognition of the economic importance of the legislation to the Commonwealth and its citizens. Following careful deliberation, the Supreme Court's decision found several challenged provisions of Act 13 were unconstitutional. Madame Justice Todd, and Mr. Justice McCaffery, found that several core provisions of Act 13 violated the Commonwealth’s duties as trustee of Pennsylvania’s public natural resources under the Environmental Rights Amendment; other challenges lacked merit; and several issues required further Commonwealth Court proceedings. Mr. Justice Baer, concurred in the mandate, and joined the majority in all but Parts III and VI(C); Justice Baer would have found the "core constitutional infirmity" sounded in substantive due process. Accordingly, the Commonwealth Court was affirmed in part, reversed in part, and the case remanded for further proceedings. View "Robinson Township, et al v. Pa. Public Utility Commission and Attorney General -" on Justia Law

The Indiana Utility Regulatory Commission (IURC) approved a contract for the purchase of substitute natural gas and directed the procedure for resolving future related disputes. The court of appeals reversed the IURC's approval of the contract because a definition term in the contract deviated from the required statutory definition. The parties to the contract subsequently amended the contract to delete the language that the court of appeals found improper. The Supreme Court vacated the reversal of the IURC's order, held that the amended contract that corrected the definitional error rendered the definitional issue moot, and summarily affirmed the court of appeals as to all other claims. View "Ind. Gas Co., Inc. v. Ind. Fin. Auth." on Justia Law

Petitioners, owners and operators of electrical power generation facilities, challenged several of the Commission's orders relating to the creation of the 2011-2014 "demand curves." NYISO holds monthly auctions to set the price of electrical power capacity in New York utilizing administratively determined demand curves. The court concluded that the Commission reasonably imposed the maximum suspension period; the Commission did not act arbitrarily by ignoring petitioners' argument that the Compliance Curves would necessarily exceed the Proposed Curves; the Commission did not exceed its section 205(e) authority under the Federal Power Act, 16 U.S.C. 824d(e), by suspending the Proposed Rates for longer than the five-month statutory maximum when it accepted the NYISO's voluntarily decision to delay implementation of the new curves; and the court rejected petitioners' challenge to the Commission's approval of NYISO's March 28 filing. The court also rejected petitioners' challenge to several technical aspects of the proposed curves. Accordingly, the court denied the petitions for review. View "TC Ravenswood, LLC v. FERC" on Justia Law

This case was an appeal of a final water court order which voided a rule promulgated by the Office of the State Engineer regarding nontributary ground water extracted in the course of coalbed methane (CBM) production and other oil and gas development. The final rules were challenged by owners of vested water rights and citizen groups whose members owned vested water rights. After extensive briefing by the parties, the water court upheld the Final Rules in their entirety except for the "Fruitland Rule," which it invalidated. The water court held that although H.B. 1303 granted authority to the State Engineer to promulgate the Fruitland Rule, the Tribal Rule essentially divested the State Engineer of that authority. The water court also found that the State Engineer had issued an improper "advisory" rule, and thus could not promulgate the Fruitland Rule unless he first obtained a judicial determination of his authority over nontributary ground water underlying the Reservation. The State Engineer, the Tribe, and several Intervenors appealed the water court's decision. Upon review, the Supreme Court reversed, concluding that the water court erred in invalidating the Fruitland Rule based on the Tribal Rule. The Court concluded the Tribal Rule did not divest the State Engineer of this authority: it stated on its face that the Final Rules themselves do not form the basis of or "establish" the State Engineer's authority to administer the nontributary ground water within Reservation boundaries. Because the Tribal Rule did not divest the State Engineer of his authority, the water court erred in invalidating the Fruitland Rule on that ground. Furthermore, the water court also erred in labeling the Fruitland Rule an "advisory" rule and in requiring the State Engineer to obtain a judicial determination that he had authority to administer nontributary ground water within the boundaries of the Reservation. Accordingly, the Supreme Court reversed the water court’s invalidation of the Fruitland Rule and remanded the case for further proceedings. View "Dick Wolfe v. Pawnee Well Users, Inc." on Justia Law