Justia Construction Law Opinion SummariesArticles Posted in Energy, Oil & Gas Law
Christenson v. Crowned Ridge Wind, LLC
The Supreme Court affirmed the decision of the South Dakota Public Utilities Commission (PUC) approving the application of Crowned Ridge Wind II, LLC to construct a large wind energy farm in northeast South Dakota, holding that the PUC followed the applicable statutory directives in granting the construction permit and properly determined that Crowned Ridge satisfied its burden of proof under S.D. Codified Laws 49-41B-22.After a contested hearing, the PUC issued a written decision approving the permit. Two individuals who lived in rural areas near the project and had intervened to oppose Crowned Ridge's application sought review. The circuit court affirmed. The Supreme Court affirmed, holding (1) the PUC did not err when it determined that Crowned Ridge met its burden of proof to comply with all applicable laws and rules; and (2) the PUC's findings were not clearly erroneous as they related to crowned Ridge's burden under S.D. Codified Laws 49-41B-22(3). View "Christenson v. Crowned Ridge Wind, LLC" on Justia Law
Rocky Mountain Steel Foundations, Inc. v. Brockett Company, LLC
Rocky Mountain Steel Foundations, Inc. appealed a judgment invalidating its oil and gas construction liens and awarding attorney fees to Mitchell's Oil Field Services, Inc., also known as Wood Group, and Travelers Casualty and Surety Company of America (collectively "Mitchell's"). Mitchell's, as general contractor, entered into a contract with Brockett Company, LLC, as subcontractor, and Amber Brockett, as personal guarantor (collectively "Brockett"), to purchase construction materials for installation on certain oil wells. Brockett purchased materials from Rocky Mountain to fulfill Brockett's contract with Mitchell's. Mitchell's paid Brockett in full. Rocky Mountain delivered the materials, and Mitchell's installed the materials. Rocky Mountain thereafter recorded two oil and gas well liens against the wells because Brockett had not paid Rocky Mountain. Mitchell's recorded lien release bonds, with the liens attached to the bonds. Mitchell's received payment in full, then Rocky Mountain filed to foreclose on the liens. The parties agreed Mitchell's paid Brockett in full before Rocky Mountain delivered the materials to the wells and before Mitchell's or the leaseholders received notice of the liens. The parties agreed Rocky Mountain timely and properly satisfied all statutory and other requirements to create, perfect, and foreclose on the liens. Rocky Mountain recorded the liens on well leaseholds by ConocoPhillips Company and Burlington Resources Oil & Gas Co. (the "owners"). Brockett did not answer or appear at any hearings and admitted to nonpayment, but asserted it has no assets with which to pay. The district court granted summary judgment in favor of Rocky Mountain for its breach of contract claim against Brockett. The parties submitted their remaining claims to the district court solely on interpretation of the oil and gas construction liens provided by N.D.C.C. ch. 35-24. The court found N.D.C.C. 35-24-04 invalidated Rocky Mountain's liens after the owners paid Mitchell's. The primary issue before the North Dakota Supreme Court was whether N.D.C.C. 35-24-04 permitted a subcontractor's oil and gas construction lien when an owner fully paid the general contractor. Rocky Mountain argued the district court erred in finding Rocky Mountain's liens were invalidated when the owners fully paid Mitchell's. The Supreme Court agreed: Section 35-24-02, N.D.C.C., allowed contractors to file liens for unpaid materials furnished or services rendered "in the drilling or operating of any oil or gas well upon such leasehold." The district court erred in interpreting N.D.C.C. sections 35-24-04 and -07 to invalidate Rocky Mountain's liens, and also erred in awarding attorney fees to Mitchell's. View "Rocky Mountain Steel Foundations, Inc. v. Brockett Company, LLC" on Justia Law
Rocky Mountain Farmers Union v. Corey
Rocky Mountain and American Fuels filed two separate actions against CARB, contending that the Low Carbon Fuel Standard, Cal. Code Regs. tit. 17, 95480-90, violated the dormant Commerce Clause and was preempted by Section 211(o) of the Clean Air Act, 42 U.S.C. 7545(o), known as the federal Renewable Fuel Standard (RFS). The court held that the Fuel Standard's regulation of ethanol did not facially discriminate against out-of-state commerce, and its initial crude-oil provisions (2011 Provisions) did not discriminate against out-of-state crude oil in purpose or practical effect. The court also held that the Fuel Standard did not violate the dormant Commerce Clause's prohibition on extraterritorial regulation. The court vacated the preliminary injunction and remanded to the district court for further considerations under Pike v. Bruce Church, Inc. View "Rocky Mountain Farmers Union v. Corey" on Justia Law
ASRC Energy Services Power v. Golden Valley Electric
This case arose from an award by Golden Valley Electric Association (GVEA) of two competitively bid construction contracts on its Northern Intertie Project. In November 2001 GVEA awarded Global Power & Communications, LLC (Global) a $39.4 million contract (Contract NI-8) for construction of the Northern Intertie’s Tanana River flats section. Later GVEA awarded Global an approximately $5.3 million contract (Contract NI-9) for construction of the Northern Intertie’s Tanana River crossing and Fairbanks sections. Subsequently, after Global had been awarded NI-9 and before it had completed work on NI-8, Global presented GVEA with requests for additional compensation (RFIs) totaling approximately $2.4 million in connection with NI-8. GVEA responded that it found "no legitimate basis" to justify Global’s RFIs and rejected Global’s request for additional payment. Global also notified GVEA that Global would submit more RFIs, arising out of both NI-8 and NI-9. In all, Global sought additional compensation totaling $5.7 million under the two contracts. GVEA responded to Global denying most of the RFIs but indicated that it would approve a few and consider partial payment for a few others. Global sued, and a trial court ultimately held in GVEA's favor, awarding it costs under both the contract and the applicable state law. Global appealed, arguing among other things, the trial court abused its discretion in ruling in favor of GVEA. Upon review of the lengthy record from the trial court, the applicable legal authority and legislative history, and the two contracts in question, the Supreme Court partly affirmed and partly vacated the trial court's decision. The case was remanded for: (1) a fee determination regarding GVEA’s "UTPA" claim against Global and (2) a new trial on causation and damages relating to GVEA’s breach of NI-9. View "ASRC Energy Services Power v. Golden Valley Electric" on Justia Law
City of Cohasset v. Minnesota Power, an Operating Division of Allete, Inc.
After respondent was granted a permit by the Minnesota Public Utilities Commission (âMPUCâ) for routing and construction of a pipeline to deliver natural gas to an energy center within appellantâs city limits, appellant commenced an action for declaratory and injunctive relief seeking to require respondent to obtain a franchise from appellant to operate the pipeline. The district court dismissed, concluding that appellant did not have franchise authority over respondentâs pipeline, and the appeals court affirmed. The Supreme Court reversed and remanded, holding (1) a municipality is authorized by Minn. Stat. 301B.01 to impose a franchise on a public utility that has constructed and operates a gas pipeline located on public property within the municipality, regardless of whether the pipeline itself supplies gas to the public; (2) a municipality is authorized by Minn. Stat. 216B.36 to impose a franchise on a public utility that serves customers within the municipality or that uses public property within the municipality to serve customers elsewhere; and (3) the issuance of a permit by the MPUC for the construction of a gas pipeline does not preempt pursuant to Minn. Stat. 216G.02 a municipal ordinance requiring a franchise for the operation of the pipeline after construction is complete.