Justia New York Court of Appeals Opinion Summaries

Articles Posted in Energy, Oil & Gas Law

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The Court of Appeals held that the Public Service Law, in authorizing the Public Service Commission (PSC) to set the conditions under which public utilities will transport consumer-owned electricity and gas, authorized the PSC to issue an order that conditioned access to public utility infrastructure by energy service companies (ESCOs) upon ESCOs capping their prices in a certain manner. In 2016, the PSC issued the order challenged in this case that conditioned ESCOs' access to public utility infrastructure upon ESCOs capping their prices such that, on an annual basis, they charge no more for electricity than is charged by public utilities unless thirty percent of the energy is derived from renewable sources. Petitioners - ESCOs and their representative trade associations - commenced these two separate proceedings - combined N.Y. C.P.L.R. 78 proceedings and actions for declaratory judgment - seeking a declaration that the order was void and a a permanent injunction enjoin the PSC from enforcing the order. Supreme Court granted the petitions to the extent of vacating the challenged provisions of the order. The Appellate Division unanimously affirmed. The Court of Appeals modified the Appellate Division's orders, holding that the PSC did not exceed its statutory authority or violate Petitioners' constitutional rights in issuing the order. View "National Energy Marketers Ass'n v New York State Public Service Commission" on Justia Law

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Plaintiffs, various landowners, entered into separate oil and gas leases with Victory Energy Corporation whereby Plaintiffs leased drilling rights to Victory. Victory shared its leasehold interests with Megaenergy, Inc. Inflection Energy, LLC subsequently assumed from Megaenergy the operational rights and responsibilities under most of the leases. Each of the leases contained a force majeure clause, which provided that nonperformance may be excused under certain circumstances, and a habendum clause, which established the primary and definite period during which the energy companies could exercise the drilling rights granted by the leases. After the primary term of the leases had expired with no operations having been conducted upon the leaseholds, Plaintiffs commenced this declaratory judgment action against Inflection, Victory, and Megaenergy, seeking a declaration that the leases had expired by their own terms. The energy companies counterclaimed for a declaration that each lease was extended by operation of the force majeure clause, arguing that New York’s moratorium on the use of horizontal drilling and high-volume hydraulic fracturing triggered the force majeure clause. The district court granted summary judgment to Plaintiffs. On appeal, the Second Circuit certified to the New York Court of Appeals certain questions. The Court of Appeals answered that the force majeure clause did not modify the habendum clause. Therefore, the leases terminated at the conclusion of their primary terms. View "Beardslee v. Inflection Energy, LLC" on Justia Law

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These two appeals concerned the efforts of two corporations to explore and develop natural gas resources in two municipalities. In response, both municipalities adopted amendments to their zoning laws that prohibited all oil and gas exploration. The corporations brought actions challenging the zoning laws. Supreme Court declared the zoning laws valid, and the Appellate Division affirmed. The Court of Appeals affirmed, holding that the supersession clause in the statewide Oil, Gas and Solution Mining Law does not preempt the home rule authority vested in municipalities to regulate oil and gas production activities, including hydrofracking, within municipal boundaries through the adoption of zoning laws. View "Wallach v. Town of Dryden " on Justia Law