Justia Arkansas Supreme Court Opinion SummariesArticles Posted in Energy, Oil & Gas Law
Hurd v. Arkansas Oil & Gas Commission
The Supreme Court affirmed the order of the circuit court affirming amended integration orders entered by the Arkansas Oil & Gas Commission (AOGC), holding that the AOGC did not exceed its statutory authority in granting SWN Production, LLC's (SWN) request to reduce the royalty payable under Appellants' oil and gas leases when the lessees elected to go "non-consent."On appeal, Appellants argued that the AOGC's actions were both ultra vires and arbitrary and capricious. The Supreme Court affirmed, holding (1) while there is no statutory provision specifically stating that the AOGC may reduce the royalty rate contained in a lease, there is also no statutory language expressly stating that the consenting parties - such as SWN - are responsible for payment of royalties when an uncommitted leasehold working-interest owner elects to go non-consent; and (2) the AOGC's orders were neither ultra vires nor arbitrary and capricious. View "Hurd v. Arkansas Oil & Gas Commission" on Justia Law
Stephens Production Co. v. Mainer
The Supreme Court affirmed the order of the circuit court granting Plaintiffs' motion for class certification in this action alleging that Defendant, which leased with Plaintiffs to drill and sell hydrocarbons from the leased property, improperly suspended royalty payments, holding that the requirements of numerosity and superiority were met.The complaint alleged that the royalty payments were suspended in an effort by Defendant to recoup improper deductions. Plaintiffs moved for class certification, which the trial court granted. Defendant appealed, arguing that Plaintiffs failed to satisfy the numerosity and superiority requirements. The Supreme Court affirmed, holding that the trial court did not abuse its discretion in determining that the numerosity and superiority requirements were satisfied in this case. View "Stephens Production Co. v. Mainer" on Justia Law
SEECO Inc. v. Snow
Edward Snow, individually and as putative class representative on behalf of all similarly situated people, filed a complaint against SEECO, Inc. alleging that SEECO had underpaid royalties to plaintiffs, a group of landowners who had entered into natural gas leases with SEECO. Snow subsequently filed a motion for class certification. The circuit court granted Snow’s motion to present a class of Arkansas citizens who entered into lease agreements with SEECO for the production of natural gas on their property in the Fayetteville Shale. SEECO appealed. The Supreme Court affirmed, holding that the circuit court did not abuse its discretion in certifying the class. View "SEECO Inc. v. Snow" on Justia Law
Lipsey v. Cox
Appellants, property owners and holders of oil and gas leases, filed a class-action complaint against Appellee, the circuit court clerk, alleging that Appellee and two of her deputies falsely and fraudulently notarized oil and gas leases. On remand and following a hearing, the trial court granted summary judgment in favor of Appellee, concluding that Appellants had failed to show any damages as a result of Appellee’s purportedly unlawful act in recording the leases. The Supreme Court affirmed, holding that the grant of summary judgment was not in error, as none of the evidence relied upon by Appellants created a factual question as to whether they sustained damages as a result of the actions alleged in the complaint. View "Lipsey v. Cox" on Justia Law
Gawenis v. Ark. Oil & Gas Comm’n
Appellant was the owner of gas, oil, and other minerals situated within the Ozark Highlands Unit (OHU). SEECO, Inc. applied to create a drilling unit in the OHU and to integrate all unleased and uncommitted mineral interests within the unit. The Arkansas Oil and Gas Commission established the unit and integrated all unleased and uncommitted mineral interests within the unit with the exception of Appellant’s unleaded mineral interests. At a hearing before the Commission to hear evidence related to SEECO’s request to integrate Appellant’s unleaded mineral interests into the drilling unit, Appellant asserted that the Commission’s forced-integration procedures amounted to a taking of his property. The Commission subsequently integrated Appellant’s unleaded mineral interests into the drilling unit. The circuit court affirmed the Commission’s decision. The Supreme Court affirmed, holding (1) the forced integration procedures do not amount to an unconstitutional taking; and (2) the Commission’s order did not deprive Appellant of his constitutional right to a jury trial to determine just compensation for his property. View "Gawenis v. Ark. Oil & Gas Comm'n" on Justia Law
Walls v. Humphries
The Hernandezes (Hernandez) entered into a real-estate contract to buy 100 acres of land in Van Buren County from the Humphries (Humphries). The sales contract included the mineral rights to the property. However, Humphries subsequently leased the oil-and-gas rights to New Century, which assigned the rights to SEECO. Humphries then sold the oil-and-gas rights to Paraclifta and Claughton. Therafter, Hernandez entered into a contract for sale of the property to the Walls (Walls). Hernandez and Walls (Appellants) filed suit against New Century, SEECO, Paraclifta, and Claughton (Appellees), alleging that Appellees were not innocent purchasers the oil-and-gas rights and seeking cancellation of the lease issued to New Century and the assignment to SEECO, as well as the deed conveying the rights to Paraclifta and Claughton. The circuit court granted Appellees' motions for summary judgment and Appellees' requested attorney fees. The Supreme Court reversed and remanded, holding (1) a question of fact remanded as to whether Hernandez was in exclusive possession of the property, thus imputing notice of Hernandez's interest in the property; and (2) the circuit court abused its discretion in awarding attorneys' fees. View "Walls v. Humphries" on Justia Law
Barton Land Servs., Inc. v. SEECO, Inc.
SEECO, Inc. owned oil-and-gas leases and possessed rights authorizing it to explore for and develop minerals from several tracts of land. SEECO filed an interpleader action to determine the ownership of the oil, gas, and minerals in the land. Appellee requested that the circuit court quiet title and confirm title in Appellees. Several defendants were named in the action. The circuit court ruled that a 1929 mineral deed, even with a blank left empty in the granting clause, conveyed one hundred percent of the mineral interest in three tracts of land to J.S. Martin. Appellees included the Stanton Group, as Martin's heirs and successors in interest, and SEECO. Appellants appealed, arguing that the 1929 mineral deed was void because the description of the interest was so vague that it was unenforceable. The Supreme Court affirmed, holding that the 1929 mineral deed was unambiguous, and the circuit court did not err by refusing to consider the parol evidence of a subsequent 1930 deed. View "Barton Land Servs., Inc. v. SEECO, Inc." on Justia Law
Walls v. Ark. Oil & Gas Comm’n
Appellants appealed form the decision of the circuit court, which upheld an order of the Arkansas Oil and Gas Commission granting relief to SEECO, Inc. in connection with a proposed drilling and production unit. The court of appeals affirmed in part, finding that the Commission's decision was supported by substantial evidence. However, the court dismissed for lack of jurisdiction the portion of the appeal in which Appellants argued that the circuit court erred by not allowing them to present additional evidence to the Commission. The Supreme Court vacated the court of appeals opinion and affirmed in part and dismissed in part, holding (1) the Commission's decision was supported by substantial evidence and was not arbitrary and capricious; and (2) the Court lacked jurisdiction to consider Appellants' appeal from the circuit court's order denying Appellants' request to present additional evidence to the Commission. View "Walls v. Ark. Oil & Gas Comm'n" on Justia Law
Nicholson v. Upland Indus. Dev. Co.
Appellants appealed the order of the circuit court dismissing their claims and quieting title to mineral interests, including oil and gas rights, in appellee Upland Industrial Development Company, Inc. The Supreme Court affirmed on appeal, holding that the circuit court did not err in (1) interpreting the Strohacker doctrine and applying the doctrine to the facts of this case; (2) placing the burden of proof on Appellants; and (3) finding that this was an actino to quiet title and, thus, finding no constitutional right to a jury trial was present. In addition, the Court concluded that Appellant's had no standing to raise on appeal the argument that the circuit court erred in granting Appellee SEECO, Inc.'s motion for attorneys' fees because Appellants were not aggrieved by the court's order. View "Nicholson v. Upland Indus. Dev. Co." on Justia Law
Staggs v. Union Pac. R.R.
Kenny and Shelia Staggs brought suit in circuit court seeking quiet title to the oil and gas rights on certain real property of which they claimed ownership of the surface and subsurface rights. The Staggses asserted that while Union Pacific Railroad Company claimed ownership of the oil and gas rights in the property and leased those rights to Heartland Exploration, it did so erroneously based on a 1934 deed. In the deed, Union Pacific's predecessor in title conveyed property to two individuals but reserved for itself "all the minterals" in or under the land. The Staggses contended that the oil and gas rights did not pass to Union Pacific but instead passed through the chain of title to them. Union Pacific, Heartland, and XTO Energy (collectively, Defendants) moved for summary judgment. The circuit court granted summary judgment for Defendants, finding that the general reservation of minerals in the 1934 deed included oil and gas as a matter of law. The Supreme Court affirmed, holding that, based on case law, the 1934 reservation at issue included any rights to oil and gas. View "Staggs v. Union Pac. R.R." on Justia Law