Justia Mississippi Supreme Court Opinion Summaries

Articles Posted in Energy, Oil & Gas Law
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The Forrest County Board of Supervisors passed an ordinance requiring oil and gas facilities located within the county be fenced in. Delphi Oil, Inc. appealed a circuit court order that upheld the Board's ordinance, arguing that the regulatory authority of the State Oil and Gas Board (OGB) preempted any local regulations of oil and gas activity. The Supreme Court found the state law did not preempt the local ordinance, and affirmed. View "Delphi Oil, Inc. v. Forrest County Board of Supervisors" on Justia Law

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Three main issues were raised on appeal to the Supreme Court in this case: (1) whether a school district is liable for oil and gas severance taxes on its royalty interests derived from oil and gas production on sixteenth-section land (the chancellor ruled that it is not); (2) whether the statute of limitations restricts the time period in which a school district can seek a refund of severance taxes that it had paid erroneously (the chancellor ruled that a three-year statute of limitations applied to any refund claims); and (3) whether a school district is liable for administrative expense taxes on its royalty interests derived from oil and gas production on sixteenth-section land (the chancellor ruled that it is). Upon review of the applicable code and in consideration of the arguments of the parties to this case, the Supreme Court found that the chancellor's judgment should be affirmed in part and reversed in part: (1) school districts are not liable for oil and gas severance taxes on sixteenth-section royalty interests: school districts, as political subdivisions of the state, are not included within the definition of "persons" made subject to these taxes; (2) pursuant to the Mississippi Constitution, statutes of limitation in civil causes do not run against the state or its subdivisions; and (3) school districts are liable for administrative expense taxes on sixteenth-section royalty interests: "[t]hese assessments are 'fees,' not 'taxes'; the Legislature has expressly made the state and its subdivisions subject to these fees; and no constitutional provision or other law is violated by requiring school districts to pay them." View "Jones County School District v. Mississippi Department of Revenue" on Justia Law

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This interlocutory appeal stemmed from litigation concerning a contract dispute among Williams Transport, LLC (Williams Transport), Driver Pipeline Company, Inc. (Driver Pipeline), Buckley Equipment Services, Inc. (Buckley Equipment), and other unnamed defendants. Based on an arbitration clause in the contract, Driver Pipeline filed a motion to compel arbitration. The trial court denied the motion to compel arbitration as well as a subsequent motion for reconsideration. Driver Pipeline filed a petition for interlocutory appeal, which the Supreme Court accepted as a notice of appeal. Finding no error by the trial court in denying Driver Pipeline's motion to compel arbitration, the Supreme Court affirmed. View "Driver Pipeline Company, Inc., Buckley Equipment Services, Inc. v. Williams Transport, LLC" on Justia Law

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The plaintiffs (collectively "Tellus") alleged that they owned the "shallow gas" rights in a tract of land known as the Bilbo A Lease. While ownership of the shallow gas was disputed, all parties agreed that the defendants (collectively "TPIC") owned the gas rights below 8,000 feet and the oil rights in both the shallow and deep zones. In 2004, Tellus sued TPIC, alleging that it had produced Tellus's shallow gas through one if its wells known as the A-1 well. After much pretrial litigation and a two-month jury trial, the trial judge declared that the plaintiffs were the rightful owners and submitted the plaintiffs' conversion and negligence claims to a jury. The jury returned a general verdict in favor of the defendants, and both sides appealed. Finding no reason to reverse, the Supreme Court affirmed the jury verdict and the trial court's declaratory judgment. View "Tellus Operating Group, LLC, v. Texas Petroleum Investment Co." on Justia Law

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Anadarko Petroleum Corporation petitioned the Mississippi State Oil and Gas Board to determine the propriety of costs that Kelly Oil Company was attempting to charge to Anadarko as a nonconsenting owner in a force-integrated drilling unit. The Board determined that all costs Kelly Oil was attempting to charge were properly chargeable. The chancery court affirmed the Board's order, and Anadarko appealed. Because the Board's order contained insufficient reasoning and findings of fact for the Supreme Court to conduct an adequate review, the Court vacated the Board's order and remanded the case for further proceedings. View "Anadarko Petroleum Corporation v. State Oil & Gas Board of Mississippi" on Justia Law

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The Pascagoula School District (which contains a Chevron crude oil refinery and a Gulf liquified natural gas terminal) brought suit, seeking a declaration that a new law that mandated that revenue the District collected from ad valorem taxes levied on liquified natural gas terminals and crude oil refineries be distributed to all school districts in the county where the terminals and refineries were located was unconstitutional and requesting injunctive relief. All parties filed for summary judgment. After a hearing, the trial judge ruled that the law was constitutional, and the plaintiffs appealed that decision. Because the Supreme Court found the contested statute violated the constitutional mandate that a school district's taxes be used to maintain "its schools," it reversed and remanded the case for further proceedings. View "Pascagoula School District v. Tucker" on Justia Law

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The central issue in this case was whether an oil company could deduct reasonable processing and investment costs from the payments it made to royalty owners. If so, the Supreme Court had to determine whether Mississippi code 53-3-39 was applicable in calculating the damages owed to the royalty owners for unreasonable deductions. Upon review, the Supreme Court affirmed the chancellor's holding that reasonable processing and investment costs could be deducted from royalty owners' payments. However, the Court determined that the chancellor erred by failing to apply 53-3-39 to calculate damages. Thus, the Court partly affirmed, partly reversed the chancellor's decision, and remanded the case for recalculation of damages. View "Pursue Energy Corporation v. Abernathy" on Justia Law