Posts Authored by Daniel Gerken

Federal government sues Sunoco for pipeline spill in Ohio

The federal government has filed a civil lawsuit against Sunoco Pipeline LP over a 2012 pipeline spill in Wellington, Ohio that forced the evacuation of 70 residents in the Lorain County village, reports the Cleveland Plain Dealer. In United States of America vs. Sunoco Pipeline LP, N.D. Ohio No. 1:17-cv-00689-CAB, the complaint alleges Sunoco discovered a defect in its Fostoria-Hudson gasoline pipeline during an inspection in 2007, nearly five years before a portion of the pipeline ruptured and spilled more than 89,000 gallons of gasoline. For more, read the full story and lawsuit.

Ohio, Oil & Gas Litigation

Sixth Circuit denies rehearing en banc in False Claims Act lease dispute

A divided panel of the U.S. Court of Appeals for the Sixth Circuit has denied a petition for rehearing en banc of its decision to affirm a district court ruling that Ohio residents failed to assert a claim under the False Claims Act (FCA) in a lawsuit challenging oil and natural gas leases entered into by the Muskingum Watershed Conservancy District, according to Mealey’s Fracking Report. On November 21, 2016, a majority of the Sixth Circuit panel in United States ex rel. Harper v. Muskingum Watershed Conservancy District, 6th Cir., No. 15-4406, had affirmed a ruling by U.S. District Court Judge Sara Lioi to dismiss the plaintiffs’ suit, stating “it was clear the relators were not the ‘model whistleblowers’ contemplated by the FCA.”

As reported in Mealey’s, the residents filed a petition for rehearing, arguing the majority opinion “fundamentally misconstrues the FCA’s scienter requirement and directly contradicts a U.S. Supreme Court decision by requiring the pleading of subjective knowledge in order to state the reckless disregard or knowledge element of an FCA claim.” The Muskingum Watershed Conservancy District argued the rehearing should be denied because the Sixth Circuit panel’s decision does not conflict with any Supreme Court ruling and correctly applies the FCA’s definition of “knowing.” Upon review, the same judges who had issued the majority opinion denied rehearing en banc on the grounds that the issues raised in the petition “were fully considered upon the original submission and decision of the case.”

Ohio, Oil & Gas Litigation

Ohio federal judge: Eclipse Resources did not breach contract by declining to drill wells

A federal judge in Ohio has granted a motion for summary judgment in favor of a group of oil and natural gas companies, “concluding they had the contractual right to decline to drill or complete wells under a lease agreement with a landowner” and were not liable for breach of contract, according to Mealey’s Fracking Report. In Eclipse Resources-Ohio, LLC v. Madzia, S.D. Ohio No. 2:15-cv-00177, Eclipse sued Scott Madzia, the landowner, in January 2015, seeking declaratory relief because Madzia threatened litigation regarding Eclipse’s rights pursuant to an oil and gas lease agreement and amendment. Eclipse argued it “had a contractual right to decline to drill or complete wells” on Madzia’s land.

Madzia then moved for summary judgment, seeking injunctive relief. He maintained that Eclipse was liable for breach of contract because the Ohio Department of Natural Resources (ODNR) had concluded the company had violated Ohio law by submitting a “coal affidavit” to obtain permits for wells on Madzia’s land. Mealey’s says Eclipse argued that ODNR “has not conclusively determined” that the company had violated the law by submitting the coal affidavit. U.S. District Court Judge Algenon L. Marbley agreed with Eclipse, ruling in part that “ODNR had allowed the use of recycled coal affidavits on approximately seventy other occasions” and ODNR’s permitting manager had confirmed it was the department’s practice to accept resubmitted coal affidavits when Eclipse had submitted its permit application for Madzia’s wells.  On February 9, 2017, Madzia filed a notice of appeal to the U.S. Court of Appeals for the Sixth Circuit.

Ohio, Oil & Gas Litigation