Energy Litigation

Given the firm’s size and location, it is not surprising that our experience includes many significant litigation and litigation-related matters involving the energy industry. This experience includes trials, administrative hearings, and arbitrations (some of which involve international transactions and entities) over almost every kind of issue confronting the energy industry today. For example, our lawyers helped an independent production company resolve problems with its financing entities that threatened several company-critical projects. Through around-the-clock negotiations and creative litigation tactics on both coasts and two continents, we were able to breach the impasse in time.

Our ability to assist clients includes, of course, any litigation involving federal or state courts. For example, we have tried numerous oil field injury cases, and many complex commercial cases involving contract, intellectual property, gas supply, and employment issues within the energy industry. But our experience is not limited to the courtroom. Alternative dispute resolution, arbitration and mediation, is increasingly how disputes are resolved, and we have extensive experience in these methods. Often clients also turn to us for assistance with administrative and regulatory agencies as well. We have appeared on behalf of clients before the EPA, FERC, OSHA, RRC, TCEQ, USCG, MMS, and other administrative agencies. Finally, we are always available to help clients avoid problems by working with them on issue evaluation, compliance audits, negotiations, and contract drafting.

Many of our lawyers involved in cases for the energy industry have engineering or other scientific training, and some have served as in-house counsel for energy companies. We often work with the leading experts in energy economics, engineering, and geology.

Types of Energy-Related Litigation

The types of litigation for which we have represented clients cover the full spectrum of disputes and claims that may be found in the energy industry. Some of these are:

• Interest owner disputes
• Operational disputes
• Production disputes
• Contract and commercial litigation
• Pipeline-related disputes
• Environmental matters
• Marine construction disputes
• Title and land disputes, including surface damage disputes
• Non-oil and gas energy disputes
• Extraordinary remedies
• Personal injury and wrongful death
• Intellectual property disputes

Interest Owner Disputes

Our lawyers have handled virtually every type of dispute that has arisen between owners of various interests in oil and gas producing properties, including:

• Disputes between non-operating working interest owners and operators, involving both tort and contract claims
• Disputes over charges incurred by the operator with respect to the terms of a joint operating agreement, including disputes under the applicable accounting procedures
• Litigation arising out of farm-in, farm-out, and joint venture agreements
• Actions arising out of unitization agreements
• Gas balancing disputes
• Drilling disputes concerning "non-consent" rights and back-in interests
• Disputes between royalty interest owners and lessees
• Disputes arising under theories of co-tenancy where no joint operating agreement is in place
• Disputes relating to indemnity issues

Selected Representations

• Our lawyers defended against an attempt by a non-operator to enjoin the drilling of an offshore gas well and to remove the operator after an ex-parteTRO had been granted, in a dispute over whether the non-operator had stood out of that well. We also sought summary dismissal of the non-operator’s claims for breaches of the joint operating agreement with regard to accounting issues and the parties’ gas balancing agreement for a current cash accounting of split-stream production imbalances.
• We sought  summary dismissal on common law forum non conveniens grounds of a fraud suit brought in Texas by putative joint venture partners over a greenfield LPG project in Northwest India.
• Our lawyers represented the interests of an operator of several offshore oil and gas leases. The dispute arose when the operator sold its interest to a third party, resulting in claims by one of the remaining working interest owners who alleged that the operator failed to adequately follow the contractual guidelines for issuance for preferential rights, and also alleged to have sustained substantial damages as a result of the third party purchaser's alleged subsequent failure to meet its obligations toward operating and capital expenditures. The case also involved allegations of future liability for plugging and abandonment liability as well as gas balancing issues. The case settled on the eve of trial. 
• Our lawyers defended the primary working interest group against the royalty owners representing both tort and contract claims alleging wrongful royalty accounting and inappropriate use of a plant split associated with a cryogenic plant located on the unitized premises. In addition to defending the primary working interest group in the state court litigation, our lawyers also defended the working interest owners on various claims which had been voluntarily severed and submitted to arbitration. The case was tried to arbitration. 

Operational Disputes

• Traditional tort and insurance defense litigation arising under oil and gas operations, including personal injury
• Drainage disputes, geophysical trespass, and dry-hole trespass claims
• Disputes arising as a result of the failure of downhole equipment and tubulars
• Disputes among operators and drilling contractors and other service companies
• Disputes regarding allegations of theft of trade secrets with respect to oil and gas intellectual property (including geophysical information)
• Reservoir and aquifer damage claims from various causes

Selected Representations

• We are currently representing two affiliated major oil and gas well services companies in a lawsuit concerning a well perforation. The claimants allege the perforation was performed negligently and in breach of contract. Damages claims involve efforts to remediate the well and lost production and revenues from well shut-in.
• Our lawyers sought damages for loss of a hole due to a defective downhole tool in this products liability suit.
• Our lawyers actively participated in the defense of several personal injury and death suits brought in Texas by victims of the Piper Alpha disaster on behalf of one of the working interest owners in the platform, as well as subsequent litigation over allocation of the proceeds of the relevant insurance.
• We obtained summary dismissal or mediated settlements of hundreds of personal injury/fraud suits arising from the release of hydrofluoric acid from a Texas City plant.

Production Disputes

• Disputes concerning split stream gas and gas balancing
• Gas marketing disputes, including post-production expense issues and sales to affiliated companies
• Royalty pricing disputes
• Drainage disputes
• Production allocation disputes

Selected Representations

• We obtained summary dismissal of claims brought by a non-operator against the operator for breach of the joint operating agreement relating to the pricing of natural gas sold to an affiliate of the operator.
• Our lawyers represented the interests of the defendant in a matter that was initially filed in Galveston County, Texas, but was subsequently compelled to arbitration. The case was filed as a result of difficulties experienced during an onshore frac pac operation resulting in the eventual loss of the hole.
• Our attorneys represented the interests of an operating company defendant who acquired the interest in an oil and gas producing unit located in New Mexico. The dispute involved claims by the plaintiffs that its wells in adjoining leases had been damaged as a result of the water flood operations being conducted on the unit.

Contract and Commercial Litigation

• Gas purchase and sale contract litigation
  - Take or pay litigation
  - Pricing litigation
  - Ratable take litigation
• Litigation arising from the transportation and processing of gas
• Litigation relating to the breach of fiduciary duty by a pipeline operator to the pipeline owners
• Litigation arising out of the purchase and sale of oil and gas properties

• Litigation relating to drilling rig contracts, including mobilization/demobilization disputes, day rate/pricing disputes, force majeure , and contract termination
• Products liability litigation relating to downhole failures of drilling, wireline, perforation tool, and fishing equipment
• Litigation relating to defective drilling rig equipment, including blow-out preventers, automated pipe handling systems, automated zone management systems, mooring systems, and jacking systems
• Represented an energy company in a suit involving a failed LPG project in Asia; obtained forum non conveniens dismissal, which was affirmed on appeal

Selected Representations

• We prosecuted a breach of fiduciary duty case against a pipeline operator and co-owner of the pipeline.
• We defended our client in a take-or-pay, ratable take, and antitrust case.
• Our lawyers defended a class action seeking damages for gas pricing and ratable takes by moving to strike and to enjoin the plaintiffs’ expert from testifying based on breach of a confidentiality agreement.
• Our lawyers prosecuted and settled a purchase option for an interest in a gas processing facility and related pipelines for a working interest owner.
• Our lawyers obtained a jury verdict for a client who had been sued for breach of a gas transportation contract. The verdict was affirmed by the U.S. Fifth Circuit.
• We mediated a breach of contract/fraud suit for the sale of producing offshore oil and gas properties in the Gulf of Mexico.
• We defended a suit against a production company over the drilling company’s refusal to remove its rig from our client’s offshore platform in a foreign country in a dispute over the termination of the drilling contract and demobilization of the rig.
• Our lawyers mediated a breach of contract/fraud/DTPA dispute over ownership of two producing on-shore oil fields.
• Our lawyers represented in arbitration the interests of the defendant in a dispute involving a failed transaction to sell offshore oil and gas producing properties pursuant to a purchase and sale agreement.
• We represented a defendant in a dispute involving the alleged assignment of an offshore drilling vessel which was under contract to the plaintiff/alleged assignee.  The matter was resolved after proceeding to summary jury trial.
• We represented a client in a case that originated with a catastrophic failure at a land-based drilling location during a snubbing operation, resulting in numerous fatalities and injuries. The cases involving the fatalities and injuries have been settled by the various defendant parties. However, the settlements have produced numerous suits in multiple counties and parishes in Texas and Louisiana pertaining to rights of indemnity and additional insured status. Some of the primary issues involved include not only the reasonableness of the underlying settlements, but also questions of controlling law and resulting construction of the indemnity and additional insurance provisions.
• Our lawyers defended the interest of an insurer in litigation arising from settlements in a matter involving various claims and counterclaims for contractual indemnity related to a bodily injury and wrongful death matter. The contractual indemnity arose from underlying drilling contracts as well as from the subsequently negotiated settlement agreements. After a bench trial before the Federal District Judge and subsequent appeals by all parties to the Fifth Circuit Court of Appeals, the matter was resolved for our client.
• We represented a company in a case involving property and environmental damages following performance of chemical processes in a large, above-ground oil storage tank. Treated oil escaped from the tank, resulting in litigation between the facility owner and the lessee responsible for the process. It was our client’s position that the process did not cause the damage to the tank resulting in the escaped product, but instead that the incident was a result of the tank being poorly maintained and far below industry specifications. The case settled after one week of trial proceedings.
• Our attorneys represented the interests of an oil treatment company that sought damages against its broker for failure to procure adequate insurance and related allegations of misrepresentation pertaining to the scope and nature of the insurance acquired. The case settled prior to trial.
• Our lawyers represented the plaintiff in a pipeline capacity dispute over the distinction between firm and variable transportation space.
• Our lawyers represented the defendant in a matter involving a dispute pertaining to deliveries of natural gas during a significant freeze. The plaintiffs alleged damages resulting from a failure in supply. Our attorneys filed a counter action and the matter was dismissed prior to trial.
• Our lawyers represented a major oil company in a dispute involving the long term lease of a major drilling vessel. The dispute involved complaints of excessive down time and inadequacies of the blowout prevention equipment. The matter was resolved through pre-litigation mediation.
• We represented the defendants in a case involving claims of theft of a proprietary chemical treatment process, tortious interference, and related defamation allegations. The case was dismissed prior to trial.

Pipeline-related Disputes

Beirne, Maynard & Parsons has extensive experience representing clients in trials and arbitrations regarding pipeline-related disputes. This background cuts across various practice groups within the firm, including International, Energy, Maritime, Condemnation and Eminent Domain, Real Estate, Labor and Employment, and Intellectual Property.

Our representation of clients in disputes regarding pipeline projects often grows out of relationships developed while representing clients in other matters. For example, while serving the general litigation needs of national energy companies, we have been entrusted with their representation in condemnation and ancillary proceedings concerning major pipeline projects.

While pipeline disputes may take place in a variety of industries, most commonly they occur within the energy industry. Our list of energy clients includes some of the leading companies in the industry.

BMP attorneys are frequent authors and speakers on pipeline related topics, including presentations at the 2006 Pipeline and Gas Opportunities Conference in Houston and publication in 2006 of an article in Pipeline & Gas Technology magazine entitled “Resolving Measurement Disputes.”

Types of Pipeline-related Disputes

Following are some of the types of pipeline-related disputes with which our attorneys frequently assist clients:

• Gas pricing disputes
• Asset purchase option disputes
• Gas processing disputes
• Ratable take disputes
• Fiduciary duty disputes involving pipeline operators
• Dedicated space (firm and interruptible)
• Dedicated volumes
• Metering and related allocation disputes
• Dedicated leases to gathering systems (i.e., any production from a dedicated lease must pass through that pipe)
• Contaminated product
• Out-of-specification production (i.e., input must meet certain product specifications for mechanical reasons, such as coercion as well as marketing – making sure you get the same type of gas out as you put in)
• Quality Bank disputes. A quality bank is a type of common denominator for the gas stream. Some producers will have very rich “gorilla” gas (e.g., 7.0 gallons per MCF), while others will have lean gas (e.g., 2.0 gallons per MCF). The quality bank will ensure that each producer gets a fair allocation at the tailgate (end of the pipe) of the commingled gas. For example, the commingled gas might be 4.5 gallons per MCF, so the entity contributing the rich gas might get 1.5 MCF for every 1 MCF it put in, while the entity contributing the lean gas might get .7 for every MCF it put in. We have represented various energy clients in disputes pertaining to quality bank disputes including interpretation and competing/conflicting quality banks from different pipelines/systems
• Defective and/or negligent construction, design, maintenance, or operation
• Operation disputes wherein shippers might have a claim against the operator for a variety of alleged failures on the part of the operator (e.g., filtering of various injection sites to protect against contamination, maintenance of specifications, and notice of possible contamination to allow the shipper to timely notify downstream customers)
• Tariff/rate disputes
• Indemnity disputes arising out of the tariff

Environmental Matters

• Environmental disputes arising out of the exploration and development of oil and gas properties, including pollution and contamination issues
• Environmental trespass disputes relating to underground storage tanks (USTs), including litigation, regulatory proceedings, and remediation plans

Selected Representations

• Our lawyers handled several suits for environmental trespass to commercial properties/groundwater contamination due to leaking underground storage tanks at gas stations.

Marine Construction Disputes

Our attorneys assisted clients in litigation and arbitration with foreign and domestic shipyards and construction contractors regarding:

• Oil tanker construction, acceptance, and rejection
• Vessel conversion for FPSO purposes
• Drilling rig acceptance and rejection
• Sub-sea mooring and production facility installation
• Construction critical path disruption/cost overruns due to change orders, engineering and design problems, equipment delivery issues, and force majeure
• Classification Society issues

Selected Representations

• We mediated a settlement on behalf of vessel owners in a dispute with a shipyard over construction cost overruns resulting from claimed critical path disruption relating to the conversion of a semi-submersible drilling rig into an FPSO.
• Our lawyers handled the then-largest maritime arbitration in London between the shipyard and the vessel purchaser relating to the rejection of two new oil tankers.

Title and Land Disputes

• Disputes between lessors and lessees relating to allegations of lease violations (i.e., royalty obligations, marketing obligations, drilling and development obligations, and production obligations)
• Boundary disputes (i.e., conflicting surveys, conflicting unit designations and areas of mutual interest)
• Traditional title disputes involving questions of superior title
• Lease cessation due to the failure of various events, including allegations regarding failures to produce in paying quantities
• Pipeline right of way disputes

Selected Representations

• Our attorneys are currently defending an international energy company in a RICO/antitrust/trade secret dispute relating to conflicting claims of ownership of oil and gas lease interests offshore of East Timor.
• Our lawyers defended against numerous highly emotional easement/condemnation counterclaims brought by landowners to halt installation of a high pressure, high temperature oil pipeline.

Non-Oil and Gas Energy Disputes

• Litigation and arbitration regarding the purchase and sale of electric power/cogeneration plants
• Litigation and arbitration regarding long-term electric power purchase agreements
• Adversary proceedings before the FERC relating to the “QF” status of electric power plants
• Take or pay (minimum takes) litigation relating to industrial gas and steam offtake contracts

Selected Representations

• We are currently involved in both arbitration and parallel litigation relating to the sale of an electrical power plant.
• We are currently involved in AAA arbitration proceedings relating to breaches of a long term electrical power purchase agreement focusing on operational issues.
• We are currently involved in adversary proceedings before the FERC related to whether changes in the upstream ownership of an electrical power plant caused it to lose its “QF” status.
• We mediated a take or pay/minimum takes dispute relating to a steam offtake contract.

Extraordinary Remedies

• Disputes seeking the imposition of constructive trusts on oil and gas properties based on various tort theories
• Disputes seeking extraordinary injunctive relief involving operator removal, drilling of wells, and international anti-suit injunctions

Selected Representations

• We served as lead counsel on behalf of the pipeline operator in the North Sea in U.S. proceedings to support an anti-suit injunction issued in parallel UK proceedings relating to a natural gas take or pay contract dispute.
• After issuance of a TRO by a Texas court, our lawyers prevented issuance of a subsequent anti-suit injunction, permitting our clients to pursue litigation of a North Sea drilling rig contract dispute in their preferred forum in the UK.

Personal Injury and Wrongful Death

Claims related to personal injury and death are not uncommon in all aspects of the energy industry. Successful defense of such claims in this industry and others is one of the key areas of distinction for Beirne, Maynard & Parsons.

Selected Representations

• Our lawyers represented the interests of the premise owner corporation in a case involving a tragic explosion at a gathering facility resulting in severe burns and death. We mediated the claim on behalf of the decedent and survivors and pursued underlying workers compensation issues through the administrative trial process.
• We represented a large welding and services contractor at a facility in a matter resulting from a catastrophic explosion in a facility's hydrogen treatment area that resulted in numerous fatalities and severe burns. As a result of this incident, numerous personal injury and wrongful death claims were filed, as well as separate claims for property loss, business disruption, trespass, and related contractual and tort based causes of action. We mediated the injury and death cases involving the facility, while many of the remaining claims have proceeded through litigation.
• Our attorneys represented the interests of the lessee of an oil storage facility. It had contracts for the use of oil storage and oil treatment facilities. The case arose as a result of an explosion and resulting fatality and injuries occurring during a tank cleaning operation. The case settled  prior to trial.
• A personal injury case resulted from a bombing attack which took place at a Columbian drilling facility. The plaintiff claimed that our client failed to provide adequate security against foreseeable terrorist attacks. The client responded that the precautions were far in excess of industry standard, and were satisfactory to deter and prevent foreseeable assaults. Our client’s position was also that the attack in question was not a terroristic attack but instead was a result of a criminal act which was unprecedented and totally inconsistent with historic attacks pursued by terrorist or local guerilla militias. This highly controversial matter was resolved prior to trial.

Intellectual Property Disputes

1. Patent, trademark, and copyright disputes
2. Protective order disputes
3. Actions to prevent disclosure of trade secrets and to enforce non-competition agreements
4. Preliminary and permanent injunctions
5. Counterfeited and infringing goods
6. Appeals and procedural orders in appellate courts
7. Service as expert witnesses and consultants in patent, trade secret, and unfair competition matters
8. Technology areas include oil field equipment, sub-sea pipeline devices, pneumatic and hydraulic devices and control systems, mechanical fluid agitation devices, fluid flow meters and associated electronic equipment, chemical compositions, medical equipment, pharmaceuticals, building materials, computer hardware and software (including e-commerce software), electronic communications products and services, optical lens, electronic safety communications equipment, and lighting equipment

Selected Representations

• Represented a large international energy company in several disputes with licensees regarding misappropriation of trade secrets.
• Represented a Fortune 100 chemical company and its affiliates in commercial litigation, necessitating protective orders to guard the information being produced during discovery.
• Represented a hydrocarbon processing products company in a misappropriation of trade secrets action.
• Represented an electrical power company in a matter pertaining to misappropriation of confidential information.
• Represented an oilfield services company in trade secret and proprietary information injunction cases primarily pertaining to non-competition clauses.
• Represented a client/inventor in a federal court case involving  fraud and infringement of patent, copyright, and trademark. This was the first time in American jurisprudence that a foreign patent was tried to verdict.
• Prosecuted industrial valve counterfeiters for trademark infringement.
• Prosecuted several celebrated trade secret cases against former employees and their new companies.
• Obtained judgment in both a bench trial in patent, trade secret and copyright action, and contempt proceeding affirmed by Federal Circuit three times.
• Defended several combined patent and Lanham Act cases, receiving jury verdicts that were affirmed by the Federal Circuit.