Justia U.S. 1st Circuit Court of Appeals Opinion Summaries

Articles Posted in Energy, Oil & Gas Law
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The First Circuit affirmed the judgment of the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA) Title III court allowing certain expenses incurred by the Puerto Rico Electric Power Authority (PREPA) under a contract entered into with LUMA Energy, LLC and LUMA Energy ServCo, LLC (collectively, LUMA) as entitled to administrative expense priority pursuant to section 503(b)(1)(A) of the Bankruptcy Code, holding that there was no error.In 2017, the Financial Oversight and Management Board for Puerto Rico (FOMB) filed for bankruptcy on behalf of PREPA. In 2020, PREPA entered into a contract with LUMA, a private consortium, to transfer the operations and management of PREPA to LUMA. At issue was whether the Title III court erred in allowing expenses incurred by PREPA under the contract as entitled to administrative expense priority. The First Circuit affirmed, holding (1) section 503(b)(1)(A) applies in Title III cases; (2) the Title III court did not abuse its discretion in applying the requirements of section 503(b)(1)(A); and (3) the Title III court correctly held that 48 U.S.C. 2126(e) prevents it from reviewing challenges to FOMB's certification decision. View "Union de Trabajadores de la Industria Eléctrica y Riego v. Puerto Rico Electric Power Authority" on Justia Law

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The First Circuit affirmed the judgment of the PROMESA Title III court granting the motion of the Financial Oversight and Management Board to assume certain long-term power supply contracts on behalf of the Puerto Rico Electric Power Authority (PREPA) under 11 U.S.C. 365 and 48 U.S.C. 2161, holding that there was no clear error.On appeal, Appellants - PREPA's primary labor union, an energy company that had other contracts with PREPA, and multiple environmental groups - argued that the Board abused the assumption procedure set forth in section 365 to avoid the competitive bidding process ordinarily required for long-term power supply contracts under Commonwealth law. The First Circuit affirmed, holding (1) the Board's motion to assume was ripe for resolution by the Title III court and remained so on appeal; and (2) the Title III court properly granted the Board's motion to assume the renegotiated contracts under the customary standards of section 365(a). View "Campamento Contra Las Cenizas v. Puerto Rico Electric Power Authority" on Justia Law

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In this complaint alleging violations of the Clean Water Act (CWA), 33 U.S.C. 1251 et seq., and the Resource Conservation and Recovery Act (RCA), 42 U.S.C. 6901 et seq., the First Circuit vacated the order of the district court granting a motion to stay the proceedings under the so-called doctrine of primary jurisdiction, holding that the district court improperly stayed the case.Conservation Law Foundation, a not-for-profit organization, brought this suit against ExxonMobil Corporation, ExxonMobil Oil Corporation, and ExxonMobil Pipeline Company (collectively, ExxonMobil), alleging unlawful violations at ExxonMobil's petroleum storage and distribution terminal in Everett, Massachusetts. After the district court denied ExxonMobil's motion to dismiss, ExxonMobil moved to stay the case under the doctrine of primary jurisdiction until the Environmental Protection Agency (EPA) issued a decision on ExxonMobil's pending permit renewal application for the Everett terminal. The First Circuit vacated the stay order, holding that the district court erred in granting a stay under the doctrine of primary jurisdiction until EPA issues a new permit for ExxonMobil's Everett terminal. View "Conservation Law Foundation v. ExxonMobil Corp." on Justia Law

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The First Circuit affirmed the judgment of the district court denying a preliminary injunction barring construction of Segment 1 of a planned five-segment electric transmission power corridor in Maine, holding that Plaintiffs failed to show a likelihood of success on the merits.The planned transmission power corridor was part of a larger project that would run from Quebec, Canada to Massachusetts. After its performance of an environmental assessment, the Army Corps of Engineers issued a permit authorizing Central Maine Power, a private company, to take three actions in Segment 1. Plaintiffs, environmental organizations, sought preliminary injunctive relief. The district court rejected Plaintiffs' challenges and denied relief. Plaintiffs then brought this interlocutory appeal and filed an emergency motion for injunction pending appeal. The First Circuit affirmed, holding that Plaintiffs' challenges did not demonstrate a likelihood of success on the merits. View "Sierra Club v. United States Department of Army Corps of Engineers" on Justia Law

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The First Circuit affirmed the order of the federal district court allowing Rhode Island's motion to return to state court its state court complaint against several oil and gas companies for damage caused by fossil fuels, holding that the allegations in Rhode Island's complaint did not give rise to federal-officer jurisdiction.In 2018, faced with rising sea levels and other property damage from extreme weather events caused by climate change, Rhode Island sued, in state court, several oil and gas companies for damage caused by fossil fuels while those companies misled the public about their products' true risks. The oil companies removed the case to federal district court. Rhode Island moved for the case to be remanded to state court. The district court granted the motion and ordered the case remanded to state court. The First Circuit affirmed, holding that the district court did not err in finding that there was no subject matter jurisdiction under the federal-officer removal statute. View "State of Rhode Island v. Shell Oil Products Co., LLC" on Justia Law

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The First Circuit affirmed the decision of the district court dismissing this lawsuit challenging Defendants' alleged manipulation of natural gas pipeline capacity for failure to state a claim, holding that any differences between two cases filed with regard to this issue did not warrant a different outcome.In 2017, a group of economists published a report alleging that Defendants were able to increase electricity prices in New England by buying up and refusing to release excess transmission capacity in the Algonquin pipeline. In response, a group of electricity end consumers filed suit alleging violations of federal and state antitrust and unfair competition law. Thereafter, PNE Energy Supply LLC, a wholesale energy purchaser, filed this lawsuit also challenging Defendants' conduct in neither using nor releasing reserved pipeline capacity. The district court dismissed the electricity consumers' suit. The First Circuit affirmed, holding that the antitrust claims failed on their merits because Defendants' conduct occurred pursuant to a tariff approved by the Federal Energy Regulatory Commission. At issue was whether the logic from the electricity consumers' suit also applied to this lawsuit brought by PNE. The First Circuit held that the holding in the first lawsuit controlled and affirmed the district court's dismissal of PNE's lawsuit. View "PNE Energy Supply LLC v. Eversource Energy" on Justia Law

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The First Circuit granted the petition filed by Algonquin Gas Transmission, LLC for rehearing as to remedy in this case where the First Circuit vacated the grant of an air permit by the Massachusetts Department of Environmental Protection (DEP) for a proposed natural gas compression station and remanded the case to that agency, holding that the remedy granted is remand without vacatur.On June 3, 2020, the First Circuit issued an opinion vacating the air permit for the proposed compressor station to be built as part of Algonquin's Atlantic Bridge Project, holding that the DEP did not follow its own established procedures for assessing whether an electric motor was the Best Available Control Technology (BACT). The Court's remedy was to vacate the air permit and remand to the DEP to redo the BACT. Given new developments that will materially the "balance of equities and public interest considerations," the First Circuit altered its remedy and revised its opinion to reflect that the remedy granted is remand without vacatur. View "Town of Weymouth v. Massachusetts Department of Environmental Protection" on Justia Law

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The First Circuit vacated an air permit granted by the Massachusetts Department of Environmental Protection (DEP) for a proposed natural gas compression station set to be built in Weymouth, Massachusetts as part of Algonquin Gas Transmission, LLC's Atlantic Bridge Project, holding that the DEP did not follow its own established procedures for assessing whether an electric motor was the Best Available Control Technology (BACT).The Atlantic Bridge Project is a natural gas pipeline connecting the Northeastern United States and Canada. The DEP approved Algonquin's non-major comprehensive plan application for the station and granted the station's air permit, certifying its compliance with the Massachusetts Clean Air Act (CAA), Mass. Gen. Laws ch. 111, 142A-142F. Petitioners, nearby municipalities and two citizen-petition groups, argued that DEP violated the CAA and related laws and regulations. The First Circuit (1) vacated the air permit and remanded to DEP for it to conduct further proceedings, holding that the DEP's final decision excluding an electric motor was arbitrary and capricious; and (2) resolved the remaining issues in favor of DEP. View "Town of Weymouth v. Massachusetts Department of Environmental Protection" on Justia Law

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In this case involving a dispute between Portland Pipe Line Corporation (PPLC) and the City of South Portland (the City) the First Circuit certified three questions to the Maine Law Court because this clash raised important questions of state law preemption doctrine and statutory interpretation that are unresolved and may prove dispositive.The parties to this dispute were PPLC, a Maine corporation engaged in the international transportation of oil, and the City, which enacted a municipal zoning ordinance prohibiting the bulk loading of crude oil onto vessels in the City's harbor. The ordinance prevented PPLC from using its infrastructure to transport oil from Montreal to South Portland via underground pipelines. PPLC appealed the district court's dismissal of its claims, arguing that the ordinance was preempted by Maine's Coastal Conveyance Act and was in conflict with federal constitutional law. The First Circuit declined to address the federal questions, concluding that the case lacked controlling precedent and presented difficult legal issues that warranted certification to the Law Court. View "Portland Pipe Line Corp. v. City of South Portland" on Justia Law

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The First Circuit affirmed the district court's judgment dismissing Plaintiffs' claims that Defendants' conduct violated section 2 of the Sherman Act, 15 U.S.C. 2, and various state antitrust and consumer protection laws, holding that the claims were barred by the filed-rate doctrine.Defendants were two large energy companies that purchased natural gas from producers, resold it to retail natural gas consumers throughout New England, and transported the natural gas along the interstate Algonquin Gas pipeline. Plaintiffs, a putative class of retail electricity customers in New England, brought this action alleging that Defendants strategically reserved excess capacity along the pipeline without using or reselling it, which ultimately resulted in higher retail electricity rates paid by New England electricity consumers. The district court dismissed the claims, concluding that they were barred by the filed-rate doctrine and, alternatively, for lack of antitrust standing and Plaintiffs' failure to plausibly allege a monopolization claim under the Sherman Act. The First Circuit affirmed without reaching the district court's alternative grounds for dismissal, holding that all of Plaintiffs' claims were barred by application of the filed-rate doctrine. View "Breiding v. Eversource Energy" on Justia Law