Justia California Court of Appeals Opinion Summaries

Articles Posted in Energy, Oil & Gas Law
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A tax sale of real property described in the deed as pertaining to surface rights does not include oil and gas rights which are "restrictions of record" in a previously recorded oil and gas lease. The Court of Appeal held that defendant was the surface owner of the property at issue, but he did not own an interest in the oil and gas under the property. The court modified the judgment to show that upon termination of the oil and gas lease, any remaining oil and gas rights described in the 1939 Memorandum of Oil and Gas Lease revert to the surface owner. View "Leiper v. Gallegos" on Justia Law

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Vaquero filed suit challenging provisions of a new zoning ordinance requiring permits for new oil and gas exploration, drilling, and production. The ordinance imposed a wide range of environmental and other standards on permit applicants, adopting two procedural pathways for obtaining permits when the proposed activity would be conducted on split-estate land zoned for agriculture. Vaquero alleged that the new provisions violated its constitutional rights to equal protection and due process. The trial court rejected Vaquero's claims and the company appealed. Based on its interpretation of a line of relevant United States Supreme Court cases, the Court of Appeal held that the new ordinance did not violate Vaquero's right to due process because the owner of the surface rights does not have final control over how an owner of mineral rights uses those rights. Rather, the final authority over permits is retained by the County. In regard to the equal protection claim, the court applied the deferential rational basis test and held that the board of supervisors rationally could have decided the availability of an expedited seven-day pathway would promote cooperation between owners of mineral rights and owners of surface rights and reduce conflicts, which is a legitimate public purpose. View "Vaquero Energy v. County of Kern" on Justia Law

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Plaintiff Atlantic Richfield Company (ARCO) filed a petition in June 2014 to overturn a March 2014 order of defendant Central Valley Regional Water Quality Control District1 (Water Board) that sought to impose liability for remediation of metallic and acidic water pollution from an abandoned mine, the owner of which was the subsidiary of ARCO’s predecessors in interest. The trial court granted the petition in January 2018. The Water Board appealed, contending the trial court applied the wrong legal standard to determine whether the ARCO predecessors incurred direct liability for control over activities resulting in the hazardous waste that the mine discharges. The Court of Appeal agreed the trial court employed too restrictive a standard in evaluating the evidence, and therefore reversed and remanded for reconsideration of the record under the proper standard. View "Atlantic Richfield v. Central Valley Regional Water Quality etc." on Justia Law

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In the November 2014 election, a majority of the City of Rialto’s (the City) voters approved Measure U, a ballot measure adopted by the City which imposed an “annual business license tax” of “up to One Dollar [($1.00)] per year for each One (1) cubic foot of liquid storage capacity” on “[a]ny person engaged in the business of owning[,] operating, leasing, supplying[,] or providing a wholesale liquid fuel storage facility” in the City. The four plaintiffs-appellants in these actions, Tesoro Logistic Operations, LLC (Tesoro), Equilon Enterprises, LLC (Equilon), SFPP, L.P. (SFPP), and Phillips 66 Company (P66), owned all of the wholesale liquid fuel storage facilities, also known as tank farms or terminals, in the City. Plaintiffs were engaged in the business of “refining and marketing fuel nationwide.” Gasoline and other fuels were transported from refineries to plaintiffs’ facilities in the City, where the fuels were placed in large storage tanks and mixed with additives before they were are transported to gasoline stations or other purchasers for retail sale. Beginning in 2015, the City assessed Measure U taxes on plaintiffs based on the liquid fuel storage capacity of plaintiffs’ wholesale liquid fuel storage tanks in the City. Plaintiffs paid the taxes under protest and filed these actions challenging Measure U’s validity on statutory and constitutional grounds. Plaintiffs moved for judgments on the pleadings, and for summary judgment or summary adjudication, then the City filed its own motions for judgments on the pleadings. Following a hearing, the trial court concluded there were no disputed issues of fact, that all of the motions presented the same questions of law, and that the Measure U tax was a valid business license tax. The court thus denied plaintiffs’ motions, granted the City’s motions, and entered judgments in favor of the City. In these appeals, plaintiffs renewed their legal challenges to Measure U. After review, the Court of Appeal concluded the Measure U tax was an invalid real property tax. Thus, the Court reversed judgments in favor of the City, and remanded to the trial court with directions to grant plaintiffs’ motions for judgments on the pleadings and to enter judgments in favor of plaintiffs on plaintiffs’ complaints. View "Tesoro Logistic Operations, LLC v. City of Rialto" on Justia Law

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The Court of Appeal affirmed the trial court's order and judgment upholding the Water Board's determination that Barclay was jointly and severally responsible with real party in interest Shell Oil for the cleanup and abatement of petroleum hydrocarbon compounds and other contaminants (the petroleum residue or waste) at the former Shell tank farm in Carson, California. The court rejected Barclay's claims that the Water Board failed to hold the type of hearing required by the Administrative Procedure Act and its Administrative Bill of Rights; the payments Shell made to the Water Board constituted a conflict of interest tainting the proceedings and the RCAO; Barclay's actions are protected by the safe harbor of Water Code section 13304, subdivision (j); Barclay did not cause or permit a discharge of waste because its actions were not performed with the required knowledge of the hazards created; and the trial court erred in refusing to admit and consider additional evidence proffered by Barclay. View "Barclay Hollander Corp. v. California Regional Water Quality Control Board" on Justia Law

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This appeal centered on whether a solar energy project proposed by a local agency, the Lake Arrowhead Community Services District (District), was exempt from, or whether the District must comply with, the zoning ordinances of the city in which the project is to be developed, the City of Hesperia (City). The District adopted a resolution that its proposed solar energy project was both (1) absolutely exempt from the City's zoning ordinances under Government Code section 53091(e) and (2) qualifiedly exempt under section 53096(a), following the requisite determination that there was no feasible alternative to the proposed location of the project. The City successfully challenged the resolution in the underlying superior court proceedings, where the court issued a judgment in favor of the City and a related writ of mandate directing that the District and its board comply with the City's zoning ordinance prior to implementing the project. The Court of Appeal affirmed: because the District's proposed project included the transmission of electrical energy, the exemption contained in section 53091(e) did not apply to the project; and because the administrative record did not contain substantial evidence to support the District's board's finding that there was no feasible alternative to the proposed location of the project, the District prejudicially abused its discretion in determining that the exemption contained in section 53096(a) applied to the project. View "City of Hesperia v. Lake Arrowead Comm. Serv. Dist." on Justia Law

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The Center for Biological Diversity appealed the denial of its petition for a writ of mandate challenging an environmental impact report (EIR) prepared by the California Department of Conservation, Division of Oil, Gas and Geothermal Resources (Department) pursuant to a law known as Senate Bill No. 4. (Stats. 2013, ch. 313, sec. 2, enacting Sen. Bill No. 4; hereafter, Senate Bill No. 4.) Senate Bill No. 4 added sections 3150 through 3161 to the Public Resources Code to address the need for additional information about the environmental effects of well stimulation treatments such as hydraulic fracturing and acid well stimulation. As relevant here, Senate Bill No. 4 required the Department to prepare an EIR “pursuant to the California Environmental Quality Act ([Public Resources Code] Division 13 (commencing with Section 21000) [CEQA]), to provide the public with detailed information regarding any potential environmental impacts of well stimulation in the state.” The Department prepared and certified an EIR. The Center filed a petition for writ of mandate and complaint for declaratory and injunctive relief, challenging the EIR under CEQA and Senate Bill No. 4. The trial court sustained a demurrer to the Center’s cause of action for violations of CEQA, and subsequently denied the petition for a writ of mandate. The Court of Appeal found no reversible error in the denial of mandamus relief and affirmed. View "Center for Biological Diversity v. CA Dept. of Conservation" on Justia Law

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The Department of Water Resources (DWR) applied to the Federal Energy Regulatory Commission (FERC or Commission) to extend its federal license to operate Oroville Dam and its facilities as a hydroelectric dam (referred to as the Oroville Facilities Project, Project, Settlement Agreement or "SA"). The plaintiffs brought this action in the superior court to stay the license procedure on the premise the environmental effects of relicensing the dam concern the operation of the dam and that jurisdiction to review the matter lies in the state courts pursuant to the California Environmental Quality Act. They claimed that a CEQA document offered to support the DWR’s application to FERC failed to consider the impact of climate change on the operation of the dam for all the purposes served by the dam. The superior court dismissed the complaint on the ground that predicting the impact of climate change is speculative. The plaintiffs appealed. A federal license is required by the Federal Power Act for the construction and operation of a hydroelectric dam. The license is issued by FERC. With one relevant exception, the FPA occupies the field of licensing a hydroelectric dam and bars review in the state courts of matters subject to review by FERC. Plaintiffs did not seek federal review as required by 18 C.F.R part 4.34(i)(6)(vii)(2003). The Court of Appeal concluded it lacked jurisdiction to hear this case. It returned the case to the trial court with an order to dismiss. View "County of Butte v. Dept. of Water Resources" on Justia Law

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This case arose from competing claims to a portion of the Yuba Goldfields, a 10,000-acre valley on both sides of the Yuba River near Marysville. At issue was whether an arbitration award resolving a dispute between plaintiff Cal Sierra Development, Inc. (Cal Sierra), and Western Aggregates, Inc., served as res judicata to bar Cal Sierra’s lawsuit against Western Aggregates’ licensee George Reed, Inc., and the licensee’s parent Basic Resources, Inc. The Court of Appeal concluded yes. View "Cal Sierra Development v. George Reed, Inc." on Justia Law

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Substantively, in three somewhat interconnected claims, Joe and Yvette Hardesty (collectively, Hardesty) attacked State Mining and Geology Board (Board) findings, contending the trial court misunderstood the legal force of his 19th century federal mining patents. He asserted he had a vested right to surface mine after the passage of SMARA without the need to prove he was surface mining on SMARA’s operative date of January 1, 1976. He argued the Board and trial court misapplied the law of nonconforming uses in finding Hardesty had no vested right, and separately misapplied the law in finding that his predecessors abandoned any right to mine. These contentions turned on legal disputes about the SMARA grandfather clause and the force of federal mining patents. Procedurally, Hardesty alleged the Board’s findings did not “bridge the gap” between the raw evidence and the administrative findings. Hardesty also challenged the fairness of the administrative process itself, alleging that purported ex parte communications by the Board’s executive director, Stephen Testa, tainted the proceedings. The Court of Appeal reviewed the facts, and found they undermined Hardesty’s claims: the fact that mines were worked on the property years ago does not necessarily mean any surface or other mining existed when SMARA took effect, such that any right to surface mine was grandfathered. However, the Court agreed with the trial court’s conclusions that, on this record, neither of these procedural claims proved persuasive. Accordingly, the Court affirmed the judgment denying the mandamus petition. View "Hardesty v. State Mining & Geology Board" on Justia Law