Caldwell v. Kriebel Resources Co., LLC, No. 1305 WDA 2012 (Pa. Super. Ct. June 21, 2013). The Pennsylvania Superior Court affirmed the dismissal by the Court of Common Pleas of plaintiffs’ amended complaint. Plaintiffs had entered into an oil and gas agreement in 2001 with defendant Kriebel Resources Co., LLC. The agreement provided for a two-year term that could be extended so long as oil or gas was being produced. Plaintiffs sought to terminate the lease, alleging that defendants had only engaged in shallow gas drilling and had not initiated development activities for the Marcellus shale. The Superior Court declined to read an implied covenant to develop all strata of natural gas into the 2001 agreement, and also rejected plaintiffs’ claim that defendants had breached an implied covenant to develop in “paying quantities.” The court also was not persuaded that it should impose a “good faith” standard for all aspects of the industry that affect natural gas production and therefore give plaintiffs an opportunity to show that defendants had not acted in good faith as to the amount of gas being produced from plaintiffs’ property.
Vodenichar v. Halcon Energy Properties, Inc., No. 13-cv-00360 (W.D. Pa. Apr. 4, 2013). Plaintiff landowners initiated this class action lawsuit alleging breaches of contracts against energy companies. Plaintiffs had previously initiated a federal lawsuit against Halcon Energy Properties, Inc. (Halcon) under the court’s diversity jurisdiction, which they voluntarily dismissed after Halcon indicated it would join two Pennsylvania companies. After plaintiffs reinitiated their lawsuit in Pennsylvania state court, Halcon removed the action, claiming that it fell within the scope of the Class Action Fairness Act. The federal court remanded the action, finding that the “home state exception” applied because plaintiffs had established that at least two-thirds of the plaintiffs and the “primary defendants” (which did not include Halcon) were Pennsylvania citizens.