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Eight ex-employees of Texas sanitation company claim racial discrimination

Eight African American employees of a Texas sanitation company have filed a lawsuit claiming discrimination and retaliation.

Dantrell Patterson, Lamonte Young, Demetrius Patterson, Tadarious Dixon, Keithdrick Patterson, Jarvis Hill, Jermaine Bell and Derrick Robert filed the lawsuit against Sanitation Solutions Inc. in the Marshall Division of the Eastern District of Texas on April 20. The plaintiffs claim that the defendant subjected them to acts of intentional discrimination based on race and color.

The lawsuit claims they were surrounded by a “systemic atmosphere of bigotry” at work. They claim Sanitation Solutions management and co-workers used racial slurs and referred to black employees as “boy,” and that a swastika and nooses were displayed at work locations and on trucks. The plaintiffs allege that they were subjected to harassment and discrimination, and retaliated against after they registered complaints about the treatment. The plaintiffs also claim that white workers were paid more than black employees doing the same work, and received lighter discipline than black workers in similar situations, with some of the plaintiffs being discharged. According to the complaint, when the plaintiffs retained counsel and presented management with a written list of grievances, the remaining employees had their employment terminated.

The plaintiffs are seeking damages, front pay, punitive damages, pre- and post-judgment interest, attorney’s fees, an injunction preventing the defendant from engaging in unlawful practices or retaliating against the plaintiffs, reinstatement, and other proper and necessary relief. A jury trial is demanded.

Pipeline owners file $300 million breach of contract lawsuit against midstream operator

An amended breach of contract lawsuit was filed by Magellan Midstream Partners and Plains All American Pipeline against Stampede Energy, seeking over $300 million in damages over an oil transport deal.

The lawsuit claims that Stampede did not meet minimum volume obligations on the BridgeTex pipeline from March 2015 through 2016, breaching its contract. The BridgeTex pipeline carries around 300,000 barrels per day from Colorado City, Texas to the Gulf Coast. Stampede is a privately held midstream operator.

From mid-2014 to early 2016, oil prices dropped by more than 70 percent, prompting production cuts and leading several energy firms to declare bankruptcy. Pipelines function like toll roads, so they are generally considered to be better protected from commodity price fluctuations, but with fewer barrels to ship, pipelines have been affected by output declines.

An amended petition filed March 22 claimed that Stampede owed the plaintiffs over $311.8 million, including interest and late fees, for breaching its shipping obligations. The BridgeTex firms also filed a claim against Ballengee Interests, which guaranteed payments owed by Stampede.

According to court documents, Stampede agreed in August 2014 to ship 30,000 barrels per day of crude and condensate on BridgeTex, which is about 10 percent of the pipeline’s capacity. Court filings state that Stampede executed a Transportation Service Agreement calling for the company to ship on the pipeline for 29 quarters.

Texas appeals court’s decision shows importance of wording in noncompete agreements

A recent decision by a Texas appeals court demonstrates that the wording of a noncompete agreement must be precise.

In the case, East Texas Copy Systems, Inc. v. Player, the Court of Appeals in Texarkana ruled that a noncompete agreement was nonbinding due to the language used in the agreement.

As part of the sale of a business, the buyer agreed to employ the seller for four years, and the seller agreed not to compete with the buyer in a certain geographic area for a two year period. The noncompete clause stated that if the seller’s employment was terminated “for any reason other than a for cause termination” within two years, then the noncompete clause would no longer be binding. The parties also signed a separate noncompete agreement with identical language regarding the agreement being nonbinding if the seller was terminated for any reason other than for cause.

The seller voluntarily resigned his employment within two years of entering into the agreement and entered into competition with the buyer.

The seller filed a lawsuit seeking a declaration that the noncompete clauses were nonbinding, and the buyer asked the court to enforce the clauses. The trial court found that the seller was not bound by the noncompete agreement. The buyer appealed, arguing that to allow the seller to voluntarily end his employment and begin competing would thwart the purpose of the agreement. The court disagreed, noting that the agreements between the parties covered other issues besides the agreement not to compete. The court held that the plain language of the clause allowed the seller to compete, because both parties agreed that the employment had terminated without cause.

The case illustrates the importance of making sure that a noncompete agreement actually protects the interests that the parties intend to protect.

Texas property owners file class-action suit against Devon Energy over royalties

A class-action lawsuit has been filed by Texas property owners alleging that Devon Energy used sham transactions to underpay natural gas royalties.

On January 6, class-action status was granted by U.S. District Judge Ed Kinkeade in Dallas, allowing the four individuals who brought the lawsuit to represent the interests of thousands of landowners. The judge found that there were common legal issues, that Devon Energy owed a common duty to the members of the class, and that a formula can determine the damages owed to each class member, if any.

The landowners claim that the production arm of Devon Energy sold the natural gas to an affiliate, Devon Gas Services, at a low well head price. Devon Gas Services then used its Bridgeport plant to process the gas and deduct a 17.5 percent processing fee from royalty checks, the lawsuit alleges.

The plaintiffs called the processing fee “unreasonable and lucrative” and stated that Devon calculates royalties based on the “artificial” price it received from its own affiliate rather than what it was paid by unaffiliated third parties. The lawsuit also claims that after the gas left the processing plant, Devon and its affiliates made a profit selling the residue gas to third parties, but did not pay royalty owners a share of those profits.

Investment firms sue oil company, alleging breach of contract

An oil company was sued by two investment firms in Harris County District Court in Texas over an alleged breach of contract.

SSG Advisors, LLC and Chiron Financial LLC filed the lawsuit against Daybreak Oil and Gas Inc., claiming that Daybreak violated an agreement among the three companies. The investment firms claim they are owed approximately $1.1 million.

According to court documents, the relationship among the parties began in May 2015. The engagement agreement, which was renewed on two occasions, called for SSG and Chiron to provide investment banking services to Daybreak.

The lawsuit claims that Daybreak failed to submit payment for three months under the most recent engagement agreement, which the firms claim is still active. The lawsuit also names Platinum Partners, LP; Maximillian Resources, LLC; and Zach Weiner, a portfolio manager based in New York City, as co-defendants.

The investment firms allege that Daybreak and Weiner held discussions about restructuring the company, without informing them. The lawsuit claims that Daybreak and Maximillian sold a significant portion of Daybreak’s assets to a third party, which was allegedly a breach of the engagement agreement. According to court documents, SSG and Chiron learned of the sale by reading a press release issued by Daybreak.

Multi-million dollar oil and gas lawsuit set for trial

A lawsuit is set for trial in Texas between two well-known oil and gas names over revenue and ownership interests, with hundreds of millions of dollars in damages claimed.

Mesa Petroleum, founded by T. Boone Pickens, filed suit against J. Cleo Thompson and three exploration and production companies based in Midland. Mesa alleging that Patriot Resources, Baytech and Delaware Basin Resources violated the terms of an investment contract.

The complaint alleges that Thompson and the Midland companies are liable for fraud, breach of contract, tortious interference with a contract, and breach of fiduciary duty. The defendants deny the allegations. The trial in Pecos, Texas is expected to take several weeks.

In January 2007, Thompson and Baytech signed a “participation agreement” with Mesa that committed the companies to offering Mesa an ownership stake of 15 percent in asset acquisitions over five years. According to court documents, Mesa paid $125,000 to enter into the investment agreement and $1 million to participate in an investment known as the Red Bull Prospect.

Mesa claims that the company “elected to participate” in all of the investments that were offered, but the defendants allegedly took new investment opportunities for themselves, failing to offer interests to Mesa as required by the participation agreement. The investments that Mesa claims it missed out on include royalties, revenues, leases, easements, production payments, wells and facilities. Thompson and the other companies claim that they nullified the agreement.

Texas drill pipe supplier files lawsuit against company alleging breach of contract

A breach of contract lawsuit was filed by a Houston, Texas drill pipe supplier against a North Dakota company.

The lawsuit was filed in the U.S. District Court for the Southern District of Texas Aug. 31 by Vallourec Drilling Products USA Inc. (Vallourec) against B.J.’s Drill Stem Testing, Inc. d/b/a Drill Tech LLC (Drill Tech).

According to the lawsuit, Drill Tech purchased 60 joints of 4-inch heavyweight drill pipe and 620 joints of 4-inch drill pipe from Vallourec. The complaint alleges that the drill pipe was delivered, but Vallourec has not received the full payment of $1,282,748.40.

Vallourec claims that Drill Tech paid a deposit of $384,824.52, but failed to pay the remaining balance. According to the complaint, the parties had agreed that the pipe would be delivered “Ex-Works,” meaning that it would be considered delivered once the seller made the goods available for pickup by the buyer. Vallourec claims that it made the pipe available for pickup, but Drill Tech failed to take physical possession after delivery, and Vallourec has therefore incurred storage and other expenses. The plaintiff further alleges that it has been unable to resell the goods, despite commercially reasonable attempts.

The plaintiff is seeking payment for past-due amounts, pre- and post-judgment interest, court costs, attorney fees and other relief to which it may be entitled. A jury trial has been requested.

Texas drilling company sued for employment discrimination

A lawsuit has been filed accusing a Texas drilling company of racial discrimination.

Andrew Collins filed the lawsuit in U.S. District Court for the Southern District of Texas, Houston Division, alleging that Noble Drilling violated Title VII of the Civil Rights Act.

Collins, an African American resident of Harris County, claims that he was subjected to harassment, threats, intimidation, discrimination and disparate treatment because of his race, which caused him embarrassment and emotional distress.

According to the lawsuit, Noble Drilling denied Collins the privileges, benefits, terms and conditions of employment. The complaint alleges that the company retaliated against Collins by transferring him to a less desirable offshore facility after he reported racial and sexual harassment. Noble Drilling threatened Collins with disciplinary action and wrongfully terminated his employment, the lawsuit claims.

Collins seeks back pay including lost wages and benefits, compensatory damages, attorney fees and costs, as well as other relief to which he may be entitled. A trial by jury has been demanded.

Noble Drilling, based in Sugar Land, Texas, operates about 30 drilling rigs, including 14 jackups and 16 semi-submersibles. In 2015, revenue from Shell Oil accounted from 49 percent of the company’s income. The company announced mass layoffs in January 2016.

Texas Appeals Court rules against lessee in offset well dispute

The Fourth Court of Appeals in San Antonio, Texas found that a lessee had failed to prove that it had drilled an offset well as required by oil and gas leases.

In the case, Shirley Adams et al. v. Murphy Exploration & Production Co.-USA, the lessors and royalty owners sued lessee Murphy for breach of contract, claiming that Murphy had failed to drill an offset well to protect two tracts of land against drainage.

Murphy was assigned oil and gas leases executed by lessors in the Eagle Ford Shale. The parties did not dispute that the leases required the lessee, if a well was completed, to drill an offset well to prevent drainage. A lower court granted Murphy’s motion for summary judgment based on evidence that a well had been drilled and Murphy’s expert’s testimony that it was an offset well.

The Fourth Court of Appeals held that in order for Murphy’s summary judgment burden to be met, Murphy had to conclusively prove that the well was an offset well as a matter of law, thus disproving the element of breach. However, the appeals court found that Murphy failed to meet that burden, as it failed to prove that the well met the commonly understood meaning of the term “offset well,” which is a well used for protection from drainage. The appeals court reversed the grant of summary judgment and remanded the case to the trial court for further proceedings.

Texas oil networking company files lawsuit for tortious interference, unfair competition

A lawsuit has been filed by a networking website for oil workers, claiming that a Texas man who founded the company stole data to launch a competing business.

Rigzone.com claims to host the resumes of over 2 million workers in the oil and gas industry. Workers post their resumes for free, and recruiters pay a fee for access. David W. Kent Jr. founded Rigzone in March 2000 and later sold it to DHI Group, subsequently starting Oilpro.com, a rival site. Rigzone and DHI Group sued Kent and Oilpro in federal court on June 10.

The lawsuit alleges that Kent owned approximately 70 percent of Rigzone when he sold it to DHI Group for $51 million in August 2010, while staying on as president under a consulting agreement. DHI Group claims that Kent received over $35 million from the sale, but the firm alleges that Kent set up a backdoor entry into Rigzone’s website and took its data.

According to the lawsuit, Kent set up Oilpro.com, a competing website, in 2013, posting an online timer that counted down to the minute when his non-compete agreement expired on Oct. 1, 2013. DHI Group also alleges that Kent convinced the core team that operated Rigzone to join him at Oilpro.

Kent was reported to have been arrested March 30 in Texas and faces federal criminal charges of conspiracy and wire fraud for allegedly hacking into Rigzone’s website. If found guilty, he could face up to 25 years in prison.

The lawsuit alleges that Kent sought to sell Oilpro to DHI Group for $20 million. According to the lawsuit, Kent wrote to the CEO of DHI Group saying that he built Oilpro with the purpose of selling it to them, saying that it “seemed to work for all parties before.”

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