2/15/19 - News
Devon Energy Defeats Multimillion-Dollar Claim After Two-Week Trial
After a two-week trial in which partner Logan Johnson led the SHJ team representing Devon Energy Production Company, a Houston jury delivered a complete defense win for Devon, which had been in a decades-long dispute with EP Energy Company over saltwater disposal for their operations in Utah. In a 10-2 verdict, the jury ruled that Devon did not fail to comply to its end of the parties’ agreement and owes none of the $3.3 million that EP sought.
In 1996, EP and Devon were both operating in the Altamont-Bluebell fields in northeastern Utah, and they agreed to permit disposal of saltwater, a byproduct of oil drilling, into each other’s saltwater disposal systems. By 2002, there was an imbalance of 2 million barrels in EP’s favor, but within a decade the imbalance shifted to Devon’s favor.
In 2013 EP asked Devon to enter into an agreement in which the parties would pay one dollar per barrel of water disposed in the others system on a going forward basis, which Devon agreed to do. EP also insisted Devon pay retroactively for each barrel of the imbalance, which was 3.32 million barrels of water. Devon balked at this latter-day fee imposition, and in 2014 EP sued for breach of contract.
The verdict hinged in part on an old letter located by lead attorney Logan, which set out the original terms of the agreement. The document revealed that both parties contemplated an equal exchange of approximately 900 barrels a day. The evidence also showed that both parties were exchanging far more than that by the second year of the relationship, and that neither side had complained.
“This was the right call by the jury, and the whole team is thrilled for the client,” Logan said.
Texas Lawbook: Jury Hands Defense Win to Devon in Saltwater Dispute