Covington possesses a premier energy litigation practice.
In both the domestic US and international arenas, we have extensive experience representing clients in disputes arising from the energy industry, including upstream production of oil and natural gas; downstream refining and marketing of oil, gasoline, natural gas, natural gas liquids, and petrochemicals; transportation of oil and natural gas; electric generation; wholesale electric transmission; and wholesale bulk power transactions.
We have represented energy sector clients in some of their most significant disputes, including lawsuits and arbitrations involving multi-billion dollar controversies. We frequently represent energy clients in litigation and arbitration, governmental investigations and enforcement actions, and administrative proceedings. Notable work includes:
- Prosecuting multi-billion dollar claims in the Court of Federal Claims in connection with Government breaches of Outer Continental Shelf (OCS) leases.
- Representing energy companies and investors in arbitrations against foreign governments after the expropriation or unlawful treatment of investments.
- Defending a major energy company in a formal investigation and litigation at FERC in connection with alleged natural gas market manipulation and affiliate abuse.
- Appearing for a trade association in high-profile cases affecting the energy sector, such as environmental challenges to OCS lease sales and exploration plans, climate change litigation against energy companies, and Supreme Court review of antitrust claims against a downstream joint venture between two major companies.
- Recovering $780 million of insurance proceeds for liabilities arising from the grounding of the Exxon Valdez.
- Representing upstream oil and gas companies in challenging Minerals Management Service royalty payment orders for OCS oil and natural gas production.
- Giving strategic advice to an energy company in connection with class action litigation concerning royalty calculations for natural gas.
- Representing natural gas pipeline operators in responding to a CFTC investigation concerning alleged market manipulation.
- Representing a services company executive in connection with an FCPA investigation relating to a liquefied natural gas (LNG) project in Africa.
- Defending an energy and chemical company against class action lawsuits alleging injuries and property damage due to environmental releases.
- Representing a California electric utility in evidentiary proceedings at the FERC to establish disputed terms of must-run contracts with merchant generators.
- Defending a mining company and other businesses in lawsuits brought by foreign plaintiffs under the Alien Tort Claims Act.
Our litigation experience encompasses both private party litigation and disputes with government agencies before state courts, federal district courts, and the Court of Federal Claims. We also have represented energy clients in important cases before appellate courts and the Supreme Court of the United States.
Our arbitration lawyers have represented energy sector clients and investors in proceedings constituted by the International Center for Settlement of Investment Disputes (ICSID), the Iran-U.S. Claims Tribunal, the International Chamber of Commerce (ICC), the London Court of International Arbitration (LCIA), and the Stockholm Chamber of Commerce, as well as ad hoc tribunals in various forums.
We also have represented energy clients in investigations and regulatory proceedings involving many governmental agencies, including the following:
- Federal Energy Regulatory Commission
- Commodity Futures Trading Commission
- Federal Trade Commission
- Securities and Exchange Commission
- Environmental Protection Agency
- Department of the Interior
Covington lawyers with substantial energy litigation and arbitration experience include Steven Rosenbaum, who has obtained $1.7 billion in judgments and settlements for energy clients in actions against the government in the Court of Federal Claims; Robert Fleishman, who regularly represents clients in connection with FERC and CFTC enforcement proceedings; and Thomas Cubbage, who has handled a variety of domestic litigation and international arbitration in both the oil and gas and power sectors. Other members of the energy litigation team in our Washington, San Francisco, and London offices include many recognized as leading lawyers by Chambers USA and Chambers Latin America, such as former FERC Commissioner William Massey, international arbitration advocates Oscar Garibaldi, Eugene Gulland, and Gaëtan Verhoosel, international arbitration and FCPA lawyer O. Thomas Johnson, environmental lawyer Theodore Garrett, insurance coverage litigators Donald Brown, David Goodwin, and Mitchell Dolin, and appellate advocate Robert Long.
Representative Matters
Our lawyers have represented energy clients in the following types of representative subject matters:
Upstream U.S. Oil and Gas Operations
- Court of Federal Claims Litigation
- Represented a coalition of eleven oil and gas companies whose efforts to pursue development of their California offshore oil and gas leases were thwarted by the federal government.
- Represented other oil companies, including ExxonMobil, Shell, and Chevron, in successful breach of contract lawsuits involving leases offshore Alaska, Florida, and North Carolina.
- Royalty Disputes
- Represented an oil producer in litigation that invalidated the Minerals Management Service (MMS) effort to impose “price trigger” conditions on royalty relief under the Deep Water Royalty Relief Act.
- Represented OCS producers in successful challenge to MMS royalty payment orders that disputed their reliance on FERC tariff rates when determining transportation allowances.
- Represented an association of independent producers in challenging attempted MMS assessment of royalties on certain take-or-pay settlement proceeds.
- Represented a natural gas liquids producer in successful challenge to MMS royalty payment orders premised on unpublished agency guidance.
- Represented a natural gas producer in its response to a state court decision concerning the valuation of gas in “marketable condition” and potential private class action claims.
- Environmental Disputes
- Represented the American Petroleum Institute as amicus in case alleging fossil fuel producers are responsible for greenhouse gas emissions and climate change that resulted in Hurricane Katrina damage.
- Represented an oil company and its subsidiaries in a variety of litigation in several states involving alleged contamination caused by naturally occurring radioactive materials (NORM).
- Represented the API and numerous energy companies as intervenors in litigation concerning MMS five-year leasing programs and the adequacy of environmental assessments for particular OCS lease sales.
- Agency and Congressional Investigations
- Represented an oil and gas company and its executive in connection with congressional hearing to examine absence of “price trigger” conditions on royalty relief for deepwater OCS leases.
Downstream U.S. Oil and Gas Operations
- Environmental Disputes
- Represented a petroleum refiner concerning new source review enforcement matters under the Clean Air Act, including negotiation of consent decrees.
- Toxic Tort Claims
- Represented an energy company in defending numerous toxic tort claims relating to alleged environmental emissions from an oil refinery in Corpus Christi, Texas.
- Represented subsidiaries of an energy company in defending class action and mass joinder cases alleging personal injuries due to environmental emissions in Illinois, Mississippi, and Pennsylvania, including successful Daubert challenges to plaintiffs’ experts and court-approved class action settlements.
- Antitrust Litigation
- Represented the API as an amicus curiae in Texaco, Inc. v. Dagher, 547 U.S. 1 (2006), arising from an antitrust challenge to a refining and marketing joint venture.
- Insurance Coverage Disputes
- Represented an oil refinery in a significant business interruption insurance claim that resulted in a multi-hundred million dollar recovery for the insured.
- Represented, as lead trial counsel, a major integrated oil and gas company in its lawsuit against more than 100 insurers over more than $2 billion of coverage for environmental cleanup liabilities associated with some 5,000 sites.
- Represented an energy company in obtaining a global nine-figure resolution from its historic CGL insurers for widespread environmental cleanup liabilities at refineries and other operational sites.
- Represented a refining company in seeking insurance coverage for premises owner asbestos claims.
- Construction and Other Contractual Disputes
- Represented a subsidiary of an energy company in a multi-million dollar contractual dispute with the design-builder of a groundwater remediation facility.
Wholesale Natural Gas and Petroleum Markets
- Market Manipulation Claims
- Represented a major energy company in a formal investigation and litigation at FERC in connection with alleged natural gas market manipulation.
- Represented a local distribution company in a FERC investigation regarding alleged violations of the agency’s natural gas capacity release program.
- Represented natural gas pipeline operators in an CFTC investigation concerning alleged market manipulation and affiliate abuse.
- Represented the API in the Market Manipulation Rulemaking proceeding for wholesale petroleum markets.
- Antitrust Litigation
- Represented the API as an amicus curiae in Mac’s Shell Service Inc. v. Shell Oil Prods. Co., No. 08-240 (U.S. 2010), concerning the alleged “constructive” termination of a franchisor who sued under the Petroleum Products Marketing Act.
- Preemption Litigation
- Represented the API as plaintiff in lawsuits in three states over the validity of state laws requiring refiners to sell unblended gasoline to distributors and retailers.
Oil and Natural Gas Transportation
- Environmental Disputes
- Represented a pipeline in federal and state enforcement proceedings regarding PCB contamination of pipelines in numerous states.
- Represented an oil company in its appellate challenge to a multi-billion dollar punitive damages award in litigation arising from an oil spill.
- Insurance Coverage Disputes
- Represented Exxon Corporation in multi-forum claims for coverage of losses arising out of the grounding of the tanker Exxon Valdez, resolved when a consortium of international underwriters led by Lloyd's and various Scandinavian companies agreed to settle for $780 million.
- FERC Proceedings
- Represented various parties in numerous FERC natural gas pipeline tariff proceedings.
Electric Generation, Transmission, and Bulk Power
- Antitrust Litigation
- Represented a merchant electric generator in obtaining dismissal or summary judgment in a half-dozen private antitrust suits involving wholesale electricity markets in California, the Pacific Northwest, and the mid-Atlantic states.
- FERC and State Commission Proceedings
- Represented a California electric utility in evidentiary proceedings at the FERC to establish disputed terms of reliability must-run contracts with merchant generators.
- Represented a significant electric generator in a state investigation of price spikes in the wholesale electricity and natural gas markets.
- Represented an energy trading executive in connection with a formal FERC investigation regarding alleged electricity market manipulation.
- Environmental Disputes
- Represented electric utilities in enforcement proceedings regarding new source review requirements under the Clean Air Act.
Natural Gas and Electric Distribution
- State Commission Proceedings
- Represented a local distribution company in state proceedings regarding allegations of imprudence and improper cost allocation.
- Insurance Coverage Disputes
- Represented a major utility in a successful trial involving insurance coverage for environmental liabilities.
- Represented utilities in seeking coverage for environmental liabilities, including remediation costs for manufactured gas plant sites.
International Arbitration
- Investor-State Arbitration
- Represented a major international energy company in a multi-billion dollar ICSID proceeding against the Republic of Venezuela, relating to expropriatory and other acts of the Venezuelan government.
- Represented an independent US oil and gas company in a multi-billion dollar ICSID arbitration against another Latin American state, in a dispute arising out of alleged breaches of a bilateral investment treaty and a production sharing agreement.
- Represented investors in Yukos Oil Company in a Stockholm Chamber of Commerce arbitration against the Russian Federation relating to the Russian government’s liquidation of Yukos.
- Represented a French oil and gas independent in an ICSID arbitration against a Latin American state, in a dispute arising out of alleged breaches of a bilateral investment treaty and several production sharing agreements.
- Represented an oil and gas company in an ad hoc arbitration against a host state under a bilateral investment treaty and UNCITRAL rules relating to the denial of VAT refunds, and related proceedings in the English courts in defense of the US$75 million award in favor of the client.
- Represented the claimants in an ICSID arbitration against the Argentine Republic relating to investments in the natural gas industry.
- Represented an oil and gas company in presenting the largest of all claims brought before the Iran-U.S. Claims Tribunal.
- Commercial Arbitration
- Represented a major international energy company in a pending ICC arbitration against a state-owned oil company, seeking contractual indemnification relating to discriminatory measures taken by the host government against our client’s interests.
- Represented a party in an arbitration in London under the UNCITRAL rules arising out of the construction of an oil refinery in a European state.
- Represented a Brazilian utility in an ICC arbitration under Brazilian law relating to the construction of a combined cycle thermoelectric power plant.
- Represented a party in a US$250 million dispute arising out of the construction of an electricity and desalination plant in a Middle East state.
- Insurance Coverage Arbitration
- Represented the policyholder in an arbitration proceeding as part of the successful multi-forum prosecution of claims for coverage for liabilities arising from the grounding of the tanker Exxon Valdez.
Other Governmental Investigation and Enforcement
- Foreign Corrupt Practices Act (FCPA) Investigations
- Represented an executive of an oilfield services company in a wide-ranging investigation into alleged bribery of Nigerian government officials in connection with the selection of the company to build a major LNG project.
- Represented an major oil company in a SEC investigation into activities in a Middle Eastern nation.
- Represented an oil company in a DOJ investigation of sales in the Middle East.
- Represented an oil company in conducting internal investigations of activities in the former Soviet Union and in West Africa.
- Represented business organizations of all types in routinely advising on FCPA issues, including a major oil company and an independent oil refiner.
- Trade Sanction and Boycott Compliance Investigations
- Represented a multinational oil and gas company in advising on the impact of Middle East trade sanctions programs on technology licensing arrangements and the broader operation of affiliates and joint ventures incorporated outside the United States.
Other Relevant Matters
Covington lawyers also have represented clients in these relevant subject matters:
- False Claims Act (Qui Tam) Litigation
- Represented clients in connection with qui tam lawsuits against businesses in a variety of industries.
- Alien Tort Claims Act Litigation
- Represented mining and smelting company in obtaining dismissal, with Second Circuit affirmance, of Alien Tort Claims Act lawsuit arising from operations in Peru.
- Represented consumer goods company in defending ATCA claims arising from operations in South America.
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