Force Majeure Case Decided

On November 15, 2012 the U.S. District Court for the Northern District of New York in the matter of Beardslee v. Inflection Energy, LLC, No. 3:12-CV-00242, 2012 U.S.
Dist. LEXIS 163177 (N.D.N.Y. Nov. 15, 2012) held that New York’s “moratorium” on issuing drilling permits involving hydraulic fracturing does not necessarily create a “force majeure event” that extends the primary term of an oil and gas lease.  The term “force majeure event” is usually restricted to acts of God such as floods, wind, lighting, and ice storms, and really unusual events such as war, pestilence, epidemics, etc.  Some courts have interpreted riots and strikes to be force majeure events as well.  New York gas lessors have invoked the New York “moratorium” on issuing drilling permits involving hydraulic fracturing as a force majeure event and that was challenged in the Federal Court.  Now that the lessors have lost this case at the Trial Court level it
will be interesting to see if they choose to appeal it.  Future updates will keep you posted as to the results of any appeal taken from this case.