On June 25, 2015, the United States Court of Appeals for the Third Circuit affirmed the District Court for the Middle District of Pennsylvania’s prior entry of summary judgment in favor of the lessor plaintiffs on the counterclaims of the lessee defendant, Cabot Oil and Gas Corporation. Harrison v. Cabot Oil & Gas Corp., No. 12-3613 (3d Cir. June 25, 2015).
According to Cabot, the plaintiffs’ lawsuit was a repudiation of the lease because it sought declaratory relief invalidating the lease. Thus, Cabot’s counterclaims asserted it was entitled to an extension of the five-year lease term for the length of time it took to defeat the plaintiffs’ suit. This concept is known as “equitable extension,” and courts have repeatedly permitted its application in other oil-and-gas-producing jurisdictions such as Louisiana and Texas. See Harrison v. Cabot Oil & Gas Corp., Civ. No. 3:10-cv-00312, Doc. No. 51 at p. 12. Continue Reading