Do you think of Chicago as an oil and gas town? Dallas, yes; Houston, for sure; New Orleans, uh-huh; maybe Bismarck, North Dakota (for the shale gas); and perhaps even New York (because of trading oil futures on the NYMEX).
But wait up. Today Judge Richard Posner wrote about oil and gas leases. Forget that the leases covered acreage in Texas. And never mind that he mainly lays out some basics on "lessor", "lessee", "primary term", "secondary term", and "operator". Judge Posner represents Chicago the way J. R. Ewing does Dallas. And the fact that a Chicagoan wrote about oil and gas sort of tickled Blawgletter.
The case involved a not-so-mundane fight over contempt of an Indiana district court's order. The edict in question called on SonCo Holdings to pay a $250,000 bond to the Texas Railroad Commission, which deals with oil and gas matters in the Lone Star State, and to replace ALCO Oil & Gas as the leases' "operator", which handles drilling wells and so forth. Except the order didn't say the part about getting a new operator in So Many Words. Yet the judge held SonCo in "contempt" for not doing what the order required and as a "sanction" forced SonCo to sign the leases over to ALCO. SonCo appealed.
Judge Posner didn't buy SonCo's point that it didn't violate the order because the order didn't say in So Many Words "get a new operator to replace ALCO". "We said the order was poorly drafted, and meant it wasn't clear." Securities and Exchange Comm'n v. First Choice Mgmt. Svcs., Inc., No. 11-1702, slip op. 10 (7th Cir. May 1, 2012). That differs from calling the order "ambiguous". He noted that "context . . . can disambiguate . . . [and] does so in this case." Id.
The panel vacated the sanction, though, finding that the district court didn't explain how forcing SonCo to give the leases over to ALCO counted as compensation rather than punishment and therefore made the order one for civil contempt rather than the criminal kind.