Circuit Court rules in favor of utility

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The 7th Circuit Court of Appeals has affirmed summary judgment in favor of a Louisville utility in a dispute as to whether landowners could eject the utility from their property after violating portions of the lease. The appellate judges also declined to certify a question to the Indiana Supreme Court.

Cedar Farm owns land along the Ohio River, which contains Indiana’s only antebellum plantation complex. The complex is on the National Register of Historic Places, and part of the land is considered a “classified forest” by the Indiana Department of Natural Resources. The property has various public uses.

Cedar Farm and Louisville Gas and Electric Co. have had leases for storing and extracting oil and natural gas from portions of the property since 1947. An amended lease in 1996 only allows termination at any time by LG&E, or if the utility fails to make timely payments to Cedar Farm. There is a specific provision that LG&E will pay for damages caused by its operations.

Cedar Farm filed a lawsuit claiming LG&E repeatedly breached the lease and its crews, or crews hired by it, caused damage to the property and even prevented the owners from access the land in December 2008. Cedar Farm wanted to evict LG&E, terminate the lease, and sought damages.

The District Court granted summary judgment in favor of LG&E on the ejectment claim, rejecting Cedar Farm’s arguments that lack of a clause regarding termination for the conduct committed by LG&E did not bar its ejectment action. Cedar Farms later dismissed its damages claim with prejudice so it could appeal the ejectment claim.

In Cedar Farm, Harrison County Inc. v. Louisville Gas and Electric Co., No. 10-2234, the 7th Circuit judges noted that under Indiana law, courts generally will enforce forfeiture or termination clauses in these kinds of leases before drilling begins, but after drilling begins courts are reluctant to enforce even explicit forfeiture provisions if damages can adequately compensate the lessor.

“But to survive summary judgment in this case and under this Lease, Cedar Farm needed to provide specific evidence in order to show a trier of fact the environmental impact of LG&E’s actions and why writing a check would be insufficient,” wrote Judge Ann Claire Williams. “An affidavit or other form of proof along these lines was necessary, and Cedar Farm did not submit, and does not argue it was prevented from submitting, such evidence to the district court.”

The federal appellate court also declined Cedar Farm’s request to certify a question to the Indiana Supreme Court – “whether Indiana would allow a lessor to terminate an oil-and-gas lease where recurring breaches of the lease threaten to inflict intangible, irreparable harm on the subject property.” Cedar Farm seeks to certify the question of whether the type of recurring damage alleged would suffice, which is not an appropriate question for certification, the judges held.


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  1. Great observation Smith. By my lights, speaking personally, they already have. They counted my religious perspective in a pro-life context as a symptom of mental illness and then violated all semblance of due process to banish me for life from the Indiana bar. The headline reveals the truth of the Hoosier elite's animus. Details here: Denied 2016 petition for cert (this time around): (“2016Pet”) Amicus brief 2016: (“2016Amici”) As many may recall, I was banned for five years for failing to "repent" of my religious views on life and the law when a bar examiner demanded it of me, resulting in a time out to reconsider my "clinging." The time out did not work, so now I am banned for life. Here is the five year time out order: Denied 2010 petition for cert (from the 2009 denial and five year banishment): (“2010Pet”) Read this quickly if you are going to read it, the elites will likely demand it be pulled down or pile comments on to bury it. (As they have buried me.)

  2. if the proabortion zealots and intolerant secularist anti-religious bigots keep on shutting down every hint of religious observance in american society, or attacking every ounce of respect that the state may have left for it, they may just break off their teeth.

  3. "drug dealers and traffickers need to be locked up". "we cannot afford just to continue to build prisons". "drug abuse is strangling many families and communities". "establishing more treatment and prevention programs will also be priorities". Seems to be what politicians have been saying for at least three decades now. If these are the most original thoughts these two have on the issues of drug trafficking and drug abuse, then we're no closer to solving the problem than we were back in the 90s when crack cocaine was the epidemic. We really need to begin demanding more original thought from those we elect to office. We also need to begin to accept that each of us is part of the solution to a problem that government cannot solve.

  4. What is with the bias exclusion of the only candidate that made sense, Rex Bell? The Democrat and Republican Party have created this problem, why on earth would anyone believe they are able to fix it without pushing government into matters it doesn't belong?

  5. This is what happens when daddy hands over a business to his moron son and thinks that everything will be ok. this bankruptcy is nothing more than Gary pulling the strings to never pay the creditors that he and his son have ripped off. they are scum and they know it.