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Finley v. Marathon Oil Company
United States Court of Appeals for the Seventh Circuit
75 F.3d 1225 (7th Cir. 1996)
The Finleys (plaintiffs) leased oil and gas rights on their land to Marathon Oil Company (Marathon) (defendant). A tract of land owned by the heirs of McCroskey was adjacent to the Finley leasehold. The subsurface formation containing the Finleys’ oil extended to under the McCroskey land. The Finleys brought suit against Marathon for breach of the implied covenant to protect against drainage and for breach of fiduciary duty. In support of their claim, the Finleys presented evidence that Marathon’s water-injection method of extracting oil had caused oil to drain from the Finley leasehold onto the McCroskey land. Marathon objected to this evidence and presented its own evidence that there was no recoverable oil in the portion of the Finley leasehold into which Marathon had injected the water. The district court found in favor of Marathon on both claims. The Finleys appealed.
Rule of Law
Holding and Reasoning (Posner, C.J.)
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