Appeals Court Throws Out $535M Verdict for Dallas' Energy Transfer in Closely-watched Pipeline Dispute

A state appeals court is tossing out a landmark $535 million jury verdict for Dallas-based Energy Transfer Partners in a closely-watched business dispute over a failed pipeline partnership.ETP won the verdict in 2014 against Houston-based Enterprise Products Partners LP over a failed partnership to build an oil and gas pipeline from Cushing, Okla. to Houston. Enterprise instead negotiated a secret identical deal with Enbridge Partners of Canada for $4.4 billion.The three-judge appeals court in Dallas ruled that ETP and Enterprise had no actual business partnership since initial written agreements required both companies' consent. (See the full decision below).Enterprise praised the court's decision."This case needed decisive action because it had the potential to stand as one of the worst for business in Texas since the Texaco v. Pennzoil decision from the 1980s," said Enterprise lawyer David E. Keltner in a statement. Keltner said businesses need to be able to rely on written contracts and described Energy Transfer's legal action as "partnership by ambush." Enterprise argued the initial agreements included a disclaimer that no partnership existed wihout "definitive documents and board approvals of the two companies."That never took place, Enterprise contended."The business world breathed a sigh of relief today when 'partnership by ambush' was ruled out of bounds in Texas," he said.Energy Transfer could appeal the decision to the Texas Supreme Court.After weeks of testimony in 2014, a Dallas jury ruled in favor of ETP. The jury awarded $319.4 million in actual damages. The trial judge later added another $150 million to the decision. With interest, the total judgment came to $535 million.  Continue reading...

Copyright The Dallas Morning News
Contact Us