“6 Texas Supreme Court Oil And Gas Cases To Watch”
A $535 million fight over what constitutes a pipeline partnership — and potentially any business partnership in Texas — headlines a stack of high-stakes oil and gas industry cases that the Texas Supreme Court is poised to consider this term.
The court, complete with a new justice on the bench, starts hearing oral arguments Tuesday. The term will be highlighted by the court refereeing the soured joint venture between pipeline giants Energy Transfer Partners LP and Enterprise Products Partners LP. It will also weigh several significant oil and gas contracting issues, including how broadly to interpret royalty conveyances, what level of negotiations between parties triggers a binding contract and in a case involving ConocoPhillips Co., how oil and gas rights pass from one generation to another.
The court may be interpreting specific contracts in each of these cases, but attorneys say there’s always some prospective impact from the decisions — especially since there are still plenty of oil and gas leases and other contracts out there that are decades old that could spark legal fights over how they should be interpreted in the present day.
“Any way a court decides on how to construe a contract … means that’s going to be useful in other cases dealing with contracts,” said Thompson & Knight LLP appellate partner Rich Phillips, who is based in Dallas. “Even if it’s not the exact same words, the principles are things you can use in a completely different context as long as you’re talking about construing a contract.”