IADC members David Beck, David Gunn, and Jeff Golub (partners at Beck Redden LLP in Houston), prevailed in a landmark Texas case that cleared their client Enterprise Products Partners of a $535 million trial court judgment. In this 6-year litigation battle that started in a Dallas County Trial Court and ended at the Texas Supreme Court, the state’s highest court recently issued a unanimous opinion that vindicated Beck Redden’s client and that will have a large impact on disputes about partnership formation.
The plaintiff ETP sued Enterprise alleging that the parties had formed a partnership to develop a crude oil pipeline between Cushing, Oklahoma and the Texas Gulf Coast. Enterprise defended by pointing to written contracts in which the parties agreed they would not have a binding relationship unless and until certain conditions were met (including Board approval and definitive LLC agreements). Neither condition was met, and Enterprise urged the trial court to reject the case on summary judgment, but to no avail. In a 2014 trial, a Dallas County jury found a partnership, and the trial court entered a $535 million judgment.
The Dallas Court of Appeals overturned that judgment in 2017, and now the Texas Supreme Court unanimously agreed and also rejected ETP’s attempt to circumvent the contractual conditions precedent.