On Thursday, February 10, 2011, The First Court of Appeals in Houston handed down a decision that affirmed a previous ruling won by our firm, denying the defendants in a pipeline explosion case the opportunity for a rehearing, and simultaneously providing clear direction in future choice of law debates.
The case, Enterprise Products Partners, L.P. and Dixie Pipeline Co. v. Mitchell, et al, involved an explosion in a liquid propane pipeline. The pipeline, which spans 35,000 miles through seven states, ruptured in a rural area outside of Jackson, Mississippi. The leak in the pipeline released over 430,000 gallons of propane into the air, turning it into a highly flammable gas cloud that ignited over a neighborhood near the site of the rupture. When the cloud ignited, the resulting explosion killed two people, injured seven more, and started a fire that burned four homes, seventy acres of farmland, and evacuated sixty families. The families of those who lost loved ones and property filed suit in Harris County against Enterprise Products and Dixie Pipeline.
The issue on appeal began at the trial level, where the defendants’ lawyers asked the court to apply Mississippi damages law to the case, because the plaintiffs were Mississippi residents, and the explosion occurred there. Having the court apply Mississippi law would benefit the defendants greatly because it would drastically limit the amount payable to the plaintiffs, since the laws of Mississippi cap non-economic damages at $1 million. The court sided with the plaintiffs, and ruled that Texas law would apply.
The defendants filed an interlocutory appeal in the First Court of Appeals, which ruled last August that Texas law would govern the case. The defendants then filed a motion for en banc reconsideration of that ruling, which was denied Thursday. In explaining why defendants’ most recent motion was denied, the court pointed to several key factors.
First, the court acknowledged that while the plaintiffs are residents of Mississippi, and the state of Mississippi has an interest in providing for the adequate compensation of injured citizens, the Mississippi damages cap would likely prevent that from happening in this case. Second, the court explained that the defendant companies in this suit have their principle places of business in Texas, and the state of Texas has an interest in protecting defendants who are residents. Third, the injury causing conduct (here, the control and operation of the pipeline) occurred at a central location in Texas. Finally, both parties agreed that Texas law would govern all other issues in the case, and as the court explained, Texas damages laws are at the very least capable of ensuring the plaintiffs compensation equal to that available under Mississippi law.
I will be providing updates as our firm tries to help the victims of this tragedy and their families begin to move on, so please check back.