Opinion

Opinion issued February 10, 2011.

In The

Court of

Appeals

For The

First District

of Texas

————————————

NO. 01-09-00653-CV

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Enterprise Products Partners, L.P. and Dixie Pipeline Company , Appellants

V.

Catherine

Mitchell, Individually and as AdministratrIX

to the Estate of Mattie L. Mitchell, Deceased, and as AdministratRIX to the

Estate of Nacquandrea Mitchell, Deceased, O'Neal Pacley, Linda Mitchell, Johnny

Jones, Carolyn Pacley, Samida Mitchell, Frank Pacley, Jim Pacley, Calvin

Bettis, Lulu Bloxson, Ollie Mae Bonner, Johnny Pacley, James L. Pacley, Sanita

Johnson, Sharon Willis, and Rochelle Nabores , Appellees

On Appeal from the 55th District Court

Harris County, Texas

Trial Court Case No. 0835840

OPINION ON REHEARING

Appellants,

Enterprise Products Partners, L.P. (“Enterprise”) and Dixie Pipeline Company

(“Dixie”), filed a motion for en banc reconsideration of our August 19, 2010

opinion. We treat the motion for en banc

consideration as a motion for rehearing, grant rehearing, and withdraw our

August 19, 2010 opinion and judgment and issue this opinion and judgment in

their place. The disposition of the case

remains unchanged.

Enterprise and Dixie challenge the

trial court’s June 29, 2009 interlocutory order ruling that Texas law should

govern the issue of recoverable compensatory damages with regard to all

wrongful death and personal injury claims arising from a pipeline

explosion. In one issue, Enterprise and

Dixie argue that Mississippi law, rather than Texas law, should govern

recoverable compensatory damages.

We

affirm.

Background

On

the morning of November 1, 2007, a liquid propane pipeline operated by Dixie

ruptured in a rural area near Carmichael, Mississippi. Upon its release into the air, the liquid

propane changed to gas and formed a cloud that rose over a nearby neighborhood

and ignited into a large fireball that could be seen and heard for miles

around. The resulting fire killed two

people, injured seven others, and resulted in the evacuation of approximately

60 families from their homes. Four homes

were destroyed, several others were damaged, and more than 70 acres of the

woods and grassland surrounding the site of the explosion were burned. The National Transportation Safety Board

(NTSB) reported that approximately 10,253 barrels, or 430,000 gallons, of

propane were released.

Appellees,

Catherine Mitchell, O’Neal Pacley, Linda Mitchell, and Johnny Jones, as

wrongful death beneficiaries of the two decedents, Mattie L. Mitchell and

Nacquandrea Mitchell, along with Catherine Mitchell, Catherine Pacley, and

Samida Mitchell as personal injury claimants and other plaintiffs who suffered property

damage (collectively, plaintiffs) sued Dixie and Enterprise, Dixie’s managing

partner, [1] in Harris County,

Texas. Dixie and Enterprise moved the

trial court to apply Mississippi law to the issue of the amount of recoverable

compensatory damages, arguing that the Restatement (Second) of Conflicts of

Law’s balancing test favors application of Mississippi’s $1 million cap on

noneconomic damages in civil actions. [2] Dixie and Enterprise argued that, as the

domiciliary state of the plaintiffs, Mississippi has the greatest interest in

determining the amount of compensation to be awarded to its residents and in

protecting defendants doing business in its state. The plaintiffs argued that Texas law should

apply because both Enterprise and Dixie have their principal place of business

in Texas, the pipeline was manufactured in Texas, and Enterprise and Dixie

control the pipeline’s multi-state operation from Texas.

The trial court issued an order

ruling that “the issue of recoverable compensatory damages with regard to all

wrongful death and personal injury claims is to be governed by Texas law” and

certifying the order for interlocutory appeal pursuant to Texas Civil Practice

and Remedies Code section 51.014(d). This

interlocutory appeal was filed. [3] Neither party disputes the application of

Texas law to the remaining issues.

It is undisputed that Dixie and

Enterprise are both Delaware corporations whose principal place of business is

Houston, Texas. All of the wrongful

death and personal injury plaintiffs are Mississippi residents and domiciliaries. [4] It is likewise undisputed that the failed

segment of pipeline was manufactured in 1961 in Texas, that it was subsequently

installed in Mississippi, and that the explosion occurred in the state of

Mississippi. Furthermore, the portion of

the pipeline that exploded was part of a 1,300 mile pipeline in a 35,000 mile

pipeline system and spanned from Texas through Louisiana, Mississippi, Alabama,

Georgia, South Carolina, and North Carolina.

Decisions about Enterprise and

Dixie’s operations were made in Texas.

Dixie’s corporate representative indicated that its policies, procedures,

and manuals all come from the Houston, Texas office, that the pressure, flow,

and operation of valves and pumps are monitored and conducted from Houston via

a computer system whose control system is likewise in Houston, and that the

Houston employees are generally responsible for the operation of the

pipeline. Furthermore, key employees

such as the manager of pipeline integrity, the pipeline integrity engineer for

this particular pipeline, and the pipeline controller responsible for

monitoring this pipeline on the day of the explosion are all located in

Houston, Texas. None of the pump

stations or other facilities along the pipeline’s route through Mississippi are

manned on a routine basis, although Dixie does have about five employees who

work in Mississippi.

Choice of Law

Which

state’s law governs an issue is a question of law for the court to decide. Torrington

Co. v. Stutzman , 46 S.W.3d 829, 848 (Tex. 2000). Therefore, we review the trial court’s

decision to apply Texas law de novo. See Minnesota Mining & Mfg. Co. v.

Nishika Ltd. , 955 S.W.2d 853, 856 (Tex. 1996).

We

decide choice of law issues by applying the “most significant relationship”

test found in the Restatement (Second) of Conflict of Laws. Torrington

Co. , 46 S.W.3d at 848 ; Hughes Wood

Prods., Inc. v. Wagner , 18 S.W.3d 202, 205 (Tex. 2000). Section 6 of the Restatement sets out general

factors relevant to the choice of law:

(a) the needs of the interstate

and international systems,

(b) the relevant policies of

the forum,

(c) the relevant policies of

other interested states and the relative interests of those states in the

determination of the particular issue,

(d) the protection of

justified expectations,

(e) the basic policies

underlying the particular field of law,

(f) certainty,

predictability and uniformity of result, and

(g) ease in the

determination and application of the law to be applied.

Torrington

Co. , 46 S.W.3d at 848 (quoting Restatement

(Second) of Conflict of Laws § 6(2) (1971)); see also Hughes Wood Prods. , 18 S.W.3d at 205 .

Section

145 of the Restatement provides specific considerations relevant when applying

the general conflict of laws principles to a tort case:

(a) the place where the injury

occurred,

(b) the place where the

conduct causing the injury occurred,

(c) the domicile, residence,

nationality, place of incorporation and place of business of the parties, and

(d) the place where the relationship,

if any, between the parties is centered.

Torrington

Co. , 46 S.W.3d at 848 (citing Restatement

(Second) of Conflict of Laws § 145(2) (1971)); see also Hughes Wood Prods. , 18 S.W.3d at 205 & n.1.

Section

145 also provides, “The rights and liabilities of the parties with respect to

an issue in tort are determined by the local law of the state which, with

respect to that issue, has the most significant relationship to the occurrence

and the parties under the principles stated in [section] 6.” Restatement

(Second) of Conflict of Laws § 145(1) (1971); see also Hughes Wood Prods ., 18 S.W.3d at 205 (quoting section

145(1) of Restatement and holding that court of appeals erred by concluding

that Texas law had most significant relationship to case and thus Texas law

should apply to all issues rather than considering which state had most

significant relationship to exclusive remedy issue, which was specific issue to

be resolved). The Restatement’s “most

significant relationship test” includes a presumption in favor of applying the

law of the place of the injury. Section

146, governing personal injuries, and section 175, governing wrongful death,

create a presumption that

the law of the state where

the injury occurred determines the rights and liabilities of the parties,

unless, with respect to the particular issue, some other state has a more

significant relationship under the principles stated in section 6 to the

occurrence and the parties, in which event the local law of the other state

will be applied.

Restatement (Second) of

Conflict of Laws §§ 146, 175.

Using this presumption in favor of

the law of the state where the injury occurred as the starting point for our

analysis, we consider the various factors listed in the Restatement to

determine if Texas has a greater interest in the determination of the

particular issue than Mississippi, the state where the injury occurred. See id.

§ 175 cmt. d. (also providing that courts should examine “the purpose sought to

be achieved by their relevant local law rules and the particular issue

involved”). The number of contacts with

a state is not determinative; rather, we evaluate the contacts in light of the

state policies underlying the particular substantive issue. Torrington

Co. , 46 S.W.3d at 848 .

In analyzing choice of law in the

context of compensatory damages, the Texas Supreme Court has stated:

The primary purpose of

awarding compensatory damages in civil actions is not to punish the defendant,

but to fairly compensate the injured plaintiff.

A state’s compensatory damages law balances the need to compensate the

plaintiff against the goal of protecting resident defendants from undue liability

and excessive litigation.

Considering

the purpose of compensatory damages, contacts such as the site of the injury or

where the tortious behavior occurred, which are important in determining which

state’s laws govern liability, are less important. Rather, the most important contacts in

determining which state’s law governs compensatory damages will usually be the

“ones with the most direct interest in the plaintiff’s monetary recovery and/or

the most direct in protecting the defendant against financial hardship.”

Id. at 848–89

(internal citations omitted).

In Torrington , the supreme court analyzed

which state’s law should apply to compensatory damages in a helicopter crash

that killed two marines. Id. at 833 . The marines were North Carolina residents

whose domiciles were in Nebraska and Michigan, and at least two of the

defendant corporations, Bell and Textron, had their principal place of business

in Texas. Id. at 849 . In holding that

the trial court correctly applied Texas law, the court stated,

We have noted that a

plaintiff’s domiciliary state usually has a strong interest in seeing its

compensatory damages law applied. But

Texas, as the forum state, also has a significant interest in protecting

resident defendants, such as Bell and Textron.

And other Restatement factors

weigh in favor of applying Texas law.

For example, much of the conduct that allegedly caused the injury

occurred in Texas. The helicopter that

was involved in the crash was manufactured and delivered in Texas, several

communications about the bearing failure . . . were issued

from Texas, and Torrington sent communications about the investigation to Bell

in Texas. Moreover, Texas is the forum

state and the parties acquiesced to the trial court’s application of Texas law

to the liability issue. “Ease in the

determination and application of the law to be applied” is one of the factors

to be considered in resolving choice-of-law questions under the Restatement .

Id. at 850

(internal citations omitted).

Here,

Mississippi’s contact with the tort arises from the fact that all of the

wrongful death and personal injury plaintiffs were residents and domiciliaries

of Mississippi at the time of the explosion.

Mississippi has an interest in ensuring that its citizens receive

adequate compensation so that the costs of injured residents are not borne by

the public, but Mississippi’s damages cap does not further that interest. Moreover, while the explosion and its

resulting injuries occurred in Mississippi, we note that the pipeline could

have exploded at any point along its 1,300 mile span. See id.

at 849 ; Duncan v. Cessna Aircraft Co. ,

665 S.W.2d 414, 421 (Tex. 1984) (rejecting using location of incident alone as

method for determining which state’s law should govern).

The policy behind Mississippi’s Tort Reform Act of 2004,

including the compensatory damages cap, was essentially “to end the state’s

‘hell-hole’ reputation and attract more business and insurers to

Mississippi.” See generally Miss. Code Ann .

§ 11-1-60 (2004) (providing limit of $1 million in awarding non-economic

damages against any civil defendant other than health care liability defendant,

providing limit of $500,000 in awarding non-economic damages in medical

liability actions, and defining noneconomic damages as “subjective,

nonpecuniary damages” arising from an injury); H.B. 13, 2004 Leg., 2d Ex. Sess.

(Miss. 2004) (amending section 11-1-60 and others); Mark Behrens & Cary

Silverman, Now Open for Business: The

Transformation of Mississippi’s Legal Climate, 24 Miss. C. L. Rev . 393, 415–16 (2005) (discussing “comprehensive

civil justice reform bill, H.B. 13” that, among other provisions, amended

section 11-1-60 to limit non-economic damages).

Those policy concerns are not implicated here. Mississippi’s interest in applying its

damages cap to lawsuits in that state has little applicability to a lawsuit

brought in a different state against defendants domiciled in that different

state where the tortious conduct also occurred in that other state. When the incident occurred, Enterprise and

Dixie had only limited business activity in the state of Mississippi, and the

pipeline, which was built through the state of Mississippi in the 1960s, was

not built in reliance on this reform, as the Tort Reform Act was passed in

2004.

Texas, however, is

the forum state with a significant interest in protecting resident defendants,

and the parties have acquiesced to the trial court’s application of Texas law

to all other issues in this case. B oth of the defendants, Enterprise and Dixie,

are corporations with their principal place of business in Texas, and the

decisions regarding maintenance and operation of the pipeline — i.e., the conduct causing the injury — occurred in Texas. Additionally, Texas’s compensatory damages law is at least equally

capable of serving the interest of fairly compensating injured plaintiffs. See

Torrington Co. , 46 S.W.3d at 848 (holding that “we must evaluate the

contacts in light of the state policies underlying the particular substantive

issue” and that “[t]he primary purpose of awarding compensatory damages in

civil actions is . . . to fairly compensate the injured plaintiff”). Thus,

here, just as in Torrington , all of

these factors weigh in favor of applying Texas law. See id.

at 848 .

Enterprise and Dixie argue in their

brief that Torrington is

distinguishable from the present case because Torrington involved “the unique setting of an aviation crash” while

this case does not, because “the unique background of the Mississippi

legislation limiting compensatory damages” creates a stronger policy interest

in favor of applying Mississippi law than was present in Torrington , and because all of the plaintiffs here are residents

and domiciliaries of Mississippi, unlike the claimants in Torrington , whose residences and domiciles implicated three

different states. We disagree. As we have already discussed, the “unique

background” of the Mississippi damages cap is not implicated by these facts, as

neither Enterprise nor Dixie maintained any significant business presence in

Mississippi. See id. at 849 ; Duncan ,

665 S.W.2d at 421 . Furthermore, even

considering that all of the wrongful death and personal injury plaintiffs in

this case share the same state residence and domicile, that one factor does not

overwhelm the other considerations. See Torrington Co. , 46 S.W.3d at 848–49;

Hughes Woods Prods. , 18 S.W.3d at 205 ;

Restatement (Second) of Conflict of Laws

§ 145(1).

We conclude that Texas law should

be applied to the issue of compensatory damages available to the wrongful death

and personal injury plaintiffs in this case.

Thus, the trial court’s interlocutory order was proper.

We overrule Enterprise and Dixie’s

sole issue.

Conclusion

We

affirm the interlocutory order of the trial court.

Evelyn

V. Keyes

Justice

Panel

consists of Chief Justice Radack and Justices Keyes and Higley.

[1]

Enterprise was the managing

partner of Dixie at the time of the explosion and had been Dixie’s managing

partner since July 1, 2005.

[2]

See Miss.

Code Ann . § 11-1-60 (2004) (providing

limit of $1 million in awarding non-economic damages against any civil

defendant other than health care liability defendant, providing limit of

$500,000 in awarding non-economic damages in medical liability actions, and defining

noneconomic damages as “subjective, nonpecuniary damages” arising from an

injury).

[3] Section 51.014(d) of the Civil

Practice and Remedies Code allows interlocutory appeal of otherwise

unappealable orders if:

(1) the parties agree that the order involves a

controlling question of law as to which there is substantial ground for

difference of opinion;

(2) an

immediate appeal from the order may materially advance the ultimate termination

of the litigation; and

(3) the

parties agree to the order.

Tex. Civ. Prac. & Rem. Code Ann. § 51.014(d) (Vernon

2008).

[4]

Some of the plaintiffs claiming

property damage are residents or domiciliaries of other states, but, by its

plain language, the trial court’s order does not affect the measure of damages

on the claims of property damage, and neither party argues for the application

of law from a jurisdiction other than Texas or Mississippi.