Opinion

In RE FIRST RESERVE MANAGEMENT, L.P. FIRST RESERVE CORPORATION, L.L.C. FR XII ALPHA AIV, L.P. FR XII-A ALPHA AIV, L.P. FR SAWGRASS, L.P. AND SAWGRASS HOLDINGS, L.P. v. the State of Texas

Court
Texas Supreme Court
Filed
Jun 23, 2023
Status
Published
Cited by
0 cases
Authority
More cited than 23.5%

holding that a company with the power to elect a majority of members to a homeowners’ association was not liable for decisions made by the association with respect to security measures

How later courts described this case

  • holding that a company with the power to elect a majority of members to a homeowners’ association was not liable for decisions made by the association with respect to security measures
  • “The critical question is whether, in degree and detail, actions directed to the facility by an agent of the parent alone are eccentric under accepted norms of parental oversight of a subsidiary’s facility.”
  • holding that a request for a declaration of nonliability in tort had no basis in law and should have been dismissed because the request violated the rule of Abor v. Black, 695 S.W.2d 564 (Tex. 1985)

Written by the judges who cited it.

The opinion

Supreme Court of Texas

══════════

No. 22-0227

══════════

In re First Reserve Management, L.P.; First Reserve

Corporation, L.L.C.; FR XII Alpha AIV, L.P.; FR XII-A Alpha

AIV, L.P.; FR Sawgrass, L.P.; and Sawgrass Holdings, L.P.,

Relators

═══════════════════════════════════════

On Petition for Writ of Mandamus

═══════════════════════════════════════

Argued February 22, 2023

CHIEF JUSTICE HECHT delivered the opinion of the Court, in which

Justice Lehrmann, Justice Devine, Justice Blacklock, Justice Busby,

Justice Huddle, and Justice Young joined.

Justice Boyd concurred in the disposition.

Justice Bland did not participate in the decision.

On Thanksgiving Eve 2019, serious explosions rocked the TPC

petrochemical processing plant in Port Neches, Texas, resulting in

extensive personal injury and property damage for miles around, the

release of toxic chemicals, and massive litigation. The first suit was filed

the same day. Now there are more than 2,000 cases involving more than

7,000 plaintiffs represented by more than 50 law firms consolidated in

an MDL court. The issue in this original proceeding is whether Plaintiffs

have sufficiently pleaded claims that investors in the plant owner are

directly liable for the damages. We conclude they have not.

I

A

The U.S. Chemical Safety Board’s investigation concluded that a

pipe in the TPC plant ruptured, spilling 6,000 gallons of liquid

butadiene, “a highly flammable petroleum-based chemical used in

plastic production”, which instantly vaporized, ignited, and caused an

explosion that could be felt up to 30 miles away. 1 At least one additional

explosion occurred later the same day. 2 The county judge declared a

state of disaster, required mandatory evacuations, and imposed a

curfew. The Golden Triangle3 sustained widespread property damage,

and its people personal injuries.

Plaintiffs sued the plant owner, the TPC Group, 4 alleging that the

plant pipe ruptured because of “popcorn polymerization”—a buildup of

popcorn-shaped polymers that occurs in the production of butadiene and

clogs equipment and pipes. Plaintiffs assert that the buildup could and

1 Erin Douglas, Federal Report Identifies Cause of 2019 Port Neches

Chemical Plant Explosion, TEX. TRIB. (Dec. 20, 2022, 5:00 PM),

https://www.texastribune.org/2022/12/20/texas-chemical-plant-explosion-tpc-

port-neches/.

2 Id.

3 The Golden Triangle is an area of Southeast Texas between the cities

of Beaumont, Port Arthur, and Orange. Port Neches is located inside the

Triangle, southeast of Beaumont and just a few miles north of Port Arthur.

4 Plaintiffs sued TPC Group Inc. and TPC Group LLC. Plaintiffs allege

that the LLC is the TPC entity that operates the Port Neches plant, but the

difference between the two entities is not relevant to Relators’ mandamus

petition.

2

should have been eliminated by a turnaround 5 that TPC delayed

because of its expense.

TPC is owned (indirectly) by Sawgrass Holdings LP, 6 which in

turn is owned by two private-investor groups, which Plaintiffs refer to

as “First Reserve” and “SK Capital”. The general partner of Sawgrass

Holdings LP is Sawgrass Holdings GP LLC, which has a five-member

Board of Managers. First Reserve and SK Capital each appoint two

members to the GP Board, and the fifth is TPC’s CEO. Plaintiffs allege

that the GP Board manages TPC directly.

Over a year into the litigation, Plaintiffs, by their first amended

petition, added the two investor groups and Sawgrass Holdings LP as

defendants. They later added Sawgrass Holdings GP. In their third

amended petition filed in October 2021, Plaintiffs assert that the

investors, through their control of four of the five seats on the GP Board,

together with Sawgrass Holdings LP and Sawgrass Holdings GP, are

responsible for TPC’s failure to perform the needed turnaround and

other maintenance that would have prevented the explosions.

Throughout the petition, Plaintiffs refer to the investors and Sawgrass

Holdings LP collectively as TPC’s “Owners”—never distinguishing

among them. Continuing that theme, the petition does not distinguish

between the conduct of “Owners” and Sawgrass Holdings GP; each

5 A turnaround is a scheduled event where an entire process unit of an

industrial plant is taken offline for an extended period for revamp and renewal.

Turnarounds are expensive—both in terms of direct costs and because they

result in lost production.

6Sawgrass Holdings LP owns TPC Holdings Inc., which owns TPC

Group Inc., which owns TPC Group LLC.

3

factual allegation is made against “Owners and Sawgrass Holdings GP”.

Plaintiffs contend that these defendants were motivated by their

desire to minimize TPC’s expenses to improve its balance sheet for a

future sale. Plaintiffs pleaded that “Owners and Sawgrass Holdings GP”

are TPC’s alter ego and liable for its torts by piercing the corporate veil

and also that they are liable for their own torts, including negligently

undertaking to control TPC’s day-to-day operations and to ensure plant

safety themselves.

Two days after the third amended petition was filed, the First

Reserve investor group and Sawgrass Holdings LP moved under

Rule 91a to dismiss Plaintiffs’ claims against them for having “no basis

in law or fact.” 7 They argued that piercing the corporate veil is “an

extraordinary measure reserved for instances where the facts

demonstrate that the owner (1) disregarded corporate formality, and

(2) used the corporate form to commit fraud or for illegal purposes” and

that “Plaintiffs allege no facts that come close to establishing these

exceptional circumstances.” Further, they argued that Plaintiffs’ non-

specific allegations of the movants’ control over plant operations were

conclusory and insufficient to assert a claim of negligent undertaking or

other direct tort. After the MDL court denied the motion to dismiss, the

court of appeals denied mandamus review, explaining in a short opinion

that Plaintiffs’ allegations gave fair notice of its claims. 8

7TEX. R. CIV. P. 91a.1 (“[A] party may move to dismiss a cause of action

on the grounds that it has no basis in law or fact.”).

8 665 S.W.3d 44, 45-46 (Tex. App.—Beaumont 2022); see TEX. R. CIV.

P. 45(b) (requiring that pleadings contain “a statement in plain and concise

4

The First Reserve investor group and Sawgrass Holdings LP

sought mandamus review in this Court. 9 We ordered full briefing and

heard oral argument on February 22, 2023. Because Plaintiffs make the

same allegations against Sawgrass Holdings LP as they do against the

First Reserve investor group, we will use First Reserve as a short form

for all Relators in the rest of this opinion.

B

On June 1, 2022, while First Reserve’s mandamus petition was

pending before this Court, TPC moved for protection in the U.S.

Bankruptcy Court for the District of Delaware. That court confirmed a

reorganization plan embodying a global settlement under which

millions of dollars went to pay the claims of unsecured creditors,

including Plaintiffs. As part of the plan, TPC released all claims its

estate might have had against First Reserve. In an opinion that issued,

coincidentally, during argument in this Court, the bankruptcy court

considered “whether the claims the tort plaintiffs intend to pursue

against [First Reserve] are claims that belonged to [TPC’s] estate[] (and

therefore are released and enjoined), or are claims that belong to the

plaintiffs themselves, such that they may be pursued in the MDL

language of the plaintiff’s cause of action or the defendant’s grounds of defense”

and stating that conclusory allegations are “not . . . grounds for an objection

when fair notice to the opponent is given by the allegations as a whole”).

9The motion to dismiss, filed by the First Reserve investor group and

Sawgrass Holdings LP, recites that the SK Capital entities joined the motion

separately. The SK Capital entities have not joined as relators in the court of

appeals or in this Court. Sawgrass Holdings GP did not join the Rule 91a

motion. Thus, the relators in this Court are the entities that comprise the First

Reserve investor group and Sawgrass Holdings LP.

5

litigation.” 10 The court held that Plaintiffs’ veil-piercing and alter ego

claims belonged to the estate and were released under the plan and that

Plaintiffs were enjoined from prosecuting them. 11

But the court recognized that Plaintiffs had also alleged a “direct,”

“negligent undertaking” claim that is “not affected” by the plan or the

injunction: specifically, that First Reserve “had sufficient substantive

involvement in the operation of [TPC’s] business that [First Reserve]

undertook responsibility for managing the safety function and [was]

negligent in the manner in which [it] carried it out”. 12 The court

reviewed Plaintiffs’ efforts to separate their veil-piercing claims by

revising their fifth amended petition, then their operative pleading, with

a proposed sixth amended petition. But the court rejected the effort,

observing that “it appears that the plaintiffs have endeavored, in the

[petition], to say as much as they could about efforts to ‘hide behind the

corporate veil’ while retaining the ability to maintain that the action is

not really a claim for veil piercing that would be barred by [the] Court’s

injunction.” 13

The court directed Plaintiffs to submit a revised pleading

complying with the plan injunction. Plaintiffs submitted a proposed

seventh amended petition, which the bankruptcy court approved by

letter dated April 18, 2023. The court explained that “it was not

10In re TPC Grp. Inc., No. 22-10493 (CTG), 2023 WL 2168045, at *1

(Bankr. D. Del. Feb. 22, 2023).

11 Id. at *2.

12 Id.

13 Id.

6

persuaded by [First Reserve’s] argument that a claim for negligent

undertaking was really a veil-piercing claim in disguise because both

causes of actions relied on allegations that [First Reserve] effectively

directed the debtors’ operations.” Rather:

The gravamen of the claim for negligent undertaking is

that [First Reserve] played such an active role in directing

the day-to-day affairs of [TPC] that [First Reserve itself

was] effectively making the decisions regarding the

company’s safety function. Those same factual

allegations . . . are also the basis of [Plaintiffs’] veil-

piercing claim . . . . The factual overlap, however, does not

convert the claim for negligent undertaking into a claim for

veil piercing.

“The task of deciding whether plaintiffs’ claims fall on one side of the

line or another”, the court added, “is a surgical one”.

II

A

Both Plaintiffs, on the one hand, and First Reserve, on the other,

have appealed the bankruptcy court’s order. Plaintiffs and First Reserve

urge us to decide the pending mandamus petition directed to the MDL

court’s denial of the motion to dismiss Plaintiffs’ claims in their third

amended petition. We decline to consider First Reserve’s arguments

regarding Plaintiffs’ alter ego, veil-piercing claims as the bankruptcy

court has enjoined Plaintiffs from proceeding on them. But the court has

now removed from the scope of the plan injunction Plaintiffs’ other

“direct” claims—principally the tort of negligent undertaking. We leave

for the MDL court in the first instance the “surgical” work of excising

one from the other. Here, we address whether Plaintiffs’ allegations of

negligent undertaking and other direct claims in the third amended

7

petition are sufficient to withstand First Reserve’s motion to dismiss

under Rule 91a. 14

B

1

Rule 91a provides:

[A] party may move to dismiss a cause of action on the

grounds that it has no basis in law or fact. A cause of action

has no basis in law if the allegations, taken as true,

together with inferences reasonably drawn from them, do

not entitle the claimant to the relief sought. A cause of

action has no basis in fact if no reasonable person could

believe the facts pleaded. 15

“[T]he court may not consider evidence in ruling on the motion and must

decide the motion based solely on the pleading of the cause of action,

together with any pleading exhibits permitted by Rule 59.” 16

Plaintiffs’ principal claim is that First Reserve undertook to take

charge of TPC’s day-to-day operations through its appointees to the GP

Board and was negligent in failing to make the plant’s operations safe.

Under Texas law, a defendant who undertakes “to render services that

it knows or should know are ‘necessary for the protection of the other’s

person or things’” must generally “exercise reasonable care in

14 Against First Reserve, the third amended petition alleges negligence

(Counts IV-V, VII), gross negligence (Counts IV-V, VIII), nuisance (Count VI),

and “misrepresentations” or fraud (Count VII). Each claim is based on the

same allegations, and throughout the litigation, both sides have treated all the

direct-liability claims pleaded as a single claim for negligent undertaking. Our

analysis follows their lead and applies to all direct-liability claims pleaded in

the third amended petition.

15 TEX. R. CIV. P. 91a.1.

16 TEX. R. CIV. P. 91a.6.

8

performing the undertaking.” 17 “The critical inquiry concerning the duty

element of a negligent-undertaking theory is whether a defendant acted

in a way that requires the imposition of a duty where one otherwise

would not exist.” 18 But the duty is only implicated when the complained-

of undertaking is an affirmative course of action; liability for negligent

undertaking cannot be predicated on an omission. 19 Nor can liability for

negligent undertaking be predicated on a promise to render a service

that is not accompanied by either performance or reliance on the promise

by the injured party. 20

Plaintiffs have no claim that First Reserve undertook to run TPC

based on its indirect ownership of TPC. “Creation of affiliated

corporations to limit liability while pursuing common goals lies firmly

17Elephant Ins. Co. v. Kenyon, 644 S.W.3d 137, 151 (Tex. 2022) (quoting

Torrington Co. v. Stutzman, 46 S.W.3d 829, 838 (Tex. 2000)).

18 Id. (quoting Nall v. Plunkett, 404 S.W.3d 552, 555 (Tex. 2013)).

See id. at 152 (“[N]ot giving a safety warning is an omission, not an

19

undertaking.”); id. at 152 n.80 (collecting cases).

20 Fort Bend Cnty. Drainage Dist. v. Sbrusch, 818 S.W.2d 392, 396 (Tex.

1991). In this case, plaintiff Sbrusch was injured while crossing over a bridge

that collapsed. The bridge was one of many that crossed over a drainage

channel maintained by the District. The District had a history of repairing the

bridges over the channel when nearby landowners requested it; the District

maintained a budgetary line item for maintenance of drainage channels; and,

prior to Sbrusch’s accident, a District employee told a landowner that the

District would try to repair the specific bridge on which Sbrusch was injured.

We held that the District could not be liable to Sbrusch for negligent

undertaking. We reasoned that Sbrusch could not have relied on the

employee’s “promise” that the District would repair the bridge because the

promise was never communicated to Sbrusch. Id. at 397. We further held that

neither the District’s promise to repair the bridge nor its budgetary line item

for maintaining drainage channels amounted to an affirmative course of

action. Id.

9

within the law and is commonplace.” 21 As long as companies are distinct

legal entities, they are not liable for each other’s conduct unless some

exception applies to remove this limited liability. 22 Nor can Plaintiffs

base their claim on First Reserve’s right to appoint members to the GP

Board. Even when one company appoints a loyal employee to the board

of a separate legal entity, the appointing company does not become liable

for the board’s conduct. 23 “[I]t is entirely appropriate for directors of a

parent corporation to serve as directors of its subsidiary, and that fact

alone may not serve to expose the parent corporation to liability for its

subsidiary’s acts.” 24 Plaintiffs do not argue to the contrary:

Plaintiffs do not disagree with Relators that “[t]he acts of a

company’s board are not imputed to that company’s

private-equity investors merely because the investors

appointed directors to the board.” Nor do Plaintiffs

disagree that “Texas law does not strip a private-equity

investor of limited liability for a portfolio company’s torts

merely because the investor engages in industry-standard

investment practices.” Plaintiffs do not merely allege that

Relators appointed directors to TPC’s board and engaged

21SSP Partners v. Gladstrong Invs. (USA) Corp., 275 S.W.3d 444, 455

(Tex. 2008).

22 See id. (“We have never held corporations liable for each other’s

obligations merely because of centralized control, mutual purposes, and shared

finances. There must also be evidence of . . . fraud, evasion of existing

obligations, circumvention of statutes, monopolization, criminal conduct, [or]

the like.”).

23See Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 198-199 (Tex. 1995)

(holding that a company with the power to elect a majority of members to a

homeowners’ association was not liable for decisions made by the association

with respect to security measures).

24United States v. Bestfoods, 524 U.S. 51, 69 (1998) (quoting Am.

Protein Corp. v. AB Volvo, 844 F.2d 56, 57 (2d Cir. 1988)).

10

in industry standard investment practices. 25

The U.S. Supreme Court has summarized the law this way:

“[N]orms of corporate behavior . . . are crucial reference points” when

“distinguishing a parent[’s] . . . oversight of a subsidiary” from the

parent’s “control over the operation of the subsidiary’s facility.” 26

“Activities that involve the facility but which are consistent with the

parent’s investor status, such as monitoring of the subsidiary’s

performance, supervision of the subsidiary’s finance and capital budget

decisions, and articulation of general policies and procedures, should not

give rise to direct liability.” 27

A cause of action has no basis in law under Rule 91a if it is barred

by an established legal rule and the plaintiff has failed to plead facts

demonstrating that the rule does not apply. 28 Because liability cannot

25 Brief in Response of Real Parties-in-Interest (Plaintiffs) at 22

(quoting Relators’ Brief on the Merits at 41, 48).

26 Bestfoods, 524 U.S. at 71-72.

27 Id. at 72 (alterations omitted) (quoting Lynda J. Oswald, Bifurcation

of the Owner and Operator Analysis under CERCLA: Finding Order in the

Chaos of Pervasive Control, 72 WASH. U. L.Q. 223, 282 (1994)); see also id. (“The

critical question is whether, in degree and detail, actions directed to the facility

by an agent of the parent alone are eccentric under accepted norms of parental

oversight of a subsidiary’s facility.”).

28 See In re Farmers Tex. Cnty. Mut. Ins. Co., 621 S.W.3d 261, 269 (Tex.

2021) (holding that the plaintiff’s claim had no basis in law and should have

been dismissed under Rule 91a where she had “identifie[d] no pleaded facts

that would take her claim outside [the] legal rule” that an insurer is not

vicariously liable for the conduct of an independent attorney it retains to

defend an insured); In re Hous. Specialty Ins. Co., 569 S.W.3d 138, 141 (Tex.

2019) (holding that a request for a declaration of nonliability in tort had no

basis in law and should have been dismissed because the request violated the

rule of Abor v. Black, 695 S.W.2d 564 (Tex. 1985)); In re Essex Ins. Co., 450

11

be based on First Reserve’s ownership interest in TPC, its appointments

to the GP Board, or any other action that is consistent with its investor

status, Plaintiffs must have pleaded facts showing that First Reserve

undertook in other ways to run TPC’s day-to-day operations and,

specifically, to delay the turnaround that could have prevented the

explosions.

These allegations must satisfy our notice-pleading rules, which

“require pleadings to not only give notice ‘of the claim and the relief

sought’ but also of the essential factual allegations.” 29 “As we have

explained many times, a ‘cause of action’ means the ‘fact or facts

entitling one to institute and maintain an action, which must be alleged

and proved in order to obtain relief.’” 30 It is not enough for the plaintiff

to provide fair notice of the claims alleged because “[t]he pleading of a

legal theory, without more, does not provide notice of the facts that could

be pleaded to support that theory.” 31 The plaintiff must plead “the

essential factual allegations supporting those claims”, 32 which must be

S.W.3d 524, 527-528 (Tex. 2014) (holding that the trial court erred by denying

Essex’s Rule 91a motion because the declaratory judgment requested by the

plaintiff violated Texas’ “no direct action rule”, which prohibits an injured

party from suing a tortfeasor’s insurance company before liability has been

established).

Kinder Morgan SACROC, LP v. Scurry County, 622 S.W.3d 835, 849

29

(Tex. 2021) (quoting Montelongo v. Abrea, 622 S.W.3d 290, 299-300 (Tex.

2021)).

30 Id. at 849 n.63 (quoting Loaisiga v. Cerda, 379 S.W.3d 248, 255 (Tex.

2012)).

31 Id. at 850.

32 Id. at 849 (citing Montelongo, 622 S.W.3d at 299-300).

12

sufficient to support a judgment if ultimately proven. 33

2

As we have noted, Plaintiffs’ petition refers to TPC’s “Owners”

(including First Reserve) and Sawgrass Holdings GP collectively.

Plaintiffs allege that “Owners and Sawgrass Holdings GP undertook

direct operational control of the TPC plant in Port Neches and assumed

the duty of risk mitigation as well as other duties”. But Plaintiffs also

assert that TPC was controlled by the Board of Sawgrass Holdings GP,

which did not join the Rule 91a motion and is not a relator here.

Plaintiffs’ only factual allegation about how First Reserve itself

exercised “operational control” over TPC is that First Reserve acted

“through the Board” of Sawgrass Holdings GP. But as we have explained

and Plaintiffs now concede, First Reserve’s right to appoint two of the

five members of the GP Board does not subject it to liability for TPC’s

conduct. Because Plaintiffs make no allegation that First Reserve—a

group of entities that are distinct from Sawgrass Holdings GP—

undertook to render services to TPC, their negligent-undertaking claim

has no basis in law. 34

For example, Plaintiffs allege that First Reserve and Sawgrass

Holdings GP refused to authorize a turnaround and other safety

expenditures in order to keep TPC’s balance sheet strong for a possible

sale. Yet as we have said, an undertaking duty cannot be predicated on

33 See id. at 850-851.

34See TEX. R. CIV. P. 91a.1 (“A cause of action has no basis in law if the

allegations, taken as true, together with inferences reasonably drawn from

them, do not entitle the claimant to the relief sought.”).

13

an omission, 35 a promise that is not performed or relied on by the injured

party, 36 the failure to make an expenditure, 37 or a parent’s supervision

of its subsidiary’s financial and budgetary decisions. 38 And in any event,

First Reserve had no authority itself over TPC’s budget and expenses.

That authority was vested solely in the GP Board, not in First Reserve.

Plaintiffs allege that “Owners and Sawgrass Holdings GP . . . den[ied]

funds to adequately supply the plant with spare parts . . . or perform

necessary maintenance needed to keep the plant safe”, but they have

not pleaded a single instance in which First Reserve itself decided

whether to provide or withhold resources to TPC. To be sure, Plaintiffs

have pleaded at great length that First Reserve controlled TPC, but the

only factual bases pleaded are that First Reserve had an ownership

interest in TPC and designated two GP Board members, both of which

Plaintiffs acknowledge are insufficient to subject First Reserve to

liability for TPC’s actions.

In their merits brief, Plaintiffs summarize their allegations this

way:

Plaintiffs specifically plead Relators acted with direct

operational control over safety with respect to the

safeguards, protocols, procedures, personnel, equipment,

inspections, and resources and control such that Relators

took control away from TPC and supplanted TPC’s duties

to its employees and the public with respect to the specific

safety decisions that led to the explosion and the harms

35 Kenyon, 644 S.W.3d at 152 & n.80.

36 Sbrusch, 818 S.W.2d at 396.

37 See id. at 397.

38 Bestfoods, 524 U.S. at 72.

14

that followed. 39

But Plaintiffs pleaded that First Reserve “and Sawgrass Holdings GP”

did these things. Plaintiffs do not state factually how First Reserve itself

took and exercised such control other than through its ownership

interest and the GP Board, which, again, Plaintiffs concede is not

enough for a negligent undertaking. Plaintiffs add: “When an ‘owner’

actively inserts itself into the day-to-day operational decisions of a

company—and makes specific—and erroneous—operational decisions

that blow up a plant—Court-manufactured immunity will not lie.” 40

Perhaps not, but Plaintiffs must have alleged facts to show that is what

First Reserve did.

Plaintiffs’ third amended petition makes many legal accusations

but no factual allegations to show a cause of action with a basis in law

against First Reserve for TPC’s conduct. The MDL court should have

granted First Reserve’s motion to dismiss.

* * * * *

The posture of this case presents us with very exceptional

circumstances. Plaintiffs’ third amended petition asserts claims that the

bankruptcy court enjoined Plaintiffs from prosecuting at the very time

the case was being argued in this Court. But that court has since allowed

Plaintiffs to proceed on other claims that were asserted in the third

amended petition and now included in a proposed seventh amended

petition, though they are entangled with the prohibited claims. Those

39 Brief in Response of Real Parties-in-Interest (Plaintiffs) at 39

(emphasis omitted).

40 Id. at 40.

15

developments do not moot whether the allegations in the third amended

petition state a cause of action with a basis in law or fact. Plaintiffs

cannot, simply by amending their pleadings, avoid a determination of

the issues in this proceeding, nor have they sought to do so. Plaintiffs

and First Reserve not only argue that our ruling on those issues is

appropriate, they urge us to rule.

And we have. But we will not direct the MDL court to take action.

Mandamus is discretionary and “controlled by equitable principles”, 41

and we cannot determine what disruption a directive would have on

proceedings that have been stayed during the bankruptcy proceedings

and may resume on a different petition. 42 With that explanation, we

deny First Reserve’s petition for writ of mandamus.

______________________________

Nathan L. Hecht

Chief Justice

OPINION DELIVERED: June 23, 2023

41 Rivercenter Assocs. v. Rivera, 858 S.W.2d 366, 367 (Tex. 1993).

42Plaintiffs argue that their negligent-undertaking claim should not be

dismissed before they have had the opportunity to conduct full discovery from

First Reserve. First Reserve counters that a plaintiff must make a “reasonable

inquiry” into the facts before filing suit, TEX. R. CIV. P. 13, and that Plaintiffs

have already obtained significant discovery from TPC in any event. We note

that the time standards in Rule 91a leave little room for discovery before a

motion under the rule must be filed and ruled on. But as we are declining to

grant relief, we leave it to the trial court to adjudicate the parties’ discovery

dispute when proceedings resume in that court.

16

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.

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