Texas Business Court Decision – March 11, 2025

No. 24-BC11A-0028   ET Gathering & Processing LLC v. Tellurian Production LLC

[J. Barnard]

Plea to Jurisdiction. In this suit plaintiff alleged defendant breached the terms of a gas gathering agreement in which plaintiff agreed to gather and process defendant’s natural gas for an agreed rate, and defendant agreed to deliver to plaintiff all of the natural gas it owned or controlled on property in Louisiana. In its amended complaint, plaintiff alleged defendant had failed to deliver the natural gas and that plaintiff was entitled to recover the foregone fees associated with gathering and processing the gas; plaintiff alleged the foregone fees exceed $10 million based on the amount of gas produced by two of the wells on the property; plaintiff also sought infrastructure costs and the foregone costs from six other wells on the property; in addition to its answer in the case, defendant filed a plea to jurisdiction to hear the case, arguing that the amount in controversy was a sham, pleaded only to wrongfully obtain Business Court jurisdiction.

Held: the plea to jurisdiction is denied.

First, the court applies long-standing principles in reviewing pleas to jurisdiction – See C Ten 3 LLC ex rel. v. Tarbox, 2025 Tex. Bus. 1, at paragraph 46, 2025 WL 224542, at 13-14 (Jan. 3, 2025); the fact that plaintiff filed this case in district court, engaged in discovery, nonsuited, and then refiled in the Business Court is not in and of itself evidence of fraud or sham; engaging in discovery to fully ascertain facts and claims and then nonsuiting and refiling in this court is litigation strategy and not fraudulent behavior or sham pleading;

Second, in the absence of proof of fraud or sham pleadings, the allegations in the pleadings control to determine whether this court has jurisdiction, and the court construes the pleadings liberally in favor of plaintiff;

Third, plaintiff’s pleadings were sufficient to invoke the court’s jurisdiction.