Overview
The Matter
Represented an energy sector client in commercial litigation arising from a long-term natural gas supply contract dispute. The matter combined complex contract interpretation issues with damages calculations spanning multiple supply periods. The trial in the Southern District of Texas produced a verdict for the client, and the Fifth Circuit affirmed on appeal. The decision preserves a substantial damages award and provides Fifth Circuit guidance on Texas contract interpretation principles applicable to long-term supply agreements.
The Contract Dispute
The dispute arose from a long-term natural gas supply agreement. The counterparty's obligation to deliver volumes at contractually-set prices became contested during a period of significant market volatility. The disputed provisions included pricing methodology, force majeure scope, and the allocation of delivery and performance risk under the operating terms. The client documented its damages across multiple supply periods and developed an interpretation of the agreement grounded in the contemporaneous negotiation record and industry practice.
Trial in the Southern District
The trial focused on the contract's plain language, the parties' contemporaneous communications, and expert testimony on natural gas market structure and industry conventions. Direct examination presented the client's negotiation team, supply scheduling personnel, and damages experts. Cross-examination of the counterparty's witnesses traced the operational record against the contractual obligations. The jury returned a verdict for the client and awarded substantial damages on the supply and performance claims.
Fifth Circuit Affirmance
On appeal, the counterparty challenged the trial court's contract interpretation rulings, the admissibility of industry-practice testimony, and the sufficiency of the damages record. The Fifth Circuit affirmed on each ground. The opinion is now cited in subsequent Fifth Circuit and Texas state court litigation involving long-term supply contracts. The decision stands for the proposition that contemporaneous negotiation evidence and industry-practice testimony are appropriate aids to contract interpretation under Texas law.
Engagement Details
The Particulars of Record
Every matter carries a record of how it moved and what came of it, kept with the same care as the account above. What follows belongs to this engagement alone, not a preview of what another matter might return.
- Outcome
- trial-verdict
- Resolution
- Won a trial verdict in the Southern District of Texas on a long-term natural gas supply contract dispute and secured Fifth Circuit affirmance on appeal. The decision preserved a substantial damages award for the energy sector client and clarified Texas contract interpretation principles applicable to long-term supply agreements.
- Geography
- TX, US
- Resolved
- October 4, 2024
- Duration
- 50 months
- Attorneys
- Robert ZaneMickey Haller
Past results do not guarantee, warrant, or predict a similar outcome in any future matter. Every engagement is unique and must be evaluated on its own facts and circumstances.
One team, trial through appeal.
Discuss Your Commercial Dispute
Complex commercial disputes carry their own facts, their own record, and their own risks. Our commercial litigation team carries a matter from first review through trial and, where necessary, into the appellate courts. Get in touch to discuss where things stand.