Following a four-day bench trial last week, the Texas Business Court on Tuesday ruled in favor of Marathon Oil, which had asked the court for a judgment declaring it did not owe Mercuria Energy America $17.4 million for failure to deliver natural gas during 2021’s Winter Storm Uri.
In a three-page final judgment, Third Division Judge Melissa Andrews also ordered that Marathon take nothing on its claim for attorney fees.
“The Court holds that, despite the able representation provided by counsel in this case, it would not be equitable and just to award attorney’s fees under the procedural and factual circumstances of the case, regardless of whether such fees are legally available,” she wrote. “The Court therefore orders that Marathon take nothing on its claim for attorney’s fees under the Declaratory Judgment Act.”
Judge Andrews wrote that Marathon made reasonable efforts to “avoid the adverse impacts of the force majeure and to resolve events or occurrences in order to resume performance” and therefore was excused from its failure to perform under the parties’ contract.
Marathon, which is now owned by ConocoPhillips, filed the lawsuit March 4 against Mercuria, arguing that it didn’t owe Mercuria anything.
Marathon was to sell Murcuria a certain amount of natural gas each day; however, Winter Storm Uri interrupted its operations, and Marathon was not able to deliver.
The February 2021 winter storm resulted in natural gas suppliers experiencing multiple catastrophic issues, including frozen pipes, failure of and damage to wells and other equipment, including frozen and damaged meters, and power outages and insufficient pressure at gathering, processing and transportation facilities.
Marathon wrote in its petition that access roads to wells became impassable due to snow and ice. Marathon’s wells, meters and equipment, as well as the gathering and processing facilities that processed Marathon’s natural gas, were impacted by this extreme weather event. Many of the gathering and processing facilities Marathon relied on to process gas prior to delivery declared force majeure.
A month after the winter storm, Mercuria sent an invoice to Marathon for over $17 million in alleged “cover damages” from the declaration of force majeure.
AZA partners Tim Shelby, Monica Uddin and Sammy Ford, of counsel Paul Galante, and associates Emily Adler and Ab Henry represented Marathon. Haynes Boone partner Mark Trachtenberg provided appellate support. Shelby was unable to comment at this time.
McDowell Hetherington partners William Thomas, Will King and David McDowell represented Mercuria. They did not immediately respond to a request for comment.
The case is Marathon Oil Co. v. Mercuria Energy America LLC, 25-BC11A-0013.