BEAUMONT - Investors in a company caught up in mass tort litigation over an explosion at a petrochemical processing plant in Port Neches have won a victory that would keep them out of Texas courts.
The Ninth District Court of Appeals on June 27 found no personal jurisdiction over those investors that have indirect ownership stakes in TPC Group, which saw its facility explode in November 2019.
A multidistrict litigation formed in Orange County to process personal injury, property damage and environmental claims that resulted from the explosion. Part of the plaintiffs' argument was that investors like First Reserve Management and Sawgrass and SK Capital Partners exercised some control over TPC and should also be liable for damages.
The MDL agreed and refused special appearances in the case by the investors, but the Ninth District reversed.
"The record shows the investors are not organized under the laws of Texas and do not have principal places of business in Texas," Chief Justice Scott Golemon wrote, rejecting the idea that because First Reserve has a Houston office, the court has jurisdiction over it.
"Since the investors are not organized under Texas law and do not have a principal place of business in Texas,' the paradigm... bases for general jurisdiction' are missing here."
The decision cites a U.S. Supreme Court case that found BNSF Railway could not be sued in Montana because injuries by plaintiffs didn't occur there and the company is incorporated in Delaware with a principal place of business in Texas.
The Ninth District also rejected arguments Orange County had specific jurisdiction over the investors. Previous cases required them to be seeking some benefit, advantage or profit by availing themselves of Texas jurisdiction.
The Ninth District also ruled the formation of the so-called GP board of directors, which serves as TPC's board, does not establish jurisdiction, even though four officers from the investors serve on it, along with TPC's chief executive officer.
Six-thousand gallons of liquid butadiene exploded out of a pipe in less than a minute on the day before Thanksgiving in 2019. Workers were injured and thousands more were evacuated.
TPC pleaded guilty to a violation of the Clean Air Act, paid a $30 million penalty to the federal government and agreed to spend another $80 million on safety measures. In total, 11 million pounds of hazardous material were released.