Equinor Energy LP v. Lindale Pipeline, LLC

Summary

The Supreme Court of Texas held that Equinor Energy LP did not breach its contract with Lindale Pipeline, LLC by purchasing water from other suppliers for use in fracking wells outside the scope of the contract’s exclusivity clause. The court concluded that the contract was unambiguous and that the phrase “on the Pipeline” referred to water provided through the defined Pipeline, not water supplied for the oil wells generally. The court reversed the court of appeals and rendered judgment for Equinor.

Holdings

1. The contract’s plain and unambiguous text limited Lindale’s exclusivity to water provision and pumping “on the Pipeline,” and the oil wells were outside the contractually defined Pipeline. Equinor therefore did not breach the contract by purchasing water for those wells from third parties.
2. The district court erred by submitting the meaning of the unambiguous exclusivity clause to the jury.
3. The court did not need to consider whether the $26 million damages award was excessive because the determination that Equinor did not breach the contract was dispositive.

Questions Presented

1. Whether the contract’s exclusivity clause unambiguously applied to water purchased for oil wells outside the contractually defined Pipeline.
2. Whether the district court erred by submitting interpretation of the unambiguous contract to the jury.
3. Whether the court needed to address the excessiveness of the damages award.

Disposition

reversed