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In re Williams Companies, Inc.

Court of Appeals of Texas, Fourteenth District

November 9, 2017

IN RE THE WILLIAMS COMPANIES, INC., JOHN DEARBORN, ANDDAVID CHAPPELL, Relators

         ORIGINAL PROCEEDING WRIT OF MANDAMUS 125th District Court Harris County, Texas Trial Court Cause No. 2016-53287

          Panel consists of Justices Brown, Wise, and Jewell.

          MEMORANDUM OPINION

          Marc W. Brown Justice

         On August 24, 2017, relators The Williams Companies, Inc. ("Williams"), John Dearborn, and David Chappell (collectively, the "Williams Parties") filed a petition for writ of mandamus in this court. See Tex. Gov't Code Ann. § 22.221 (West Supp. 2017); see also Tex. R. App. P. 52. In the petition, relators ask this court to compel the Honorable Kyle Carter, presiding judge of the 125th District Court of Harris County, to vacate his August 4, 2017 order granting the second motion to compel filed by real party in interest, North American Polypropylene ULC ("NAPP"). We conditionally grant the petition for writ of mandamus.

         I. Background

         NAPP, a Canadian company, entered into a propylene purchase and sale agreement (the "PSA") with Williams Canada Propylene ULC ("Williams Canada"). Under the PSA, Williams Canada agreed to build a petrochemical facility in Alberta, Canada for the manufacturing of propylene by dehydrogenating propane, and NAPP agreed to build a facility next to the PDH facility to convert the PDH facility's supply of liquid propane into polypropylene pellets. The project was collectively known as the "PDH/PP Project."

         On August 11, 2016, NAPP sued Williams Canada in Alberta, Canada for breach of the PSA, and later added the Williams Companies, Williams Energy Canada ULC ("WECU"), and Inter Pipeline, Ltd. ("IPL") as defendants to the Canada suit. NAPP also sued Williams, Dearborn, Chappell, and WECU on August 11, 2016, in the 125th District Court of Harris County, for fraudulent concealment, fraudulent inducement, common-law fraud, and negligent misrepresentation. NAPP later added IPL to the Texas suit.

         NAPP served Williams and Dearborn with requests for production in November 2016, and Chappell in December 2016, for what the Williams Parties describe as "the entire universe of documents relating" to the PDH/PP Project, which was comprised of 606, 625 documents.

          On December 5, 2016, WECU filed a special appearance. Also, on December 5, 2016, the Williams Parties and WECU[1] filed a motion to dismiss, asserting that the trial court should dismiss NAPP's suit because (1) the contracts contain forum-selection clauses under which NAPP consented to Alberta, Canada as the exclusive forum for its claims; (2) Texas law requires that NAPP's claims, which arise out of a "major transaction, " be brought in Alberta, Canada;[2] and (3) the doctrine of forum non conveniens requires NAPP to bring its claims in Alberta, Canada. IPL filed its special appearance on January 3, 2017.

         The Williams Parties objected to NAPP's discovery requests on the grounds that the requests were overly broad, burdensome, and irrelevant to the unresolved forum and jurisdictional issues. NAPP filed a motion to compel production.

         At a February 17, 2017 hearing on NAPP's motion to compel, the trial court stated that NAPP was entitled to jurisdictional discovery related to the pending special appearances and motion to dismiss, and the trial court instructed the parties to conduct discovery regarding the jurisdictional and forum issues. The trial court, however, signed an order, on February 17, 2017, directing the Williams Parties to produce within thirty days all documents requested by NAPP, which collectively pertained to a variety of issues in the case including but not limited to jurisdictional and forum issues. On March 9, 2017, the Williams Parties filed a motion to modify the February 17 order or, in the alternative, a motion to stay enforcement of the order, pending mandamus review.

          On March 30, 2017, NAPP and the Williams Parties entered into a Rule 11 Agreement, which defined the scope of the discovery to be undertaken in advance of the hearing on the special appearances and motion to dismiss. The Rule 11 Agreement provides, in relevant part:

1. Limited Scope of February 17 Order. The Parties agree that the form of [the] order granting NAPP's Motion to Compel signed by the Court on February 17, 2017 (the "Order") does not contain certain limiting language that the Court orally confirmed with counsel at the hearing regarding the scope of discovery that the Parties were to undertake. A copy of the Order is attached as Exhibit A. The Parties therefore agree that, notwithstanding the text of the current Order, the obligations of the Parties under that Order are as follows:
• The Parties shall undertake focused discovery on the issues raised in the forum non conveniens portion of Defendants' Motion to Dismiss and the Special Appearances filed by WECU and IPL; and
• The Parties shall confer and establish an agreed-upon framework of search terms, document custodians and date ranges sufficient to allow that focused discovery.[3]
The Parties have already conferred and they agree to continue to confer regarding an agreement about a reasonable discovery framework to be completed before a hearing on the pending Motion to Dismiss and Special Appearances. If, however, any Party should later determine that the ongoing negotiations have reached an impasse and that an agreement cannot be reached about a reasonable discovery framework, it shall be free to seek further relief from the Court regarding the appropriate search terms, document custodians and date ranges for future discovery. NAPP agrees that it shall not take any action to enforce the Order as currently written, and it shall not later contend that TWC, Dearborn and Chappell have any obligation to comply with the Order as ...

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