Texas Business Court Decisions – June 30, 2025
No. 25-BC08A-0004 Black Mountain SWD, LP v. NGL Water Solutions Permian, LLC (Judge Bullard) 25-bc08a-0004-black-mountain-swd-v-ngl-water-solutions-permian-opinion-and-order-on-motion-to-remand.pdf
Jurisdiction. The parties signed a royalty agreement in January, 2019 giving plaintiff Black Mountain a $0.03-per-barrel royalty for product transported through its pipeline; but the royalty is only payable on those volumes of product for which NGL received a transportation fee from an unaffiliated third party; and the royalty does not apply to saltwater transported as a result of capacity balancing across current and future saltwater disposal assets. NGL stopped paying royalties and Black Mountain claimed NGL was mislabeling the transport of saltwater as excluded categories of product to avoid paying royalties. Black Mountain sued NGL in the Tarrant County district court in February, 2025, seeking more than $1 million in damages for breach of contract; NGL removed the case, without agreement, to the Business Court, alleging the amount in controversy exceeds $10 million because the life-time value of the royalties owed to Black Mountain under the interminable royalty agreement carried in the pipeline and for with a fee is levied exceeds the jurisdictional amount set in Section 25.004(D)(1); Black Mountain filed a motion to remand, asserting the jurisdictional amount is not met because it seeks the payment of damages for past – not future – breaches of the agreement, and that the amount in controversy must be calculated from the inception of the agreement to the date the suit was filed – here, about $4.42 million.
Held: (1) the burden of proving the existence of jurisdiction is on NGL, the party who removed the case: (2) to determine the amount in controversy, the court reviews the pleadings and jurisdictional evidence; (3) Black Mountain correctly notes that the amount in controversy is the past damages for unpaid royalties, and the allegations of its operative complaint do not seek future damages or to protect nonmonetary privileges or rights such as declaratory or injunctive relief; (4) Black Mountain’s jurisdictional evidence (a declaration provided by its chief financial officer and custodian of records) shows the amount in controversy is no more than $4.5 million, and NGL has not submitted controverting evidence raising a fact question on the amount in controversy; (5) the amount in controversy does not include the value of the purported right at stake to receive disputed life-time royalties on discarded saltwater; and (6) there is no fact issue on jurisdiction solely because Black Mountain has refused to stipulate to an amount below the jurisdiction limit. The jurisdictional amount required by the statute is not met. the motion to remand is granted, and the case is remanded to Tarrant County for further proceedings.
No. 24-BC11A-0021 Shabbar Kassam, etc., et al. v. Amish Dosani, et al. (Judge Bullard) 24-bc11a-0021-kassam-v-dosani-memorandum-opinion-and-order-denying-defendants-motion-to-sever-and-plea-to-jurisdiction.pdf
Jurisdiction/Severance. Plaintiffs alleged that defendants, Dosani and two others, had wrongfully taken control of the nominal defendants and mismanaged their finances to plaintiffs’ detriment; plaintiffs stated six claims and they all joined in five – breach of fiduciary duty, money had and received, attorney’s fees, access to books and records, and receivership and injunction; plaintiff Kassam raised an additional claim for breach of contract. Defendants moved to sever the counts into three separate suits under Rule 41 because, in their view, the plaintiffs seek relief for completely different acts concerning different companies; they also seek dismissal because plaintiffs fail to satisfy the amount in controversy requirement.
Held: (1) Plaintiffs are alleging defendants, acting in concert at approximately the same time, usurped operational control of the nominal defendants and, in doing so, breached duties owed to, and the detriment, of plaintiffs and the nominal defendants; plaintiffs’ claims are logically related and hinge on common material questions of law and fact and should remain joined and unsevered in a single lawsuit; (2) additionally, factors such as judicial economy and convenience support a joined and unsevered suit; (3) with respect to the jurisdictional issue, where, as here, a party challenges a pleading that alleges that the amount-in-controversy requirement is met, the pleading controls unless the challenging party can present evidence readily establishing an amount outside the threshold or showing the amount pleaded is a sham; and (4) the jurisdictional evidence defendants presented does not establish that plaintiffs’ pleading is a sham; plaintiffs’ pleading, construed liberally, shows the amount in controversy exceeds the $5 million threshold. Defendants’ motion to sever and dismiss is denied.