A Texas appellate court has overturned a $2.5 million verdict against ExxonMobil Pipeline Co., ruling that the successive owners of the Sand Flat Pipeline were not responsible for the cleanup costs of an oil spill.
In a brief opinion issued Friday, the Texas Twelfth District Court of Appeals found that the purchase and sale agreements governing ownership of the 11-mile pipeline prohibited the assignment of interests without written consent, effectively voiding transfers to later owners.
Contract Terms Shield Successive Owners
The legal battle stemmed from a 2017 crude oil leak discovered on a 126.7-acre easement that had been granted in 1944. While ExxonMobil once owned the Sand Flat Pipeline, the company sold it to Salter Creek Resources LLC in 2000. The pipeline was later transferred through multiple entities, including Coffeyville Resources Crude Transportation LLC, Rose Rock Midstream Crude LLC, and its current owner, SemGreen LLP.
ExxonMobil sued these entities—collectively referred to as the SemGreen parties—arguing that under the 2000 purchase and sale agreement, they were obligated to assume responsibility for environmental remediation.
