## Facts

- Dixie Pipeline Company (Dixie) operated a roughly 35,000-mile pipeline system, including a 1,300-mile span running through Mississippi and other states.
- Enterprise Products Partners, L.P. (Enterprise) was Dixie’s managing partner; both Dixie and Enterprise were Delaware entities with principal places of business in Houston, Texas.
- The pipeline system was controlled and monitored from Houston; Mississippi had only about five employees connected to the system.
- In 2007, a pipeline segment in Mississippi ruptured and caused a major fire that killed two people, Mattie Mitchell and Nacquandrea Mitchell, and also caused other injuries and property damage.
- The decedents and their beneficiaries were Mississippi residents.
- The decedents’ beneficiaries and other claimants sued Dixie and Enterprise in Texas state court (Harris County), asserting Texas tort claims and seeking compensatory damages.
- Defendants moved to apply Mississippi law to the measure of recoverable compensatory damages, relying on Mississippi’s 2004 Tort Reform Act, which caps noneconomic damages and was enacted in part to encourage business activity in Mississippi.
- The trial court denied the motion and ruled that Texas law would govern recoverable compensatory damages; defendants filed an interlocutory appeal.

## Issues

1. Under Texas choice-of-law rules, should Mississippi law (including Mississippi’s cap on noneconomic damages) govern recoverable compensatory damages for deaths and injuries from a Mississippi pipeline rupture when the defendants are headquartered and operationally managed from Texas and the suit is filed in Texas?

## Decision

- The court of appeals affirmed the trial court’s interlocutory order applying Texas law to the issue of recoverable compensatory damages.
- Applying Texas’s Restatement (Second) “most significant relationship” analysis on an issue-by-issue basis, the court concluded Texas had the stronger relationship to the damages-measure question.
- The court recognized Mississippi’s contacts (place of injury; plaintiffs’ residency) but treated those contacts as less weighty for the specific purpose of a noneconomic-damages cap aimed largely at limiting liability to make Mississippi attractive for business activity.
- The defendants’ Texas-centered operational control and decision-making, and Texas’s interest in setting the liability exposure of entities operating from Texas, supported applying Texas damages law.
- Because the defendants were not Mississippi residents and the record did not show they structured their principal operations in Mississippi in reliance on the cap, Mississippi’s policy interest in applying its cap was reduced in this case.

## Legal Principles

- Texas applies the Restatement (Second) of Conflict of Laws “most significant relationship” test in tort cases and may select different states’ law for different issues.
- For damages questions, courts consider the Restatement contacts (including where the injury occurred, where relevant conduct occurred, and where the parties are based) together with each state’s policy interests as applied to the parties and the issue.
- A statutory noneconomic-damages cap designed to limit liability and encourage in-state business activity may carry less force when the defendants are out-of-state entities whose central operations and alleged decisions are based elsewhere.
- A forum state has a strong interest in the deterrent and compensatory effects of its tort damages rules on entities headquartered and managed within the forum, even when the physical injury occurred in another state.

## Conclusion

The First Court of Appeals held that Texas, not Mississippi, had the most significant relationship to the measure of compensatory damages for the Mississippi pipeline rupture because the defendants were headquartered in Houston and the pipeline system was controlled and monitored from Texas, while Mississippi’s noneconomic-damages cap—tied to limiting liability to encourage business activity in Mississippi—did not fit as strongly where the defendants were nonresidents and their core operations were Texas-based.


Enterprise Prods. Partners, L.P. v. Mitchell, 340 S.W.3d 476 (2011)