{"attribution":{"source":"legal.exploreworldai.com","canonical":"https://legal.exploreworldai.com/api/public/v1/judgment-text?id=us:ca5-23-20567-2025-12-09","cite_as":"NovaCopilot, legal.exploreworldai.com (https://legal.exploreworldai.com/api/public/v1/judgment-text?id=us:ca5-23-20567-2025-12-09)","license":"https://legal.exploreworldai.com/revision","version":"legal-2026-10-10","fingerprint":"ewai:us:e7268f","proof":"sha256:b5c336455ff558efc9d2d8b56ac76c4bd9bf2a778bee27785ffa8bb7e78256d8","jurisdiction":"us","lang":"en","publisher":"NovaCopilot by ExploreWorld Legal","terms":"https://legal.exploreworldai.com/om"},"brand_source":"Source: NovaCopilot","item":{"schema_version":"1.0.0","id":"us:ca5-23-20567-2025-12-09","jurisdiction":"us","lang":"en","brand_source":"Source: NovaCopilot","brand":{"product":"NovaCopilot","platform":"ExploreWorldAI","infrastructure":"ExploreWorld Legal","infrastructure_url":"legal.exploreworldai.com","legal_entity":"Valkiv Ventures AB","permanent_url":"https://legal.exploreworldai.com/novacopilot","source":"Source: NovaCopilot","powered_by":"Powered by NovaCopilot","license":"https://legal.exploreworldai.com/licensvillkor"},"sections":[{"title":"Front matter","paragraphs":["para_1","para_2","para_3","para_4","para_5","para_6","para_7","para_8","para_9","para_10","para_11","para_12","para_13","para_14","para_15","para_16","para_17","para_18","para_19","para_20","para_21","para_22","para_23","para_24","para_25","para_26","para_27","para_28","para_29","para_30","para_31","para_32","para_33","para_34","para_35","para_36","para_37","para_38","para_39","para_40","para_41","para_42","para_43","para_44","para_45","para_46","para_47","para_48","para_49","para_50","para_51","para_52","para_53","para_54","para_55","para_56","para_57","para_58","para_59","para_60","para_61","para_62","para_63","para_64","para_65","para_66","para_67","para_68","para_69","para_70","para_71","para_72","para_73","para_74","para_75","para_76","para_77","para_78","para_79","para_80","para_81","para_82","para_83","para_84","para_85","para_86","para_87","para_88","para_89","para_90","para_91","para_92","para_93","para_94","para_95","para_96","para_97","para_98","para_99","para_100","para_101","para_102","para_103","para_104","para_105","para_106","para_107","para_108","para_109","para_110","para_111","para_112","para_113","para_114","para_115","para_116","para_117","para_118","para_119","para_120","para_121","para_122","para_123","para_124","para_125","para_126","para_127","para_128","para_129","para_130","para_131","para_132","para_133","para_134","para_135","para_136","para_137","para_138","para_139","para_140","para_141","para_142","para_143","para_144","para_145","para_146","para_147","para_148","para_149","para_150","para_151","para_152","para_153","para_154","para_155","para_156","para_157","para_158","para_159","para_160","para_161","para_162","para_163","para_164","para_165","para_166","para_167","para_168","para_169","para_170","para_171","para_172","para_173","para_174","para_175","para_176","para_177","para_178","para_179","para_180","para_181","para_182","para_183","para_184","para_185","para_186","para_187","para_188","para_189","para_190","para_191","para_192","para_193","para_194","para_195","para_196","para_197","para_198","para_199","para_200","para_201","para_202","para_203","para_204","para_205","para_206","para_207","para_208","para_209","para_210","para_211","para_212","para_213","para_214","para_215","para_216","para_217","para_218","para_219","para_220","para_221","para_222","para_223","para_224","para_225","para_226","para_227","para_228","para_229","para_230","para_231","para_232","para_233","para_234","para_235","para_236","para_237","para_238","para_239","para_240","para_241","para_242","para_243","para_244","para_245","para_246","para_247","para_248","para_249","para_250","para_251","para_252","para_253","para_254","para_255","para_256","para_257","para_258","para_259","para_260","para_261","para_262"],"kind":"front_matter"},{"title":"SUMMARY","paragraphs":["para_263","para_264","para_265","para_266","para_267","para_268","para_269","para_270","para_271","para_272","para_273","para_274","para_275","para_276","para_277","para_278","para_279","para_280","para_281","para_282","para_283","para_284","para_285","para_286","para_287","para_288","para_289","para_290","para_291","para_292","para_293","para_294","para_295","para_296","para_297","para_298","para_299","para_300","para_301","para_302","para_303","para_304","para_305","para_306","para_307","para_308"],"kind":"summary"}],"paragraphs":[{"text":"United States Court of Appeals","paragraph_id":"para_1"},{"text":"for the Fifth Circuit","paragraph_id":"para_2"},{"text":"____________","paragraph_id":"para_3"},{"text":"No. 23-20567","paragraph_id":"para_4"},{"text":"____________","paragraph_id":"para_5"},{"text":"MIECO L.L.C.,","paragraph_id":"para_6"},{"text":"Plaintiff—Appellant/Cross-Appellee,","paragraph_id":"para_7"},{"text":"versus","paragraph_id":"para_8"},{"text":"Targa Gas Marketing L.L.C.,","paragraph_id":"para_9"},{"text":"Defendant—Appellee/Cross-Appellant.","paragraph_id":"para_10"},{"text":"______________________________","paragraph_id":"para_11"},{"text":"Appeal from the United States District Court","paragraph_id":"para_12"},{"text":"for the Southern District of Texas","paragraph_id":"para_13"},{"text":"USDC No. 4:21-CV-1128","paragraph_id":"para_14"},{"text":"______________________________","paragraph_id":"para_15"},{"text":"ON PETITION FOR REHEARING","paragraph_id":"para_16"},{"text":"(REVISED)","paragraph_id":"para_17"},{"text":"Before Elrod, Chief Judge, and Higginbotham and Southwick,","paragraph_id":"para_18"},{"text":"Circuit Judges.","paragraph_id":"para_19"},{"text":"Per Curiam:","paragraph_id":"para_20"},{"text":"The appeal involves a contract dispute about the delivery of natural","paragraph_id":"para_21"},{"text":"gas during Winter Storm Uri in 2021. This court earlier issued an opinion in","paragraph_id":"para_22"},{"text":"this appeal. MIECO L.L.C. v. Targa Gas Mktg. L.L.C., 161 F.4th 828 (5th","paragraph_id":"para_23"},{"text":"Cir. 2025). Targa Gas has filed a petition for rehearing en banc. The petition","paragraph_id":"para_24"},{"text":"emphasizes the significance of Part I of our original opinion’s Discussion","paragraph_id":"para_25"},{"text":"section, which was entitled “Partial Summary Judgment on Force Majeure.”","paragraph_id":"para_26"},{"text":"United States Court of Appeals","paragraph_id":"para_27"},{"text":"Fifth Circuit","paragraph_id":"para_28"},{"text":"FILED","paragraph_id":"para_29"},{"text":"July 24, 2026","paragraph_id":"para_30"},{"text":"Lyle W. Cayce","paragraph_id":"para_31"},{"text":"Clerk","paragraph_id":"para_32"},{"text":"Case: 23-20567 Document: 230 Page: 1 Date Filed: 07/31/2026","paragraph_id":"para_33"},{"text":"No. 23-20567","paragraph_id":"para_34"},{"text":"2","paragraph_id":"para_35"},{"text":"That section interpreted a standard-form gas supply contract and its","paragraph_id":"para_36","court_paragraph":2},{"text":"operation during periods of force majeure. Targa argues we have unsettled the","paragraph_id":"para_37"},{"text":"expectations on which the providers of natural gas operate. That part of the","paragraph_id":"para_38"},{"text":"opinion dealt with the circumstances, if any, that would require a natural gas","paragraph_id":"para_39"},{"text":"provider to enter the spot market to satisfy its contractual obligations.","paragraph_id":"para_40"},{"text":"The petition as well as briefing by an amicus make the obvious point","paragraph_id":"para_41"},{"text":"that the issues resolved in Part I of the original opinion’s Discussion section","paragraph_id":"para_42"},{"text":"are of exceptional importance to the Texas natural gas industry. The issues","paragraph_id":"para_43"},{"text":"are governed by state law and are not clearly resolved by the authorities on","paragraph_id":"para_44"},{"text":"which the court relied, a common reality for federal courts. The primary task","paragraph_id":"para_45"},{"text":"of the court’s earlier opinion was to interpret terms in the standard form","paragraph_id":"para_46"},{"text":"contract that, according to Targa, “governs the entire natural gas industry in","paragraph_id":"para_47"},{"text":"Texas.” The petition for rehearing en banc urges the court — only if not","paragraph_id":"para_48"},{"text":"convinced by the merits arguments, of course — to certify the question to the","paragraph_id":"para_49"},{"text":"Supreme Court of Texas. In light of the importance of the issues, and","paragraph_id":"para_50"},{"text":"because it may be that the court did affect settled expectations, we have","paragraph_id":"para_51"},{"text":"decided to certify the question.","paragraph_id":"para_52"},{"text":"We may certify an unsettled question of state law to a state’s highest","paragraph_id":"para_53"},{"text":"court when that court has a procedure permitting such questions to be posed.","paragraph_id":"para_54"},{"text":"See 17A Wright & Miller’s Federal Practice & Procedure","paragraph_id":"para_55"},{"text":"§ 4248 (3d ed. 2015). Texas has such a procedure, found both in the state","paragraph_id":"para_56"},{"text":"constitution and its appellate rules. See Tex. Const. art. V, § 3–c(a);","paragraph_id":"para_57"},{"text":"Tex. R. App. P. 58.1.","paragraph_id":"para_58"},{"text":"No judge in regular active service requested the court be polled on","paragraph_id":"para_59"},{"text":"rehearing en banc; therefore, the petition for rehearing en banc is DENIED.","paragraph_id":"para_60"},{"text":"See Fed. R. App. P. 40(c). Treating that petition as one for panel","paragraph_id":"para_61"},{"text":"rehearing, the petition is GRANTED in part. See 5th Cir. R. 40 I.O.P.","paragraph_id":"para_62"},{"text":"We withdraw Part I of the Discussion section of our prior panel opinion. The","paragraph_id":"para_63"},{"text":"Case: 23-20567 Document: 230 Page: 2 Date Filed: 07/31/2026","paragraph_id":"para_64"},{"text":"No. 23-20567","paragraph_id":"para_65"},{"text":"3","paragraph_id":"para_66"},{"text":"remainder of the opinion is unaffected by today’s ruling, and we again","paragraph_id":"para_67","court_paragraph":3},{"text":"AFFIRM the part of the judgment based on the jury verdict.","paragraph_id":"para_68"},{"text":"The panel issues the following opinion certifying a question to the","paragraph_id":"para_69"},{"text":"Supreme Court of Texas.","paragraph_id":"para_70"},{"text":"CERTIFICATION FROM THE UNITED STATES COURT OF","paragraph_id":"para_71"},{"text":"APPEALS FOR THE FIFTH CIRCUIT TO THE SUPREME","paragraph_id":"para_72"},{"text":"COURT OF TEXAS.","paragraph_id":"para_73"},{"text":"TO THE SUPREME COURT OF TEXAS AND THE","paragraph_id":"para_74"},{"text":"HONORABLE JUSTICES THEREOF:","paragraph_id":"para_75"},{"text":"STYLE OF THE CASE","paragraph_id":"para_76"},{"text":"The style of this case is MIECO, L.L.C. v. Targa Gas Mktg. L.L.C.,","paragraph_id":"para_77"},{"text":"No. 23-20567, in the United States Court of Appeals for the Fifth Circuit.","paragraph_id":"para_78"},{"text":"The case is on appeal from the United States District Court for the Southern","paragraph_id":"para_79"},{"text":"District of Texas. Federal jurisdiction is based on diversity of citizenship.","paragraph_id":"para_80"},{"text":"FACTUAL AND PROCEDURAL BACKGROUND","paragraph_id":"para_81"},{"text":"This court’s original opinion described in detail the background of this","paragraph_id":"para_82"},{"text":"case. See MIECO v. Targa, 161 F.4th at 833-35. An edited version follows.","paragraph_id":"para_83"},{"text":"MIECO L.L.C. and Targa Gas Marketing L.L.C. buy and sell natural","paragraph_id":"para_84"},{"text":"gas. In 2010, they signed a base contract to govern their future gas","paragraph_id":"para_85"},{"text":"transactions. The base contract does not compel either party to buy or sell","paragraph_id":"para_86"},{"text":"gas, but it does contain the basic terms governing future transactions.","paragraph_id":"para_87"},{"text":"The relevant terms and delivery obligations for this dispute are","paragraph_id":"para_88"},{"text":"detailed in two separate “transaction confirmations” that were executed on","paragraph_id":"para_89"},{"text":"October 1, 2020. In one, Targa agreed to sell MIECO 15,000 British thermal","paragraph_id":"para_90"},{"text":"units (MMBtu) of gas each day from November 1, 2020, through March 31,","paragraph_id":"para_91"},{"text":"2021, at a fixed “First-of-Month” (FOM) price. In the other, Targa was","paragraph_id":"para_92"},{"text":"Case: 23-20567 Document: 230 Page: 3 Date Filed: 07/31/2026","paragraph_id":"para_93"},{"text":"No. 23-20567","paragraph_id":"para_94"},{"text":"4","paragraph_id":"para_95"},{"text":"required to deliver 30,000 MMBtu per day at a variable, daily index price as","paragraph_id":"para_96","court_paragraph":4},{"text":"published by Gas Daily. Such daily purchases are in the “spot market.”","paragraph_id":"para_97"},{"text":"Their agreed-upon delivery location was the NNG Demarc pool in","paragraph_id":"para_98"},{"text":"northeastern Kansas. This litigation does not question Targa’s performance","paragraph_id":"para_99"},{"text":"under these agreements except for six days during Winter Storm Uri.","paragraph_id":"para_100"},{"text":"The storm caused significant disruptions in supply due to power","paragraph_id":"para_101"},{"text":"outages and the shutting down of equipment. According to the Department","paragraph_id":"para_102"},{"text":"of Energy, production of natural gas dropped 21 percent nationwide during","paragraph_id":"para_103"},{"text":"the storm. Targa did not deliver the required 45,000 MMBtu of gas each day","paragraph_id":"para_104"},{"text":"from February 15 until February 20, 2021. Instead, it delivered 9,375 MMBtu","paragraph_id":"para_105"},{"text":"on February 15; none on February 16, 17, 18, and 20; and 3,164 MMBtu on","paragraph_id":"para_106"},{"text":"February 19.","paragraph_id":"para_107"},{"text":"The parties’ base contract allowed interruptions in performance","paragraph_id":"para_108"},{"text":"without liability when the interruption was caused by force majeure. The","paragraph_id":"para_109"},{"text":"contract described that term as a “cause not reasonably within the control of","paragraph_id":"para_110"},{"text":"the party claiming suspension.” These are the relevant force majeure","paragraph_id":"para_111"},{"text":"contractual provisions:","paragraph_id":"para_112"},{"text":"11.1. [N]either party shall be liable to the other for failure to","paragraph_id":"para_113"},{"text":"perform a Firm obligation, to the extent such failure was caused","paragraph_id":"para_114"},{"text":"by Force Majeure.","paragraph_id":"para_115"},{"text":"11.2. Force Majeure shall include, but not be limited to . . . (ii)","paragraph_id":"para_116"},{"text":"weather related events affecting an entire geographic region,","paragraph_id":"para_117"},{"text":"such as low temperatures which cause freezing or failure of","paragraph_id":"para_118"},{"text":"wells or lines of pipe; . . . [and (vi) a claim of Force Majeure, as","paragraph_id":"para_119"},{"text":"described in clauses (i) through (v) above, by an Affiliate","paragraph_id":"para_120"},{"text":"supplying or receiving the Gas delivered or to be delivered","paragraph_id":"para_121"},{"text":"under this Contract.1] Seller and Buyer shall make reasonable","paragraph_id":"para_122"},{"text":"efforts to avoid the adverse impacts of a Force Majeure and to","paragraph_id":"para_123"},{"text":"_____________________","paragraph_id":"para_124"},{"text":"1 Clause (vi) was in an addendum to the base contract.","paragraph_id":"para_125"},{"text":"Case: 23-20567 Document: 230 Page: 4 Date Filed: 07/31/2026","paragraph_id":"para_126"},{"text":"No. 23-20567","paragraph_id":"para_127"},{"text":"5","paragraph_id":"para_128"},{"text":"resolve the event or occurrence once it has occurred in order to","paragraph_id":"para_129","court_paragraph":5},{"text":"resume performance.","paragraph_id":"para_130"},{"text":"11.3. Neither party shall be entitled to the benefit of the","paragraph_id":"para_131"},{"text":"provisions of Force Majeure to the extent performance is","paragraph_id":"para_132"},{"text":"affected by any or all of the following circumstances: . . . (ii) the","paragraph_id":"para_133"},{"text":"party claiming excuse failed to remedy the condition and to","paragraph_id":"para_134"},{"text":"resume the performance of such covenants or obligations with","paragraph_id":"para_135"},{"text":"reasonable dispatch; or (iii) economic hardship, to include,","paragraph_id":"para_136"},{"text":"without limitation, Seller’s ability to sell Gas at a higher or","paragraph_id":"para_137"},{"text":"more advantageous price than the Contract Price . . . ; or (v)","paragraph_id":"para_138"},{"text":"the loss or failure of Seller’s gas supply or depletion of reserves,","paragraph_id":"para_139"},{"text":"except, in either case, as provided in Section 11.2.","paragraph_id":"para_140"},{"text":"Targa invoked the agreement’s force majeure provisions on February","paragraph_id":"para_141"},{"text":"17, 2021, crediting (1) a weather-related event affecting an entire geographic","paragraph_id":"para_142"},{"text":"region beginning on or around February 12 and (2) the declaration of force","paragraph_id":"para_143"},{"text":"majeure by Targa’s affiliates. MIECO rejected Targa’s claim of force majeure.","paragraph_id":"para_144"},{"text":"Pursuant to a different agreement between these parties, buyer and","paragraph_id":"para_145"},{"text":"seller were reversed, and MIECO delivered gas to Targa. That part of the","paragraph_id":"para_146"},{"text":"litigation is not relevant to the certification to the Supreme Court of Texas.","paragraph_id":"para_147"},{"text":"Targa brought its suit against MIECO in Texas state court, seeking a","paragraph_id":"para_148"},{"text":"declaration that force majeure excused its failure to provide the contracted-for","paragraph_id":"para_149"},{"text":"quantities of gas for the few days of the winter storm. MIECO removed the","paragraph_id":"para_150"},{"text":"case to the United States District Court for the Southern District of Texas","paragraph_id":"para_151"},{"text":"based on diversity jurisdiction. It asserted a counterclaim for breach of","paragraph_id":"para_152"},{"text":"contract. Targa moved for partial summary judgment, contending the force","paragraph_id":"para_153"},{"text":"majeure provisions in Section 11 of the contract excused its performance","paragraph_id":"para_154"},{"text":"under the FOM and Gas Daily contracts.","paragraph_id":"para_155"},{"text":"The district court granted Targa partial summary judgment, holding","paragraph_id":"para_156"},{"text":"“that Uri was a force majeure event as it pertains to Targa’s obligations under","paragraph_id":"para_157"},{"text":"the Contract and that the Contract did not require Targa to purchase","paragraph_id":"para_158"},{"text":"Case: 23-20567 Document: 230 Page: 5 Date Filed: 07/31/2026","paragraph_id":"para_159"},{"text":"No. 23-20567","paragraph_id":"para_160"},{"text":"6","paragraph_id":"para_161"},{"text":"replacement gas.” The district court explained that the gas volume at","paragraph_id":"para_162","court_paragraph":6},{"text":"“Targa and its affiliate gas pro[c]essing plants fell in production by 80%,”","paragraph_id":"para_163"},{"text":"and that Targa sent a notice to MIECO stating: “The gas supply for our sale","paragraph_id":"para_164"},{"text":"to you is being or would have been sourced from facilities (including facilities","paragraph_id":"para_165"},{"text":"owned or operated by Targa’s affiliates) which are experiencing these force","paragraph_id":"para_166"},{"text":"majeure events.” The district court then concluded that the production","paragraph_id":"para_167"},{"text":"disruptions by Targa’s affiliate suppliers excused Targa’s failure to deliver","paragraph_id":"para_168"},{"text":"gas at a major trading pool in the Midwest, notwithstanding the fact that","paragraph_id":"para_169"},{"text":"Targa, a marketing company that produces none of the gas it sells, could have","paragraph_id":"para_170"},{"text":"met its delivery obligations had it purchased gas from non-affiliate sellers.","paragraph_id":"para_171"},{"text":"After the jury rendered a verdict on another part of the litigation, the","paragraph_id":"para_172"},{"text":"district court entered judgment for the parties’ stipulated amount of","paragraph_id":"para_173"},{"text":"$6,933,814.94. MIECO timely appealed the grant of partial summary","paragraph_id":"para_174"},{"text":"judgment, and Targa cross-appealed the jury’s verdict. To be clear, we again","paragraph_id":"para_175"},{"text":"AFFIRM the judgment insofar as it is based on the jury verdict.","paragraph_id":"para_176"},{"text":"DISCUSSION","paragraph_id":"para_177"},{"text":"The part of this case relevant to the certification to the Supreme Court","paragraph_id":"para_178"},{"text":"of Texas was resolved by the district court through a grant of a partial","paragraph_id":"para_179"},{"text":"summary judgment. The issue is whether Targa’s contract to provide","paragraph_id":"para_180"},{"text":"natural gas to MIECO required it to enter the spot market during a force","paragraph_id":"para_181"},{"text":"majeure event when, before that event, Targa had been satisfying its","paragraph_id":"para_182"},{"text":"contractual obligations in part by purchasing on the spot market. The district","paragraph_id":"para_183"},{"text":"court answered “no.” This court’s original panel opinion answered “yes.”","paragraph_id":"para_184"},{"text":"We give some of the details.","paragraph_id":"para_185"},{"text":"Section 11.3(v) of the force majeure section in the Targa contract with","paragraph_id":"para_186"},{"text":"MIECO states that the provision is inapplicable to “the loss or failure of","paragraph_id":"para_187"},{"text":"Seller’s gas supply or depletion of reserves, except, in either case, as provided","paragraph_id":"para_188"},{"text":"in Section 11.2.” Section 11.2 describes what force majeure events are:","paragraph_id":"para_189"},{"text":"Case: 23-20567 Document: 230 Page: 6 Date Filed: 07/31/2026","paragraph_id":"para_190"},{"text":"No. 23-20567","paragraph_id":"para_191"},{"text":"7","paragraph_id":"para_192"},{"text":"“weather related events affecting an entire geographic region, such as low","paragraph_id":"para_193","court_paragraph":7},{"text":"temperatures which cause freezing or failure of wells or lines of pipe.”","paragraph_id":"para_194"},{"text":"The central issue, then, is to define “gas supply” in order to","paragraph_id":"para_195"},{"text":"determine when there is a loss or failure. In an earlier MIECO case, we","paragraph_id":"para_196"},{"text":"defined “gas supply” in this same form contract provision to mean the gas","paragraph_id":"para_197"},{"text":"“owned or possessed by” the producer, which was coming from wells in the","paragraph_id":"para_198"},{"text":"Permian basin. MIECO, L.L.C. v. Pioneer Nat. Res. USA, Inc., 109 F.4th 710,","paragraph_id":"para_199"},{"text":"721 (5th Cir. 2024) (quotation omitted). Specifically, we held the spot","paragraph_id":"para_200"},{"text":"market was not part of the “gas supply.” Id. at 724.","paragraph_id":"para_201"},{"text":"New York law needed to be applied in that case, but our original panel","paragraph_id":"para_202"},{"text":"opinion determined that the law of Texas was the same. MIECO v. Targa,","paragraph_id":"para_203"},{"text":"161 F.4th at 843. More importantly, Pioneer concerned the obligations of a","paragraph_id":"para_204"},{"text":"gas producer whose gas supply was readily defined by the sources from which","paragraph_id":"para_205"},{"text":"it was producing. The Pioneer court understood that its reasoning might not","paragraph_id":"para_206"},{"text":"apply to the situation of a middleman supplier. Id. at 721–22. Targa is such","paragraph_id":"para_207"},{"text":"an intermediary, and this court needed to take the next analytical step.","paragraph_id":"para_208"},{"text":"The original panel opinion in this case analyzed other relevant","paragraph_id":"para_209"},{"text":"authorities, and we do not restate those explanations here. See MIECO v.","paragraph_id":"para_210"},{"text":"Targa, 161 F.4th at 837–41 (first citing Virginia Power Energy Mktg., Inc. v.","paragraph_id":"para_211"},{"text":"Apache Corp., 297 S.W.3d 397 (Tex. App.—Houston [14th Dist.] 2009, pet.","paragraph_id":"para_212"},{"text":"denied); then citing Tejas Power Corp. v. Amerada Hess Corp., No. 14-98-","paragraph_id":"para_213"},{"text":"00346-CV, 1999 WL 605550 (Tex. App.—Houston [14th Dist.] Aug. 12,","paragraph_id":"para_214"},{"text":"1999, no pet.); and then citing LNG Ams., Inc. v. Chevron Nat. Gas, No. H-","paragraph_id":"para_215"},{"text":"21-2226, 2023 WL 2920940 (S.D. Tex. Apr. 12, 2023)).","paragraph_id":"para_216"},{"text":"These precedents guided us as we determined the contractually","paragraph_id":"para_217"},{"text":"relevant sources of gas supply that needed to have been lost or to have failed.","paragraph_id":"para_218"},{"text":"We relied on evidence that before Winter Storm Uri, Targa had fulfilled its","paragraph_id":"para_219"},{"text":"obligations under its contract with MIECO by obtaining natural gas from its","paragraph_id":"para_220"},{"text":"Case: 23-20567 Document: 230 Page: 7 Date Filed: 07/31/2026","paragraph_id":"para_221"},{"text":"No. 23-20567","paragraph_id":"para_222"},{"text":"8","paragraph_id":"para_223"},{"text":"affiliates but had also made purchases of, on average, about 29 percent of its","paragraph_id":"para_224","court_paragraph":8},{"text":"contract needs from non-affiliates. See MIECO v. Targa, 161 F.4th at 839.","paragraph_id":"para_225"},{"text":"There was evidence that Targa purchased gas from 25 to 50 entities daily","paragraph_id":"para_226"},{"text":"during the period of its contract with MIECO. See id.","paragraph_id":"para_227"},{"text":"From all this, this court determined that the relevant “gas supply”","paragraph_id":"para_228"},{"text":"that had to be lost or to have failed was comprised of the sources from which","paragraph_id":"para_229"},{"text":"Targa had been purchasing during the earlier period of the contract. Id. at","paragraph_id":"para_230"},{"text":"842. That meant that to the extent gas could still be purchased during the","paragraph_id":"para_231"},{"text":"winter storm from the same daily or spot market, that part of Targa’s existing","paragraph_id":"para_232"},{"text":"gas supply remained available even if the price there had dramatically","paragraph_id":"para_233"},{"text":"changed. Id. Targa’s obligations did not extend beyond purchasing from the","paragraph_id":"para_234"},{"text":"daily market from which it had previously made purchases. It was Targa’s","paragraph_id":"para_235"},{"text":"gas supply, not the industry’s, from which Targa had to keep purchasing. Id.","paragraph_id":"para_236"},{"text":"A related issue under the Targa-MIECO contract is that the party","paragraph_id":"para_237"},{"text":"claiming force majeure must “make reasonable efforts to avoid the adverse","paragraph_id":"para_238"},{"text":"impacts of a Force Majeure and [must] resolve the event or occurrence once","paragraph_id":"para_239"},{"text":"it has occurred in order to resume performance.” See id. at 842–44","paragraph_id":"para_240"},{"text":"(discussing Section 11.2 of the base contract). Economic hardship, though,","paragraph_id":"para_241"},{"text":"was not sufficient to excuse purchase from its usual gas supply. Id. at 842.","paragraph_id":"para_242"},{"text":"We had determined that Targa still had to purchase from its usual gas supply","paragraph_id":"para_243"},{"text":"sources during the force majeure event despite the dramatic price change, but","paragraph_id":"para_244"},{"text":"the district court had not made any findings regarding what efforts Targa had","paragraph_id":"para_245"},{"text":"made or should have made “to avoid the adverse impacts of a Force Majeure”","paragraph_id":"para_246"},{"text":"event. Id. at 843. “When [‘reasonable’] modifies other terms in a contract","paragraph_id":"para_247"},{"text":"— reasonable time, reasonable value — it is used by the parties to designate","paragraph_id":"para_248"},{"text":"that specific time, value, or dispatch that ‘would be thought satisfactory to","paragraph_id":"para_249"},{"text":"the offeror by a reasonable man in the position of the offeree.’” Ergon-W.","paragraph_id":"para_250"},{"text":"Va., Inc. v. Dynegy Mktg. & Trade, 706 F.3d 419, 425 (5th Cir. 2013) (quoting","paragraph_id":"para_251"},{"text":"Case: 23-20567 Document: 230 Page: 8 Date Filed: 07/31/2026","paragraph_id":"para_252"},{"text":"No. 23-20567","paragraph_id":"para_253"},{"text":"9","paragraph_id":"para_254"},{"text":"Christy v. Andrus, 722 S.W.2d 822, 824 (Tex. App.—Eastland 1987, writ","paragraph_id":"para_255","court_paragraph":9},{"text":"ref’d n.r.e.)); see MIECO v. Targa, 161 F.4th at 843.","paragraph_id":"para_256"},{"text":"Because the district court had determined Targa did not need to enter","paragraph_id":"para_257"},{"text":"the spot market, it had not examined the evidence as to what Targa actually","paragraph_id":"para_258"},{"text":"had done, whether its efforts were reasonable, and the extent to which there","paragraph_id":"para_259"},{"text":"was a loss or failure of its gas supply as we defined it after reasonable efforts.","paragraph_id":"para_260"},{"text":"We therefore reversed and remanded on that issue. See MIECO v. Targa, 161","paragraph_id":"para_261"},{"text":"F.4th at 843, 849.","paragraph_id":"para_262"},{"text":"SUMMARY","paragraph_id":"para_263"},{"text":"This court determined that “gas supply” under this standard form","paragraph_id":"para_264"},{"text":"contract widely used in the Texas natural gas industry required a non-","paragraph_id":"para_265"},{"text":"producer of natural gas, who under its contract to provide natural gas had","paragraph_id":"para_266"},{"text":"been purchasing in part from the spot market before a force majeure event, had","paragraph_id":"para_267"},{"text":"to continue to do so during that event to the extent reasonable even if an","paragraph_id":"para_268"},{"text":"economic hardship. In reaching the conclusion, we examined related but not","paragraph_id":"para_269"},{"text":"directly on-point caselaw from this court and from Texas courts.","paragraph_id":"para_270"},{"text":"Whether a supplier of natural gas under this standard form contract","paragraph_id":"para_271"},{"text":"has to purchase natural gas in the spot market during a force majeure event","paragraph_id":"para_272"},{"text":"when it has been purchasing in the spot market in satisfying its obligations","paragraph_id":"para_273"},{"text":"under the contract before that event is a “determinative question[] of Texas","paragraph_id":"para_274"},{"text":"law having no controlling Supreme Court precedent.” Tex. R. App. P.","paragraph_id":"para_275"},{"text":"58.1. This court has identified factors it should consider before certifying a","paragraph_id":"para_276"},{"text":"question to a state court, the most important of which are the “closeness of","paragraph_id":"para_277"},{"text":"the question” and “the existence of sufficient sources of state law.”","paragraph_id":"para_278"},{"text":"Williamson v. Elf Aquitaine, Inc., 138 F.3d 546, 549 (5th Cir. 1998) (citation","paragraph_id":"para_279"},{"text":"omitted). In addition, considerations of comity and practical problems such","paragraph_id":"para_280"},{"text":"as delay are also to be evaluated. Id. Three out of four support certification:","paragraph_id":"para_281"},{"text":"(1) that we do see the issue as close, (2) there are insufficient state law","paragraph_id":"para_282"},{"text":"Case: 23-20567 Document: 230 Page: 9 Date Filed: 07/31/2026","paragraph_id":"para_283"},{"text":"No. 23-20567","paragraph_id":"para_284"},{"text":"10","paragraph_id":"para_285"},{"text":"authorities, and (3) the answer to the question is of importance to a significant","paragraph_id":"para_286","court_paragraph":10},{"text":"Texas industry and to those who rely on it, matters that satisfy the interests","paragraph_id":"para_287"},{"text":"of comity. Unfortunately, the delay in resolving this issue is extensive","paragraph_id":"para_288"},{"text":"already, and this adds to it. Still, getting the answer right is critical.","paragraph_id":"para_289"},{"text":"We respectfully request an answer from that court on this state-law","paragraph_id":"para_290"},{"text":"issue of first impression.","paragraph_id":"para_291"},{"text":"QUESTION CERTIFIED","paragraph_id":"para_292"},{"text":"We certify the following two questions of state law to the Supreme","paragraph_id":"para_293"},{"text":"Court of Texas:","paragraph_id":"para_294"},{"text":"Under Texas contract interpretation principles, do the force","paragraph_id":"para_295"},{"text":"majeure provisions of the North American Energy Standards","paragraph_id":"para_296"},{"text":"Board form contract require the seller of natural gas who is not","paragraph_id":"para_297"},{"text":"a gas producer to enter the spot market during a force majeure","paragraph_id":"para_298"},{"text":"event if that seller had already been using the daily or spot","paragraph_id":"para_299"},{"text":"market for part of its gas supply?","paragraph_id":"para_300"},{"text":"If there is an obligation on those facts, the second question is:","paragraph_id":"para_301"},{"text":"How should “reasonable efforts” to provide gas from the spot","paragraph_id":"para_302"},{"text":"market be defined?","paragraph_id":"para_303"},{"text":"Our framing of these certified questions should not be construed as","paragraph_id":"para_304"},{"text":"limiting the form or scope of the response by the Court.","paragraph_id":"para_305"},{"text":"QUESTION CERTIFIED TO THE SUPREME COURT OF","paragraph_id":"para_306"},{"text":"TEXAS.","paragraph_id":"para_307"},{"text":"Case: 23-20567 Document: 230 Page: 10 Date Filed: 07/31/2026","paragraph_id":"para_308"}],"word_count":3021,"cites":["161 F.4th 828","109 F.4th 710","706 F.3d 419","138 F.3d 546"],"cited_by":[],"sha256":"f86ffe6a6ac2fb70bb1003e8db2b672d934865b3335f7607633e7fb8e8a7e28d","source_url":"http://www.ca5.uscourts.gov/opinions/pub/23/23-20567-CV1.pdf","fetched_at":"2026-09-28T06:11:11.673+00:00","canonical":"https://legal.exploreworldai.com/ai/judgments/us/ca5-23-20567-2025-12-09","risk_graph":"https://legal.exploreworldai.com/api/public/v1/risk?id=us:ca5-23-20567-2025-12-09","relations_graph":"https://legal.exploreworldai.com/api/public/v1/relations?id=us:ca5-23-20567-2025-12-09","changes":"https://legal.exploreworldai.com/api/public/v1/us-praxis/changes","agent":"https://legal.exploreworldai.com/api/public/v1/us-praxis/agent?id=us:ca5-23-20567-2025-12-09","verification":{"stored_sha256":"f86ffe6a6ac2fb70bb1003e8db2b672d934865b3335f7607633e7fb8e8a7e28d","recomputed_sha256":"f86ffe6a6ac2fb70bb1003e8db2b672d934865b3335f7607633e7fb8e8a7e28d","intact":true,"checked_at":"2026-10-10T14:24:20.228Z"}},"hash":"sha256:b5c336455ff558efc9d2d8b56ac76c4bd9bf2a778bee27785ffa8bb7e78256d8","version":"legal-2026-10-10","expires":"2026-10-11T00:00:00.000Z","dependency":{"index_version":"legal-2026-10-10+legal-2026-10-10+2026-10-10T14:11:01","content_hash":"sha256:b5c336455ff558efc9d2d8b56ac76c4bd9bf2a778bee27785ffa8bb7e78256d8","revalidate_after":"2026-10-10T15:24:20.402Z","max_copy_age_seconds":3600,"policy":"revalidate-required; attribution-preferred","changelog":"https://legal.exploreworldai.com/api/public/v1/dependency","verify":"https://legal.exploreworldai.com/api/public/v1/verify","stale_copy_invalid":true},"canonical":"https://legal.exploreworldai.com/api/public/v1/judgment-text?id=us:ca5-23-20567-2025-12-09","follow":[{"rel":"risk","href":"https://legal.exploreworldai.com/api/public/v1/risk?id=us:ca5-23-20567-2025-12-09"},{"rel":"relations","href":"https://legal.exploreworldai.com/api/public/v1/relations?id=us:ca5-23-20567-2025-12-09"},{"rel":"agent","href":"https://legal.exploreworldai.com/api/public/v1/us-praxis/agent?id=us:ca5-23-20567-2025-12-09"},{"rel":"obligations","href":"https://legal.exploreworldai.com/api/public/v1/obligation-chain"},{"rel":"changes","href":"https://legal.exploreworldai.com/api/public/v1/whats-new?jurisdiction=us"}],"disclaimer":"Source reference with official identifier. 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