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"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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