DALLAS, March 20, 2025 /PRNewswire/ -- A state court in Beaver County, Pennsylvania, awarded $51.98 million to RM client Cardinal Midstream II, LLC in a long-running contract dispute with Energy Transfer, LP and related entities over an earnout payment owed to Cardinal.

The March 10, 2025 ruling by Hon. James J. Ross finds Energy Transfer liable for failing to pay a $33 million earnout to Cardinal as part of its purchase of a gathering system from Cardinal and its joint-venture partner in 2017. The court held that Energy Transfer breached its contractual obligations by connecting the gathering system directly into its own pipeline such that Energy Transfer could monopolize the gas flow to its own refinery instead of providing an additional route to a competitor's refinery. Finally, the ruling determined that Energy Transfer's negligent construction of its 40.5-mile Revolution Pipeline contributed to an explosion in Beaver County shortly after the earnout period began, rejecting Energy Transfer's force majeure defense.

"Energy Transfer's greed overcame legal requirements," the court found. "Defendants' choices/decisions left the gathering system with inadequate capacity to accept the requisite amount of gas to meet the earnout provisions of the purchase agreement once the Revolution Pipeline was not available during the earnout period."

The judgment follows an 18-day bench trial before Judge Ross between December 2024 and January 2025. The ruling awards Cardinal $33 million in damages and $18.98 million in prejudgment interest.

"Cardinal hired us just four months before trial in this long-running dispute with Energy Transfer, a company we've faced in multiple other cases," said Joel Reese, Cardinal's lead attorney at trial. "With over 1,500 designated exhibits, 65 potential witnesses, 262 admitted exhibits, 15 fact witnesses, and eight experts, the trial was an immense undertaking."

The court observed that a few key Energy Transfer executives appeared as "programmed witnesses who had standard or programmed answers when questioned on cross; whereas when called on direct by Energy Transfer their demeanor changed and they answered questions clearly and without hesitation." In particular, the court found that the testimony of Energy Transfer's vice president of crude oil was "very suspect and concerning"and that he "stonewalled" when answering important questions from Cardinal's counsel.

"The court's well-reasoned opinion clearly demonstrates our decisive victory," Reese said.

The RM team representing Cardinal at trial included partners Pete Marketos, Josh Russ, and Adam Sanderson; associate Whitney Wendel; and paralegal Dee Dee Carr.

Founded in 2011, Reese Marketos is a Dallas-based trial boutique that specializes in high-stakes commercial litigation ranging from tens-of-millions of dollars to bet-the-company cases. For more information, visit rm-firm.com.

SOURCE Reese Marketos LLP