Tenneco Inc. v. Enterprise Products Co.

Tenneco Oil Company and Enterprise Products Co. and other mineral companies jointly owned a natural gas liquids fractionation plant under an operating agreement giving each owner a right of first refusal before any owner sold its ownership interest to a third party, with an exception for transfers to wholly owned subsidiaries. Tenneco Oil transferred its interest to its own wholly owned subsidiary, Tenneco Natural Gas Liquids, without triggering the right of first refusal under that exception, and later sold all of that subsidiary's stock to Enron Gas Processing Company. Enterprise Products and the other owners (plaintiffs) sued Tenneco, arguing the stock sale should have triggered their right of first refusal; the trial court granted Tenneco summary judgment, the court of appeals reversed, and Tenneco appealed.