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V&E Wins Important Texas Supreme Court Ruling

Published: 03-06-2017

In a significant win for Vinson & Elkins client MacAndrews & Forbes Holdings, Inc. (MAFCO), the Texas Supreme Court has dealt a major blow to a lawsuit brought by Pepsi-Cola Metropolitan Bottling Company, Inc. challenging a $300 million asbestos settlement.

Overturning adverse decisions issued by the trial court and the Fourteenth District Court of Appeals, the high court ruled on March 2, 2017, that the state’s courts lack specific personal jurisdiction over MAFCO. The case has been remanded for consideration of Pepsi’s alternative jurisdictional arguments.

The dispute centers around a 2011 settlement agreement executed in New York between Cooper Industries, LLC and Pneumo Abex LLC, a company once affiliated with a MAFCO entity, resolving certain asbestos related indemnity claims. Pepsi claims that the settlement, which was approved by a New York trial court, vitiated a separate asbestos indemnification agreement it struck with Pneumo Abex, exposing Pepsi to hundreds of millions in potential liability. Rather than challenge the 2011 settlement in New York, Pepsi sued in Texas, arguing among other things that the state’s courts have jurisdiction over MAFCO because its representatives had traveled to the state for preliminary settlement negotiations with Cooper.

The trial court and the Fourteenth District Court of Appeals agreed with Pepsi, denying MAFCO’s jurisdictional challenge. The Texas Supreme Court reversed, ruling that Pepsi’s claims hinge on alleged conduct that occurred outside of Texas.

“In negotiating, executing, and carrying out the settlement agreement, the MAFCO defendants did not seek to do business in Texas, commit a tort in Texas, or allegedly cause injury to Pepsi in Texas,” the high court ruled. “Further, to the extent the MAFCO defendants purposefully directed activities toward Texas, Pepsi’s causes of action do not arise from those contacts. Accordingly, the trial court lacks specific jurisdiction over the MAFCO defendants in this suit.”

MAFCO is represented by V&E partners Harry Reasoner, Jason Powers and Michael Heidler.


Lawyer Contacts

+1.713.758.2358
hreasoner@velaw.com
+1.713.758.2522
jpowers@velaw.com
+1.512.542.8579
mheidler@velaw.com

Media Contact

Jeremy Heallen Communications Manager

T +1.713.758.2079
jheallen@velaw.com

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