Plains Exploration & Production Company v. Torch Energy Advisors Incorporated, 473 S.W.3d 296

Background

Torch sold its Ogle lease interests to Plains via the 1996 PSA, reserving certain Excluded Assets including claims and proceeds arising before October 1, 1995; Amber litigation later awarded restitution against the U.S. for breach/repudiation of the leases, with Plains as recipient and Torch seeking a share under the 1996 PSA's Excluded Assets; CZMA amendments (1990) required consistency determinations for offshore activities, but MMS initially did not apply them to suspensions, affecting lease development; Norton I injunction in 2001 compelled consistency determinations and halted development, leading to Amber I/II outcomes; Plains acquired Nuevo’s interest and later Plains/Successor to Ogle leases, with Torch alleging that Amber proceeds were excluded under 1.2(b) or 1.2(g) of the PSA; the trial court granted Plains summary judgment and the court of appeals reversed in part, remanding Torch’s equitable claim for trial; the Texas Supreme Court held the excluded-assets provisions are unambiguous and Torch did not retain the Amber proceeds, reversing and rendering for Torch to take nothing.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Do 1.2(b) and 1.2(g) exclude Amber proceeds from the transfer to Plains?	Torch contends Amber proceeds were excluded assets under 1.2(b)(i)/(ii) and 1.2(g).	Plains contends the Amber proceeds arose post‑effective date and are not excluded.	Amber proceeds are not excluded assets; Torch takes nothing.
Are the excluded-assets terms ambiguous, requiring remand for factfinding on intent?	Torch argues the language allows two reasonable readings, creating ambiguity.	Plains argues the terms are unambiguous in excluding post‑effective-date claims.	The terms are unambiguous; no remand for intent needed.
What is the correct interpretive standard for phrases 'arising from',''arising under or with respect to','and 'attributable to' as used in 1.2(b)/(g)?	Torch urges broad 'but-for' or substantial-factor causation.	Plains urges a narrowed, substantial-factor nexus aligned with contract purpose.	The court adopts a substantial-factor nexus, not broad 'but-for' causation, so Amber is not excluded.

Key Cases Cited

Amber Res. Co. v. United States, 68 Fed.Cl. 535 (Fed. Cl. 2005) (restitution for government repudiation of leases; Amber II (Fed.Cir. 2008) upheld restitution amount but not pre‑2001 repudiation timing)
Amber Res. Co. v. United States, 538 F.3d 1358 (Fed.Cir. 2008) (Amber II; CZMA amendments did not themselves repudiated leases; first effect in 2001 Norton I injunction)
Norton v. Norton I, 150 F.Supp.2d 1046 (N.D. Cal. 2001) (Norton I injunction regarding CZMA consistency determinations)
Norton v. Norton II, 311 F.3d 1162 (9th Cir. 2002) (affirmed obligation to conduct consistency determinations; part of Amber framework)
Moayedi v. Interstate 35/Chisam Rd., L.P., 438 S.W.3d 1 (Tex. 2014) (contract interpretation; objective is to ascertain true intent)
El Paso Field Servs., L.P. v. MasTec N. Am., Inc., 389 S.W.3d 802 (Tex. 2012) (ambiguity and contract interpretation standards)
Utica Nat’l Ins. Co. of Tex. v. Am. Indem. Co., 141 S.W.3d 198 (Tex. 2004) (definition of 'arising from' in exclusions)
Lancer Ins. Co. v. Garcia Holiday Tours, 345 S.W.3d 50 (Tex. 2011) (causal standards for exclusions in insurance context)
Borg-Warner Corp. v. Flores, 232 S.W.3d 765 (Tex. 2007) (construction of exclusionary provisions; substantial-factor standard)
In re Dillard Dep’t Stores, Inc., 186 S.W.3d 514 (Tex. 2006) (contract interpretation; ambiguity and fact-finder guidance)
Lane Bank Equip. Co. v. Smith S. Equip., Inc., 10 S.W.3d 308 (Tex. 2000) (interpretation of contract language; intent of parties)
Grohman v. Kahlig, 318 S.W.3d 882 (Tex. 2010) (ambiguity and extrinsic-context in contract interpretation)
City of Pasadena v. Gennedy, 125 S.W.3d 687 (Tex.App.—Houston [1st Dist.] 2003) (extrinsic evidence limited in ambiguity analysis)