BHP Petroleum Co., Inc. v. Millard
In BHP Petroleum Co., Inc. v. Millard, 800 S.W.2d 838, 841 (Tex. 1990), the Texas Supreme Court concluded that when a "declaratory judgment counterclaim has greater ramifications than the original suit," the court may allow the counterclaim. 800 S.W.2d at 842.
BHP Petroleum ("BHP"), a producer and seller of natural gas, brought suit in Harris County against ANR Pipeline Company ("ANR"), an entity engaged in the purchasing, transporting, and selling of natural gas, for various breaches of contract. Id. at 839.
ANR filed an original answer and counterclaim for declaratory relief asserting, among other things, "that revolutionary changes in the interstate natural gas industry have combined to excuse ANR's customers from obligation to gas from ANR . . . ." Id. at 839 & n.4.
The supreme court noted that "BHP's suit is essentially one for breach of the 'take-or-pay' obligation of the gas purchase contract and 'consequential damages' and requested relief for underpayment for ANR's alleged failure to purchase or pay for specific quantities of BHP's gas . . . ." Id. at 842.
The supreme court further noted that "ANR's counterclaim sought an interpretation of the gas purchase contract which would have the effect of defining the obligations of the parties under the contract for the foreseeable future." Id.
Based on the uncertainty created by changing industry conditions, the supreme court concluded that the ANR's counterclaim had greater ramifications than BHP's original suit and, therefore, allowed the counterclaim to remain. Id.