Oil & Gas Client Notches Victory in Business Litigation
Recently, our team of attorneys represented a California company whose work consisted of testing pipelines in the oil & gas industry. For over 25 years, it’s business consisted of performing hydro static testing of pipelines for the oil & gas industry. Persons performing those tests must agree to be subjected to a random drug testing protocol. The Code of Federal Regulations, 49 CFR 199 et seq. sets forth the requirements. Our client had agreed to subject it’s employees to testing according to a Public Interpretation (PI) of that CFR. The PI was issued by a manager in the U.S Department of Transportation, under whose oversight the testing regimen was regulated. Two pipelines that used the services of our client also utilized the services of an out of state auditing company that monitored the drug testing programs of persons performing the testing of the pipelines. In 2007, the U.S. Department of Transportation issued a Best Practices Guide which arguably increased the desired frequency testing. According to the auditing company, this increased the number of times employees were subjected to random testing. However, as this was merely a Best Practice Guide, the client elected to continue testing as it had been for many years.
The auditing company issued an opinion to two customers of our client. It set forth that our client was not in compliance with the Best Practice Guide. As a result, our client lost the ability to service two major pipeline companies for whom it has worked for approximately 20 years. Of course, litigation ensued based on our client’s allegation that the auditing company had tortiously interfered in the client’s contractual relationship with the pipelines. The auditing company defended the allegations by insisting, inter alia, that it’s opinion was only advisory and not mandatory. After a highly contested lawsuit, and about one month before trial in a Texas state district court, the auditing company settled in confidential terms favorable to our firm’s client.
Thomas M. Fountain & Associates, P.C., (formerly known as Fountain, Bruce & Mellencamp, PLLC) was formed in 1992. It is located in The Woodlands, Texas. The Firm enjoys the highest rating of AV Preeminent for Ethics and Ability issued by the oldest Peer Reviewed Company in the United States. These ratings are by fellow lawyers and judges. The firm enjoys an unparalleled track record at the Courthouse representing our clients when they need us the most. The Firm is a listee of A.M. Best Recommended Insurance Attorneys.
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