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In re Plains All Am. Pipeline, L.P.

Court of Chancery of Delaware

August 8, 2017, Decided; August 8, 2017, EFiled

CONSOLIDATED C.A. No. 11954-VCMR

Opinion

POST-TRIAL ORDER

WHEREAS, Plaintiffs seek books and records of Defendants under Section 3.4(a) of the Plains All American Pipeline, L.P. ("Plains") limited partnership agreement1 and 6 Del. C. § 17-305(a) to investigate whether an oil spill from a Plains pipeline in California was the result of mismanagement;

WHEREAS, the facts in this order are my findings based on the parties' pre-trial stipulation, 117 documentary exhibits introduced at a trial on February 16, 2017, and the parties' pre- and post-trial briefing; and I grant the evidence the weight and credibility that I find it deserves;2

NOW, THEREFORE, THE COURT HEREBY FINDS AND ORDERS:

1. Plaintiffs lack standing to obtain the books and records of Plains GP Holdings, L.P. The remaining Defendants shall produce the documents listed in paragraph 47 of the Joint Pre-Trial Order going back to 2010. Plains may redact non-responsive data, and the parties shall negotiate a confidentiality stipulation. The production shall be incorporated by reference into any subsequent derivative complaint on the terms described in Amalgamated Bank v. Yahoo! Inc. (132 A.3d 752 (Del. Ch. 2016)) (the "Incorporation Condition"). Plaintiffs shall bear the expense of gathering, transporting, [*2]  and copying the documents. Defendants shall be responsible for their own attorneys' fees and expenses—including, but not limited to, any vendor fees, expenses, and costs—in connection with any privilege or confidentiality review.

2. Defendant Plains is a publicly traded Delaware master limited partnership that, through its subsidiaries, owns and operates midstream energy infrastructure, including crude oil pipelines in the United States and Canada. PTO ¶ 8. Defendant PAA GP LLC, a Delaware limited liability company, is the general partner of Plains and holds a 2% interest in Plains. JX 117. Defendant Plains AAP, L.P., a Delaware limited partnership, is the sole owner of PAA GP LLC. Id. And Defendant Plains All American GP LLC, a Delaware limited liability company, is the general partner of Plains AAP, L.P. Id. Plains All American GP LLC manages Plains's operations and activities and employs its domestic employees. Defendant Plains GP Holdings, L.P. ("GP Holdings") is a publicly traded Delaware limited partnership with its own set of public unitholders. GP Holdings is the sole managing member of Plains All American GP LLC. Id. Plaintiffs Roger Kirby, Linda Greenberg, and Fireman's Retirement [*3]  System of St. Louis own Plains's publicly traded common units. JX 91; JX 100.3

3. Defendants assert that Plaintiffs do not have standing to obtain the books and records of GP Holdings because they are not beneficial owners of that entity. Plaintiffs in their post-trial opening brief argue that they have standing to obtain documents from Plains's "General Partner." The opening brief does not identify which entity the term "General Partner" references. Defendants respond that their standing objection relates exclusively to GP Holdings. GP Holdings is a separate entity from Plains and from Plains's general partner, PAA GP LLC. GP Holdings has its own set of public unitholders, its own ticker symbol on the New York Stock Exchange, and its own partnership agreement. Plaintiffs fail to address standing at all in their post-trial reply brief and, thus, abandon any argument that they have standing to obtain GP Holdings's books and records. Emerald P'rs v. Berlin, 726 A.2d 1215, 1224 (Del. Ch. 1999) ("Issues not briefed are deemed waived."). Plaintiffs, thus, lack standing to obtain the books and records of GP Holdings.

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2017 Del. Ch. LEXIS 847 *

In re PLAINS ALL AMERICAN PIPELINE, L.P. UNITHOLDERS BOOKS AND RECORDS LITIGATION

Notice: THIS OPINION HAS NOT BEEN RELEASED FOR PUBLICATION. UNTIL RELEASED, IT IS SUBJECT TO REVISION OR WITHDRAWAL.

CORE TERMS

documents, books and records, pipeline, general partner, confidentiality, Holdings, spill, mismanagement, credible, limited partner, investigate, oil, limited partnership agreement, opening brief, Pre-Trial, inspect, parties, limited partnership, Incorporation, stockholder, indictment, incorporate by reference, further investigation, reasonably related, board-level, derivative, post-trial, wrongdoing