PPG Industries, Inc. v. Shell Oil Co.

727 F. Supp. 285 · District Court, E.D. Louisiana · 1989

Facts

Shell and PPG had an ethylene supply contract. An explosion at Shell's Norco, Louisiana refinery caused Shell to reduce deliveries, leading PPG to sue Shell for breach of contract and negligence, and Brown & Root (maintenance contractor) for negligence, seeking economic losses.

Procedural history

PPG instituted the present suit against Shell and Brown & Root on May 2, 1989. The Court, after reviewing motions, memoranda, and arguments, granted Shell’s and Brown & Root’s motions for summary judgment.

Issue

Did Shell breach its contract by reducing ethylene deliveries, or was it excused under the contract's nonperformance clause, specifically regarding the interpretation of "or"? Additionally, were Shell or Brown & Root liable in tort for PPG's purely economic losses resulting from the explosion?

Holding

The court granted summary judgment for Shell on both the contract and tort claims, and for Brown & Root on the tort claim, dismissing all of PPG's claims with prejudice. It found Shell was excused from contract performance and neither defendant owed an independent tort duty for PPG's economic losses.

Rule

Under Texas contract law, "or" is disjunctive, meaning enumerated events excuse performance independently of a general "beyond control" clause if grammatically separated by "or". Under Louisiana and Texas tort law, a party is not liable for purely economic losses caused by a failure to perform contract obligations or by a third-party's negligence without an independent legal duty.

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Case brief last reviewed 2026-05-11. Prepared by CaseReader from the published opinion.