In 2018, a catastrophic rupture of the recently constructed Revolution Pipeline occurred in steeply sloping terrain in Beaver County, PA, just days into a critical earnout period under a sale agreement for natural gas infrastructure. The high-pressure pipeline was part of a system sold by the plaintiff, an oil and exploration company, to the defendant, an affiliate of a large midstream pipeline operator with performance milestones linked to natural gas throughput.
The pipeline operator affiliate argued that a force majeure event, specifically, heavy rainfall from the remnants of Tropical Storm Gordon, caused the rupture relieving them of responsibility for the system’s failure. The oil and exploration company asserted that the rupture was no mere accident of nature, but rather the predictable result of negligent pipeline design and construction through a known landslide-prone area.
