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Pennzoil Company v. Texaco, Inc.
United States Supreme Court
481 U.S. 1 (1987)
Despite an agreement between Pennzoil Company (Pennzoil) (defendant) and Getty Oil (Getty) for Pennzoil to purchase 40 percent of Getty’s shares, Getty sold the shares to Texaco, Inc. (Texaco) (plaintiff). Pennzoil, which was headquartered in Texas, sued Texaco, which was headquartered in New York, in a Texas state court, claiming that Texaco tortiously induced Getty to break its contract with Pennzoil. A jury found in Pennzoil’s favor, and the court entered a judgment of more than $11 billion. The day before entry of the judgment, Texaco sued Pennzoil in a federal district court in New York pursuant to 42 U.S.C. § 1983, contending that the Texas judgment procedure violated its constitutional rights. Under Texas law, Texaco could suspend the judgment’s execution by filing a supersedeas bond for $13 billion, but filing the bond would not prevent Pennzoil from obtaining liens on Texaco’s property. Without enough funds to post bond, Texaco’s stock dropped significantly, its ability to obtain credit weakened, and its bond rating fell. The district court issued a preliminary injunction preventing Pennzoil from enforcing the judgment, and the United States Court of Appeals for the Second Circuit affirmed. Pennzoil sought review in the United States Supreme Court.
Rule of Law
Holding and Reasoning (Powell, J.)
Concurrence (Stevens, J.)
Concurrence (Blackmun, J.)
Concurrence (Marshall, J.)
Concurrence (Brennan, J.)
Concurrence (Scalia, J.)
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