Pennzoil Co. v. Texaco Inc.

Supreme Court of United States
481 U.S. 1 (1987)
ELI5:

Sections

Rule of Law:

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The Legal Principle

This section distills the key legal rule established or applied by the court—the one-liner you'll want to remember for exams.

Facts:

  • Pennzoil Co. and Getty Oil Co. negotiated an agreement for Pennzoil to purchase a large portion of Getty's shares.
  • Texaco Inc. later made a higher offer and purchased the Getty shares instead of Pennzoil.
  • A Texas state jury found that Texaco had tortiously interfered with Pennzoil's contract with Getty and awarded Pennzoil over $10.5 billion in damages.
  • Under Texas law, to prevent a judgment creditor from executing on a judgment while an appeal is pending, the judgment debtor must post a supersedeas bond for at least the full amount of the judgment, interest, and costs.
  • The bond required for Texaco would have exceeded $13 billion, an amount Texaco was unable to post.
  • Failure to post the bond would permit Pennzoil to secure liens on Texaco's Texas property and begin seizing assets to satisfy the judgment, thereby threatening Texaco's financial stability before its appeal could be resolved.

Procedural Posture:

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How It Got Here

Understand the case's journey through the courts—who sued whom, what happened at trial, and why it ended up on appeal.

Issue:

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Legal Question at Stake

This section breaks down the central legal question the court had to answer, written in plain language so you can quickly grasp what's being decided.

Opinions:

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Majority, Concurrences & Dissents

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Analysis:

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Why This Case Matters

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