Background: Alaska Joint Operating Agreement and Bankruptcy Restructuring

The Davis Parties—mineral developers specializing in oil and gas lease acquisition—identified development opportunities in Alaska's Cook Inlet Basin, specifically the Kitchen Lights Unit. To finance operations, they entered into a Joint Operating Agreement and Lease Assignment and Participation Agreement (LAPA) in 2010 with entities that later became Furie Operating Alaska, LLC and appellant Cornucopia Oil and Gas, LLC, conveying a 79% working interest to the operators. Following Furie's bankruptcy several years later, the parties executed a Settlement Agreement that included two critical documents: an Assignment (signed only by the Davis Parties and Furie) and an Amended Joint Operating Agreement (signed by all parties including Cornucopia).

The Jurisdictional Conflict: Forum-Selection Clause Incorporation

The Assignment contained a forum-selection clause consenting to jurisdiction in Harris County, Texas for "any dispute or disagreement arising under or relating to this Agreement." Critically, the Amended JOA included express language stating: "Each party hereto agrees and acknowledges that this Agreement is subject to the Assignment effective as of July 1, 2020 ... In the event of any conflict between this Agreement and the Assignment, the Assignment Agreement shall control." When the Davis Parties sued in Harris County alleging breaches of contract including charging Prohibited Expenses against carried interests and failing to assign proportionate lease interests, Cornucopia filed a special appearance arguing it never signed the Assignment and therefore never consented to Texas jurisdiction.

The Court's Analysis: Contractual Consent to Jurisdiction

The Fourteenth Court of Appeals affirmed the trial court's denial of the special appearance, holding that Cornucopia's execution of the Amended JOA bound it to the Assignment's forum-selection clause. The court applied the principle that if a party contractually consents to jurisdiction in a particular forum, then the due-process and minimum-contacts analysis is unnecessary. The court emphasized that neither party contested the contract language was ambiguous, making interpretation a question of law reviewed de novo. By signing the Amended JOA with its express subordination language, Cornucopia agreed to be bound by the Assignment's terms, including its Texas forum-selection clause.

Implications for Joint Operating Agreements and Forum Selection

This decision carries significant implications for operators and working interest owners negotiating complex, multi-document transactions in oil and gas development. The court's willingness to bind a non-signatory to a forum-selection clause through express incorporation language demonstrates the importance of carefully reviewing subordination and conflict-resolution provisions across all transaction documents. Operators cannot avoid forum-selection clauses in agreements they did not sign if they execute related agreements that explicitly incorporate those terms and establish a hierarchy among the documents. Parties negotiating joint operating agreements following bankruptcy restructurings should pay particular attention to language making one agreement "subject to" another, as such provisions may have far-reaching jurisdictional consequences beyond the substantive business terms being negotiated.