Exxon Corporation v. Burglin

United States Court of Appeals for the Fifth Circuit · 1993 · Corporations

4 F.3d 1294 (5th Cir. 1993)

Updated August 22, 2026

CorporationsLimited partnershipsFiduciary dutiesChoice of lawAttorney's feesgeneral partnerlimited partnerfiduciary duty

Facts

The defendants were former limited partners in a partnership holding interests in Alaska oil and gas leases, and Exxon became general partner after acquiring that role from Chevron. The partnership agreement gave the general partner sole management authority, denied limited partners any right to confidential lease information, and provided that the general partner need not furnish information it believed should be kept confidential, though it would furnish nonconfidential information relevant to valuation. In 1989, Exxon offered to buy the limited partners' interests while Well No. 4 was still in progress and without disclosing certain information about Well No. 3, including the filing of a first-discovery statement and production-related data. The offer included a third-party evaluation option, but the limited partners accepted without using it or waiting for Well No. 4 results.

Issue

Whether Exxon, as general partner, breached fiduciary or contractual duties by failing to disclose information relevant to valuation when purchasing the limited partners' interests, despite contractual provisions allowing it to withhold confidential information. Also, whether the district court properly awarded full attorneys' fees under Texas law rather than Alaska law.

Rule

Under Alaska law, a general partner ordinarily owes fiduciary disclosure duties to limited partners, but the partnership agreement may unambiguously limit those duties. Where the agreement allows the general partner to withhold information it reasonably and in good faith believes should remain confidential, the general partner has no duty to disclose such information and does not breach implied duties of good faith and fair dealing by making a buyout offer consistent with the contract. In litigation construing a contract containing a valid choice-of-law clause, the chosen state's law also governs attorney's fees.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Aurora Basin Partners, a limited partnership owning mineral leases in Alaska, has a partnership agreement stating that Alaska law governs all rights and liabilities between the parties. After litigation is filed in federal court in Houston seeking a declaration of the parties' rights under that agreement, the prevailing general partner asks for full attorney's fees under a Texas declaratory-judgment statute.

Which law should govern the attorney's-fee issue?

Explanation. The majority held that when litigation construes a contract containing a valid choice-of-law clause, the chosen state's law governs both interpretation and attorney's fees. A Texas declaratory-judgment action does not change that result because it is only a procedural device and does not supply substantive fee rights.