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Commitments and Contingencies
6 Months Ended
Jun. 30, 2011
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies
Note 14.  Commitments and Contingencies

Litigation

As part of our normal business activities, we may be named as defendants in legal proceedings, including those arising from regulatory and environmental matters.  Although we are insured against various risks to the extent we believe it is prudent, there is no assurance that the nature and amount of such insurance will be adequate, in every case, to fully indemnify us against losses arising from future legal proceedings.

Management has regular quarterly litigation reviews, including updates from legal counsel, to assess the possible need for accounting recognition or disclosure of these contingencies.  We accrue an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated.  If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued.  We do not record a contingent liability when the likelihood of loss is probable but the amount cannot be reasonably estimated or when it is believed to be only reasonably possible or remote.  For contingencies where an unfavorable outcome is reasonably possible and the impact would be material, we disclose the nature of the contingency and, where feasible, an estimate of the possible loss or range of loss.  We will vigorously defend the partnership in litigation matters.  Based on a consideration of all relevant known facts and circumstances (including insurance coverage), we do not believe the ultimate outcome of any currently pending lawsuit against us will have a material impact on our financial statements individually or in the aggregate.  See Note 15 for information regarding our insurance program.

At June 30, 2011 and December 31, 2010, litigation accruals on an undiscounted basis of $8.5 million and $8.6 million, respectively, were recorded in our consolidated balance sheets as a component of other current liabilities.  Our evaluation of litigation contingencies is based on the facts and circumstances of each case and predicting the outcome of these matters involves substantial uncertainties.  In the event the assumptions we use to evaluate these matters change in future periods or new information becomes available, we may be required to record additional accruals.  In an effort to mitigate expenses associated with litigation, we may settle legal proceedings out of court.

Merger-Related Matters

We have completed a number of merger-related transactions in recent years that were material to our financial statements.  Our proposed merger with Duncan Energy Partners is pending.  The following discussion of litigation matters relates to these merger transactions.  We do not believe that any expenditures related to such matters will be material to our financial statements.  We will continue to vigorously defend the partnership in these matters.

Litigation Related to Holdings Acquisition of Ownership Interests in TEPPCO and TEPPCO GP.  On February 14, 2008, Joel A. Gerber, then a purported unitholder of Holdings, filed a derivative complaint on behalf of Holdings in the Court of Chancery of the State of Delaware.  The complaint names as defendants EPE Holdings, the Board of Directors of EPE Holdings, EPCO, and Dan L. Duncan and certain of his affiliates.  Holdings is named as a nominal defendant.  The complaint alleges that the defendants, in breach of their fiduciary duties to Holdings and its unitholders, caused Holdings to purchase in May 2007 the TEPPCO GP membership interests and TEPPCO units from Mr. Duncan's affiliates at an unfair price.  The complaint also alleges that Charles E. McMahen, Edwin E. Smith and Thurmon Andress, then constituting the three members of EPE Holdings' Audit, Conflicts and Governance (“ACG”) Committee, cannot be considered independent because of their relationships with Mr. Duncan.  The complaint seeks relief (i) awarding damages for profits allegedly obtained by the defendants as a result of the alleged wrongdoings in the complaint and (ii) awarding plaintiff costs of the action, including fees and expenses of his attorneys and experts.  Management believes this lawsuit is without merit and intends to vigorously defend against it.  On April 11, 2008, we filed a motion to dismiss this lawsuit with the Court of Chancery of the State of Delaware.  In response to the motion to dismiss, on September 15, 2008, the plaintiff filed an amended complaint.  On September 29, 2008, we filed a motion to dismiss the amended complaint with the Court of Chancery of the State of Delaware. The parties completed the briefing on the motion to dismiss on June 4, 2010.  On February 8, 2011, the plaintiff filed a Motion for Leave to File a Second Amended and Supplemental Verified Complaint.  On March 25, 2011, we filed a Brief in Opposition to Plaintiff's Motion for Leave to File a Second Amended and Supplemental Verified Complaint.  See Note 12 for information regarding our relationship with EPCO and its affiliates.

Litigation Related to the TEPPCO Merger.  On November 15, 2010, Joel A. Gerber filed a class action and derivative complaint in the Court of Chancery of the State of Delaware.  The complaint asserts claims against Holdings, EPGP, EPCO and the then directors of EPE Holdings for breach of express and implied duties in connection with Holdings' sale of TEPPCO GP to us in October 2009 (the “2009 Sale Transaction”) and the Holdings Merger in November 2010.  The complaint also asserts claims against Mr. Duncan's estate, EPCO and us for tortious interference and unjust enrichment in connection with the above transactions.  The complaint alleges that Holdings sold TEPPCO GP to us in the 2009 Sale Transaction at an unfair price to Holdings and that the members of EPE Holdings' ACG Committee, which approved the 2009 Sale Transaction, were not independent because of their relationship with Mr. Duncan.  The complaint also alleges that the terms of the Holdings Merger were unfair to Holdings' unitholders and that members of EPE Holdings' ACG committee, which approved the Holdings Merger, were not independent because of their relationship with Mr. Duncan.  On December 13, 2010, we filed a motion to dismiss this lawsuit with the Court of Chancery of the State of Delaware.  In response to the motion to dismiss, on March 18, 2011, the plaintiff filed an amended complaint.  On April 1, 2011, we filed a motion to dismiss the amended complaint with the Court of Chancery of the State of Delaware.

Litigation Related to Holdings Merger. On September 9, 2010, Sanjay Israni, a purported unitholder of Holdings, filed a complaint in the Court of Chancery of the State of Delaware, as a putative class action on behalf of the unitholders of Holdings, captioned Sanjay Israni v. EPE Holdings LLC, Enterprise GP Holdings L.P., Enterprise Products Company, Enterprise Products Partners L.P., Oscar S. Andras, Ralph S. Cunningham, Richard H. Bachmann, Randa Duncan Williams, Thurmon M. Andress, Charles E. McMahen, Edwin E. Smith and B.W. Waycaster (the “Israni Complaint”).  The Israni Complaint alleges, among other things, that we along with the named directors and EPCO have breached fiduciary duties in connection with the Holdings Merger (see Note 1) and that Holdings aided and abetted in these alleged breaches of fiduciary duties.  On October 18, 2010, we filed a motion to dismiss this lawsuit with the Court of Chancery of the State of Delaware.  On March 18, 2011, the plaintiffs filed a Stipulation and Proposed Order of Dismissal of all claims pending in that action without prejudice, with each party to bear its own costs and fees.  The Court granted the Stipulation and Proposed Order of Dismissal on March 18, 2011.

On September 29, 2010, Eugene Lonergan, Sr., a purported unitholder of Holdings, filed a complaint in the Court of Chancery of the State of Delaware, as a putative class action on behalf of the unitholders of Holdings, captioned Eugene Lonergan, Sr. v.EPE Holdings LLC, Enterprise GP Holdings L.P., Oscar S. Andras, Ralph S. Cunningham, Richard H. Bachmann, Randa Duncan Williams, Thurmon M. Andress, Charles E. McMahen, Edwin E. Smith and B.W. Waycaster (the “Lonergan Complaint”).  The Lonergan Complaint alleges that the named directors and EPE Holdings breached the implied contractual covenant of good faith and fair dealing, including failing to make adequate disclosures, in connection with the Holdings Merger.  On October 8, 2010, the Court of Chancery of the State of Delaware held a hearing on a motion by the plaintiff to expedite the proceedings.  On October 11, 2010, the motion was denied.  On October 18, 2010, we filed a motion to dismiss this lawsuit with the Court of Chancery of the State of Delaware.  On March 18, 2011, the plaintiffs filed a Stipulation and Proposed Order of Dismissal of all claims pending in that action without prejudice, with each party to bear its own costs and fees.  The Court granted the Stipulation and Proposed Order of Dismissal on March 18, 2011.

Additionally, on September 23, 2010, Richard Fouke, a purported unitholder of Holdings, filed a complaint in the Court of Chancery of the State of Delaware, as a putative class action on behalf of the unitholders of Holdings, captioned Richard Fouke v. EPE Holdings LLC, Enterprise GP Holdings L.P., Enterprise Products Company, Enterprise Products Partners L.P., Enterprise Products GP, LLC, Oscar S. Andras, Ralph S. Cunningham, Richard H. Bachmann, Randa Duncan Williams, Thurmon M. Andress, Charles E. McMahen, Edwin E. Smith and B.W. Waycaster (the “Fouke Complaint”).  The Fouke Complaint alleges, among other things, that we, along with the named directors, EPE Holdings, EPGP and EPCO breached the implied contractual covenant of good faith and fair dealing in connection with the Holdings Merger and that Holdings and the other defendants aided and abetted in the alleged breach.  On October 18, 2010, we filed a motion to dismiss this lawsuit with the Court of Chancery of the State of Delaware.  On July 12, 2011, the Court of Chancery entered stipulation and order of dismissal of the Fouke Complaint filed by the parties dismissing the claims without prejudice.

Litigation Related to the Duncan Merger.  On March 8, 2011, Michael Crowley, a purported unitholder of Duncan Energy Partners, filed a complaint in the Court of Chancery of the State of Delaware, as a putative class action on behalf of the public unitholders of Duncan Energy Partners, captioned Michael Crowley v. Duncan Energy Partners L.P., DEP Holdings, LLC, W. Randall Fowler, Bryan F. Bulawa, William A. Bruckmann, III, Larry J. Casey, Richard S. Snell, Enterprise Products Partners L.P., Enterprise Products Holdings LLC, and Enterprise Products Operating LLC (the “Crowley Complaint”).  The Crowley Complaint alleges, among other things, that the named directors of DEP GP have breached fiduciary duties in connection with our proposal to acquire the outstanding publicly held common units of Duncan Energy Partners, that Duncan Energy Partners and DEP GP aided and abetted in these alleged breaches of fiduciary duties and that we, as the majority and controlling unitholder, along with EPO, have breached fiduciary duties by not acting in the minority unitholders' best interest to ensure the transaction resulting from our proposal is entirely fair.

On March 11, 2011, Sanjay Israni, a purported unitholder of Duncan Energy Partners, filed a complaint in the Court of Chancery of the State of Delaware, as a putative class action on behalf of the public unitholders of Duncan Energy Partners, captioned Sanjay Israni v. Duncan Energy Partners L.P., DEP Holdings, LLC, Enterprise Products Partners L.P., Enterprise Product Holdings LLC, Enterprise Production Operating LLC, W. Randall Fowler, Bryan F. Bulawa, William A. Bruckmann, III, Larry J. Casey, and Richard S. Snell (the “Israni Complaint II”).  The Israni Complaint II alleges, among other things, that the named directors of DEP GP have breached fiduciary duties in connection with our proposal to acquire the outstanding publicly held common units of Duncan Energy Partners and that we, along with all of the other named defendants aided and abetted in these alleged breaches of fiduciary duties.

On March 28, 2011, Michael Rubin, a purported unitholder of Duncan Energy Partners, filed a complaint in the Court of Chancery of the State of Delaware, as a putative class action on behalf of the public unitholders of Duncan Energy Partners, captioned Michael Rubin v. Duncan Energy Partners L.P., DEP Holdings, LLC, W. Randall Fowler, Bryan F. Bulawa, William A. Bruckmann, III, Larry J. Casey, Richard S. Snell, Enterprise Products Partners L.P., Enterprise Products Holdings LLC, and Enterprise Products Operating LLC (the “Rubin Complaint”).  The Rubin Complaint alleges, among other things, that the named directors of DEP GP have breached fiduciary duties in connection with our proposal to acquire the outstanding publicly held common units of Duncan Energy Partners, that Duncan Energy Partners and DEP GP aided and abetted in these alleged breaches of fiduciary duties and that we, as the majority and controlling unitholder, along with EPO, have breached fiduciary duties by not acting in the best interests of the minority unitholders to ensure the transaction resulting from our proposal is entirely fair.

On April 5, 2011, the plaintiffs in the Crowley Complaint, the Israni Complaint II, and the Rubin Complaint filed a Proposed Order of Consolidation and Appointment of Lead Counsel in the Court of Chancery of the State of Delaware. The court granted that order on the same day consolidating the three actions into a single consolidated action, captioned In re Duncan Energy Partners L.P. Unitholders Litigation.  On June 3, 2011 the Delaware plaintiffs filed a consolidated amended complaint which alleges, among other things, breach of express and implied contractual duties contained in Duncan Energy Partners' partnership agreement by DEP GP and the named directors of DEP GP and that all defendants have aided and abetted these alleged breaches. The consolidated amended complaint also alleges that the defendants failed to provide full and fair disclosures regarding the proposed transaction.

 On March 7, 2011, Merle Davis, a purported unitholder of Duncan Energy Partners, filed a petition in the 269th District Court of Harris County, Texas, as a putative class action on behalf of the unitholders of Duncan Energy Partners, captioned Merle Davis, on Behalf of Himself and All Others Similarly Situated v. Duncan Energy Partners L.P., W. Randall Fowler, Bryan F. Bulawa, William A. Bruckmann, III, Larry J. Casey, Richard S. Snell, DEP Holdings, LLC, and Enterprise Products Partners L.P. (the “Davis Petition”).  The Davis Petition alleges, among other things, that we and the named directors of DEP GP have breached fiduciary duties in connection with our proposal to acquire the outstanding publicly held common units of Duncan Energy Partners and that we and Duncan Energy Partners aided and abetted in these alleged breaches of fiduciary duties.

On March 9, 2011, Donald Weilersbacher, a purported unitholder of Duncan Energy Partners, filed a petition in the 334th District Court of Harris County, Texas, as a putative class action on behalf of the unitholders of Duncan Energy Partners, captioned Donald Weilersbacher, on Behalf of Himself and All Others Similarly Situated v. Duncan Energy Partners L.P., Enterprise Products Partners L.P., DEP Holdings, LLC, W. Randall Fowler, Bryan F. Bulawa, William A. Bruckmann, III, Larry J. Casey, and Richard S. Snell (the “Weilersbacher Petition”).  The Weilersbacher Petition alleges, among other things, that the named directors of DEP GP have breached fiduciary duties in connection with our proposal to acquire the outstanding publicly held common units of Duncan Energy Partners and that we aided and abetted in these alleged breaches of fiduciary duties.

On March 17, 2011, the plaintiffs in the Davis Petition and the Weilersbacher Petition filed a motion and proposed Order for Consolidation of Related Actions, Appointment of Interim Co-Lead Counsel, and Order Compelling Limited Expedited Discovery.  Plaintiffs and defendants subsequently agreed to postpone discovery until after the plaintiffs file a consolidated petition.  On March 28, 2011, the plaintiffs filed an amended motion and proposed Order for Consolidation of Related Actions and Appointment of Interim Co-Lead Counsel.   On May 4, 2011, the court entered an order consolidating the cases and appointing interim lead counsel.  On May 11, 2011, plaintiffs filed their consolidated petition.  On June 23, 2011, the plaintiffs filed a Notice of Nonsuit Without Prejudice and the cases were dismissed without prejudice.

On July 5, 2011, Merle Davis and Donald Weilersbacher, purported unitholders of Duncan Energy Partners, filed a complaint  in the United States District Court of the Southern District of Texas, Houston Division, as a putative class action on behalf of the unitholders of Duncan Energy Partners, captioned Merle Davis and Donald Weilersbacher, on Behalf of Themselves and All Others Similarly Situated vs. Duncan Energy Partners, L.P., W. Randall Fowler, Bryan F. Bulawa, William A. Bruckmann, III, Larry J. Casey, Richard Snell, DEP Holdings, LLC, and Enterprise Products Partners L.P. (the “Davis/Weilersbacher Federal Complaint”).  The Davis/Weilersbacher Federal Complaint alleged, among other things, that Duncan Energy Partners, DEP GP and the named directors of DEP GP breached express and implied contractual duties in connection with our proposal to acquire Duncan Energy Partners' outstanding publicly held common units, that all defendants aided and abetted in these alleged breaches, and that we and Duncan Energy Partners violated Section 14(a) and Section 20(a) of the Exchange Act.
 
On August 3, 2011, John Rinker and Arthur H. Speier, purported unitholders of Duncan Energy Partners, filed a complaint in the United States District Court of the Southern District of Texas, Houston Division, as a putative class action on behalf of the unitholders of Duncan Energy Partners, captioned  John Rinker and Arthur H. Speier, on Behalf of Themselves and All Others Similarly Situated v. Duncan Energy Partners L.P., DEP Holdings, LLC, W. Randall Fowler, Bryan F. Bulawa, William A. Bruckmann, III, Larry J. Casey, Richard S. Snell and Enterprise Products Partners L.P. The Rinker/Speier complaint alleges, among other things, that Duncan Energy Partners, DEP GP and the named directors of DEP GP breached express and implied contractual duties in connection with our proposal to acquire Duncan Energy Partners' outstanding publicly held common units, that all defendants aided and abetted in these alleged breaches, and that we and Duncan Energy Partners violated Section 14(a) and Section 20(a) of the Exchange Act.
 
Environmental-Related Matters

On occasion, we are assessed monetary sanctions by governmental authorities related to administrative or judicial proceedings involving environmental matters.  The following is a discussion of such matters where the amount of monetary sanctions sought is in excess of $0.1 million.  We do not believe that any expenditures related to such matters will be material to our financial statements.
 
               On March 29, 2007, a third party struck the West Red Line of our Mid-America Pipeline (“MAPL”) releasing 1,725 barrels of natural gasoline.  MAPL and EPO received letters dated June 4, 2009, from the U.S. Department of Justice (“DOJ”) informing them that the DOJ desired to discuss violations of the federal Clean Water Act related to the release and potential settlement of the alleged violations.  We have begun discussions with the DOJ and believe that the eventual resolution of this matter will result in a civil penalty exceeding $0.1 million.
 
On April 23, 2010, the West Red Line of MAPL ruptured as a result of historical external, mechanical damage to the pipeline releasing 1,669 barrels of natural gasoline.  We have begun discussions with the DOJ and believe that the eventual resolution of this matter will result in a civil penalty exceeding $0.1 million.

               While our discussions with the DOJ are still at a preliminary stage, we do not believe that any potential payment we make in connection with these releases will have a material impact on our consolidated financial position, results of operations or cash flows.
 
Redelivery Commitments

We store natural gas, NGLs and petrochemicals under various agreements that are owned by third parties.  Under the terms of these agreements, we are generally required to redeliver volumes to the owner on demand.  At June 30, 2011, we had approximately 23.4 MMBbls of NGL and petrochemical products and 14.3 trillion British thermal units of natural gas in our custody that were owned by third parties.  We maintain insurance coverage related to such volumes that we believe is consistent with our exposure.  See Note 15 for information regarding insurance matters.
 
Regulatory Matters

Responding to scientific reports regarding threats posed by global warming, the U.S. Congress has considered legislation to reduce emissions of greenhouse gases.  In addition, some states, including states in which our facilities or operations are located such as California and New Mexico, have individually or in regional cooperation, imposed restrictions on greenhouse gas emissions under various policies and approaches, including establishing a cap on emissions, requiring efficiency measures, or providing incentives for pollution reduction, use of renewable energy, or use of fuels with lower carbon content.

The U.S. Environmental Protection Agency (“EPA”) has taken action under the federal Clean Air Act (“CAA”) to regulate greenhouse gas emissions.  In November 2010, the EPA finalized rules expanding its Mandatory Greenhouse Gas Reporting Rule, originally promulgated in October 2009, to be applicable to the oil and natural gas industry, including certain onshore oil and natural gas production activities, which may affect certain of our existing or future operations and require the inventory and reporting of emissions.  In addition, the EPA has taken the position that existing CAA provisions require an assessment of greenhouse gas emissions within the permitting process for certain large new or modified stationary sources under the EPA's Prevention of Significant Deterioration and Title V permit programs beginning in 2011.  Facilities triggering permit requirements may be required to reduce greenhouse gas emissions consistent with “best available control technology” standards if deemed to be cost-effective.

These or other federal, regional and state measures could increase the operating and compliance costs of our pipelines, natural gas processing plants, fractionation plants and other facilities, and could by affecting the price of, or reducing the demand for, fossil fuels or providing competitive advantages to competing fuels and energy sources, adversely affect market demand or pricing for our products or products served by our midstream infrastructure.  In addition, there have been several court cases implicating greenhouse gas emissions and climate change issues that could establish precedent that may indirectly affect our business, customers or the energy sector generally.

Any of these climate change legislative or judicial initiatives or developments could have a material impact on our financial statements; however, we are unable to provide a range of estimated future costs due to the extreme uncertainty of such matters.  There is considerable public and private debate over global warming and the environmental effects of greenhouse gas emissions.

Contractual Obligations

Scheduled Maturities of Long-Term Debt

With the exception of (i) routine fluctuations in the balance of our consolidated revolving credit facilities, (ii) the issuance of Senior Notes AA and BB in January 2011 and (iii) the repayment of Senior Notes B in February 2011, there have been no significant changes in our consolidated debt obligations since those reported in our 2010 Form 10-K.  See Note 9 for additional information regarding our consolidated debt obligations.

Operating Lease Obligations

Lease and rental expense included in costs and expenses was $21.5 million and $15.9 million during the three months ended June 30, 2011 and 2010, respectively.  For the six months ended June 30, 2011 and 2010, lease and rental expense was $42.0 million and $32.3 million, respectively.  There have been no material changes in our operating lease commitments since those reported in our 2010 Form 10-K.

Purchase Obligations

There have been no material changes in our consolidated purchase obligations since those reported in our 2010 Form 10-K. 
 
Other Claims

As part of our normal business activities with joint venture partners and certain customers and suppliers, we occasionally make claims against such parties or have claims made against us as a result of disputes related to contractual agreements or similar arrangements.  As of June 30, 2011, our contingent claims against such parties were approximately $109.2 million and claims against us were approximately $100.9 million.  These matters are in various stages of assessment and the ultimate outcome of such disputes cannot be reasonably estimated at this time; however, in our opinion, the likelihood of a material impact on our consolidated financial statements from such disputes is remote.  Accordingly, accruals for loss contingencies related to these matters have not been reflected in our consolidated financial statements.

Centennial Guarantees

We have certain guarantee obligations in connection with our ownership interest in Centennial, which owns a refined products pipeline system that extends from the Texas Gulf Coast to central Illinois.  We guaranteed one-half of Centennial's debt obligations, which obligates us to an estimated payment of $53.2 million in the event of a default by Centennial.  As of June 30, 2011, we have a recorded liability of $7.5 million representing the estimated fair value of our share of the Centennial debt guaranty.

In lieu of Centennial procuring insurance to satisfy third-party claims arising from a catastrophic event, we and Centennial's other joint venture partner have entered a limited cash call agreement.  We are obligated to contribute up to a maximum of $50.0 million (in proportion to our 50% ownership interest in Centennial) in the event of a catastrophic event.  At June 30, 2011, we have a recorded liability of $3.2 million representing the estimated fair value of our cash call guaranty.  Our cash contributions to Centennial under the agreement may be covered by our other insurance policies depending on the nature of the catastrophic event.