MEMORANDUM OPINION

GLASSCOCK, Vice Chancellor.

This matter is before me on a Motion to Dismiss. It involves a limited partner, also a controller of the general partner, which owned certain assets, upon purchase of which the partnership relies for its business growth. This controlling partner has, through a merger, effectively sold these assets to a third party. As a result, the assets will be unavailable for further transfer to the partnership. Other limited partners have sued the controlling partner alleging that it has breached fiduciary duties owed to the limited partners by taking an action, the merger, which has harmed the partnership. As evidence of harm, the limited partners point to a drop in the trading price of partnership units contemporaneous with the announcement of the merger. If these allegations are true, is the controlling partner liable?

Under the circumstances here, which include an explicit waiver of any fiduciary duties owed by the controlling and general partners to the limited partners, a partnership agreement that allows the controlling partner to engage in business activities "to the exclusion of the [p]artnership,"1 and a prospectus that declares that the controlling partner has no contractual duty to sell any assets to the partnership, I find that the Plaintiff limited partners have failed to state a viable claim for relief.

I. BACKGROUND

The facts below are taken from the Amended Verified Class Action and Derivative Complaint.

A. Parties

Plaintiffs HITE Hedge LP, HITE MLP LP, and Sealedge Partners, LLC, are common unitholders of El Paso Pipeline Partners, L.P. ("EPB"), a master limited partnership ("MLP"). Limited-partnership interests in an MLP are publicly-traded "units," and EPB's owners are known as "unitholders."2 The Plaintiffs bring this class action and derivative complaint on behalf of themselves and all other similarly situated common unitholders.

Nominal Defendant EPB is a Delaware MLP formed in 2007 by El Paso Corporation ("El Paso") for the purpose of owning and operating natural gas transportation pipelines, storage, and related assets.3 Defendants Juan Carlos Braniff, David W. Crane, Douglas L. Foshee, Robert W. Goldman, Anthony W. Hall, Jr., Thomas R. Hix, Ferrell F. McClean, Timothy J. Prober, Steven J. Shapiro, J. Michael Talbert, Robert F. Vagt, and John L. Whitmire are members of El Paso's Board of Directors (collectively, the "Individual Defendants").4

B. EPB and the Business of Master Limited Partnerships

Like traditional limited partnerships, MLPs have limited partners, "unitholders," who provide capital, and a general partner, who manages the partnership's affairs.5 MLPs are distinct from traditional limited partnerships in that they are publicly traded.6 U.S. law limits the application of MLP status to enterprises engaging in certain businesses.7 Most MLPs engage in the transportation and storage of natural resources such as petroleum products and natural gas.8

An historic growth strategy for MLPs has been the acquisition of new energy assets through "drop down" transactions from a parent or affiliated company.9 "Drop downs" are the sale, often at favorable prices, of pipeline and related assets from a sponsor or parent company to an affiliated MLP.10 Dropping down assets to an MLP allows the parent company to raise immediate capital and gain tax advantages due to the pass-through tax treatment of the partnership.11 Limited partners—unitholders in the MLP—receive a return through periodic distributions that are a function of the operations of the pipelines and other assets owned by the MLP.

EPB followed this business model as El Paso's MLP. As stated in the prospectus for the public offering of EPB and other related documents, the main business objectives for the formation of EPB was to acquire assets through drop downs from El Paso.12 Thus, EPB's business growth was dependent upon continued drop downs from El Paso of pipeline and related assets.13 Although EPB's revenue stream would continue in the absence of additional drop downs, its revenue and distributions to investors would not increase.14 As the prospectus and the EPB's limited partnership agreement ("LPA") clearly indicate, however, El Paso has no legal obligation to continue the drop downs.15

C. The Kinder Morgan Merger

On or about October 16, 2011, El Paso and Kinder Morgan, Inc. ("Kinder Morgan") announced an agreement and plan of merger.16 Under this plan, Kinder Morgan merged with El Paso, leaving Kinder Morgan as the surviving entity ("New Kinder Morgan"). The merger price represented a substantial premium over the market price of El Paso's shares,17 making the deal attractive to El Paso stockholders.18 The deal was not good news, however, for EPB unitholders. Kinder Morgan possesses its own MLP, Kinder Morgan Partners, L.P. ("KMP").19 At the time of the merger, El Paso indicated its expectation that, over the next several years, KMP would purchase a significant portion of New Kinder Morgan's pipeline assets.20 In other words, drop downs that would have previously been offered to EPB will now be sold to KMP, instead.

By the close of trading on December 5, 2011, the market price of EPB units had declined by more than 15% since trading commenced after the announcement of the merger.21 The Plaintiffs contend that this drop in market value reflects the decreased likelihood of future drop downs from New Kinder Morgan to EPB.

D. Procedural History

The Plaintiffs filed this claim asserting a direct claim for breach of fiduciary duty against El Paso, alleging that El Paso breached its duties as the controlling unitholder of EPB. The Plaintiffs allege, and I accept for purposes of this Motion, that as a result of this merger, New Kinder Morgan will cease or significantly curtail drop-downs to EPB, opting instead to transact with its own MLP. Essentially, the Plaintiffs argue that El Paso, as a controller of EPB, had a duty to represent, or at least account for, the interests of EPB's minority unitholders in its merger negotiations with Kinder Morgan. The Plaintiffs contend that in agreeing to a merger that will likely result in reduced drop downs to EPB, El Paso has extracted value from EPB at the expense of the minority unitholders and for its own benefit, namely, increased merger consideration. El Paso has moved to dismiss the Complaint.

Motion to Dismiss Standard

The path to dismissal is well-worn. In evaluating a motion to dismiss under Court of Chancery Rule 12(b)(6), this Court accepts as true all well-pleaded allegations in the complaint, accepts as "well-pleaded" even vague allegations so long as they put the defendant on notice of the claim, draws all reasonable inferences in the plaintiff's favor, and grants the motion only if the plaintiff would not be entitled to relief under any reasonably conceivable set of circumstances.22

Analysis

As a preliminary matter, I assume for purposes of this Motion, without deciding, that El Paso is a controller of EPB. Despite this assumption, I find multiple independent grounds for granting El Paso's Motion to Dismiss.

First, the Partnership Agreement, in plain and unambiguous terms, expressly eliminates any fiduciary duties owed by El Paso to EPB's minority unitholders.23 The Delaware Revised Uniform Limited Partnership Act, DRULPA, permits the elimination of fiduciary duties by contract where the intent to do so is explicit.24 Section 7.9(e) of the Partnership Agreement does so, and the language is explicit:

"Indemnitee" is a defined term and expressly extends to affiliates of the General Partner, which includes El Paso.26

The Plaintiffs' response to this seemingly insurmountable language is that while the Partnership Agreement modifies or eliminates fiduciary duties owed to EPB, it does not curtail those owed to minority unitholders by the controlling unitholder, El Paso, which are grounded in common law. This argument finds no support in the plain language of Section 7.9(e), which provides that an Indemnitee shall have no fiduciary duties to "any Limited Partner," and that the only duties owed are those created by the Agreement itself.27 The Plaintiffs have not alleged that El Paso has breached a contractual provision. Therefore, the Plaintiffs have failed to state a claim for breach of fiduciary duty.

For the purposes of this Motion to Dismiss, it is sufficient that I find that the Partnership Agreement eliminates any fiduciary duties El Paso might otherwise owe to the limited partners, the minority unitholders, whose remedies, if any, are reliant on the Partnership Agreement, not the common law. For the sake of completeness, however, I address additional grounds that support granting the Motion to Dismiss. First, a controller cannot be liable for breaching fiduciary duties owed to minority holders unless it uses its control to direct the actions of the entity it controls against the interests of that minority.28 That is the key premise of controller liability. The Plaintiffs do not allege that El Paso used its control over EPB to harm the minority unitholders. Nor do the Plaintiffs allege that El Paso controlled the General Partner in a way that resulted in the approval of the Kinder Morgan merger. Rather, the Plaintiffs argue that El Paso was bound as a controller by fiduciary duties that prevented it from entering a merger transaction—in which EPB and the minority unitholders had no involvement—that might work a disadvantage to the minority holders. This argument finds no support under Delaware law and is directly contradicted by the Partnership Agreement itself, which expressly permits El Paso to compete with EPB and disclaims liability under the corporate opportunity doctrine.29

I note that the harm alleged here—New Kinder Morgan's withholding of drop downs from EPB—is completely divorced from El Paso's role as controlling partner; the alleged harm derives solely from El Paso's control, not over the Partnership, but over its own assets. In other words, El Paso has the same ability to determine whether it drops down its assets regardless of whether or not it controls the General Partner. The harm here results from El Paso's entry into a transaction that makes the drop down of its assets less likely. That transaction simply does not involve El Paso's duties as a controller.

Moreover, even if El Paso had acted as a controller, it has not "extracted value" from the Partnership or the minority unitholders, as the Plaintiffs contend.30 A predicate of the Plaintiffs' purported right against this "extraction" is the right to the continuance of the drop-down transactions. Nothing in the Partnership Agreement grants the Plaintiffs or the minority holders this right. In fact, the Prospectus itself, although stating that EPB relies on drop-down transactions from El Paso for growth, expressly informs investors that El Paso has no obligation to continue the drop-down transactions. At most, there has been a withholding of transactions to which EPB had no legal right, and thus no "extraction" has taken place.

Conclusion

For the foregoing reasons, the Defendants Motion to Dismiss is granted. The Defendant should provide a form of order implementing this ruling.