Cyanco International, LLC v. Minerales de Occidente, S.A. de C.V.
4:23-cv-03713
S.D. Tex.Mar 11, 2025Background:
- Cyanco International, LLC (Cyanco), a sodium cyanide supplier, entered into a sales agreement with Minerales De Occidente, S.A. De C.V. (Minosa), a gold mining operator in Honduras, requiring Minosa to purchase all sodium cyanide needs from Cyanco through 2026.
- The contract mandated that both parties maintain all necessary licenses and permits, including Cyanco maintaining a valid U.S. export license for shipping sodium cyanide to Honduras.
- Cyanco initially obtained an export license with an 8,000 metric ton limit but shipped a total of 10,640 metric tons to Minosa, exceeding the license.
- Upon discovering the over-shipment, Minosa notified Cyanco of a material breach and subsequently terminated the contract after Cyanco did not respond or cure within 30 days.
- Cyanco sued Minosa for breach of contract, seeking over $24 million in damages; Minosa countered by seeking declaratory judgment justifying termination due to Cyanco’s license lapse.
- The court reconsidered and ultimately granted summary judgment for Minosa, finding Cyanco’s breach was material and incurable because it violated federal export regulations.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Cyanco breached by not maintaining a valid export license | Cyanco maintained/quickly cured license; breach was not material | Cyanco materially breached by over-shipment beyond license, violating federal law | Cyanco materially breached contract; license violation was incurable |
| Whether Minosa could terminate the contract | Minosa lacked justification; breach was not material | Breach allowed contract termination under law and contract terms | Minosa validly terminated contract after breach |
| Whether Cyanco had an opportunity to cure breach | Cyanco was entitled to cure by contract and did so by getting new license | Breach was incurable, as violation of law cannot be retroactively cured | Court: Breach was incurable; late cure insufficient |
| Whether Minosa breached or repudiated the contract | Minosa wrongfully terminated, thus breached | Minosa’s termination was justified and not repudiation | Minosa did not breach or repudiate; termination justified |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment burden shifting standard)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (standard for nonmovant's summary judgment burden)
- Liberty Lobby, Inc. v. Anderson, 477 U.S. 242 (standard for genuine dispute of material fact)
- Big Three Welding Equip. Co. v. Crutcher, Rolfs, Cummings, Inc., 229 S.W.2d 600 (Texas definition of "maintain" in contract context)
