Great Lakes Gas Transmission Ltd. Partnership v. Essar Steel Minnesota, LLC
871 F. Supp. 2d 843
D. Minnesota2012Background
- Great Lakes sued ESML and related Essar entities for breach of contract over a TSA for transporting natural gas (2009–2024 term).
- ESML counterclaimed seeking declaratory relief excusing performance due to force majeure and impediments to financing for the Nashwauk steel facility, plus a conversion claim arising from drawing on a Letter of Credit.
- TransCanada entities were dismissed from the case as moot; the dispute now centers on Great Lakes and ESML.
- The contract incorporated a Tariff with a broad force majeure clause and a remedies clause requiring continued payment obligations despite force majeure.
- ESML alleged that the 2008 financial crisis and financing difficulties prevented performance and that Great Lakes misrepresented costs; ESML sought declaratory relief and damages for alleged conversion.
- Great Lakes moved to dismiss under Rule 12(b)(6) (styled as 12(b)(6) but treated as 12(c) for merits) and to strike Counts I–II as redundant.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Counts I and II state a plausible force majeure/ impracticability defense | Great Lakes argues force majeure does not excuse payment obligations independent of financing. | ESML contends contracting language and the crisis justify declaratory relief excusing performance. | Counts I–II denied; no plausible entitlement to relief under force majeure/impracticability under Michigan law. |
| Whether ESML states a plausible conversion claim | Great Lakes contends the Letter of Credit was properly drawn per contract. | ESML asserts improper draw if performance was excused. | Conversion claim dismissed. |
| Whether the misrepresentation allegations are sufficiently pleaded | Great Lakes argues no separate fraud claim; misrepresentation allegations are too conclusory. | ESML contends misrepresentation as to costs was part of the contract dispute. | Rule 9(b) pleading requirements unmet; misrepresentation claim dismissed. |
| Whether the doctrines of impossibility/impracticability warrant relief | Great Lakes maintains no basis to excuse performance. | ESML relies on 2008 crisis as impracticability/impossibility. | impossibility/impracticability defenses rejected; no relief under those doctrines. |
Key Cases Cited
- Ali v. Frazier, 575 F.Supp.2d 1084 (D.Minn.2008) (treats Rule 12(b)(6) vs 12(c) posture and standard)
- Westcott v. City of Omaha, 901 F.2d 1486 (8th Cir.1990) (motion timing under Rule 12(b) and 12(c) treated similarly)
- Burkhardt v. Bailey, 680 N.W.2d 453 (Mich.App.2004) (clear and unambiguous contract language must be enforced as written)
- Ner Tamid Congregation of North Town v. Krivoruchko, 638 F.Supp.2d 913 (N.D.Ill.2009) (financing contingency/readiness for performance; foreseeability of financing risk)
- Elavon, Inc. v. Wachovia Bank, 841 F.Supp.2d 1298 (N.D.Ga.2011) (financial crises alone not force majeure; contract terms control)
- Seitz v. Mark-O-Lite Sign Contractors, Inc., 210 N.J.Super. 646, 510 A.2d 319 (N.J.Super. Ct. Law Div.1986) (catch-all force majeure language narrowly construed)
- Burgi v. Eckes, 354 N.W.2d 514 (Minn.Ct.App.1984) (Minnesota context on related impossibility/impracticability concepts)