Scoular Company, The v. Ceres Global AG Corp., 0:14-cv-01881

Background

Scoular and Ceres negotiated from 2012 into 2014 to develop a grain/transit facility at Northgate; Riverland is a wholly owned subsidiary of Ceres.
Parties executed a November 15, 2012 Term Sheet that explicitly stated most terms were non‑binding but identified two binding provisions: confidentiality and exclusivity.
In May 2013 the parties signed a Side Letter: Scoular paid CA$3.899M for mass grading, received a three‑year right of first refusal (ROFR) and a reimbursement remedy for certain deviations from the agreed design; the Side Letter also contains a damages‑limitation clause phrased as shielding a party from liability for the other party’s negligence or breaches.
After Ceres changed management, Ceres’s board decided in early 2014 to proceed with Riverland instead of Scoular; Ceres terminated discussions and offered to reimburse Scoular (or not), and Scoular sued for breach of the Term Sheet and Side Letter, tortious interference (against Riverland), promissory estoppel, and unjust enrichment.
Defendants moved for summary judgment and to exclude Scoular’s damages expert (Dr. Nantell). The court denied both motions in full.

Issues

Issue	Scoular's Argument	Ceres/Riverland's Argument	Held
Enforceability of Term Sheet (exclusivity/confidentiality)	Term Sheet expressly makes exclusivity and confidentiality binding	Term Sheet is an agreement to agree and unenforceable	Court: Term Sheet’s language binds exclusivity and confidentiality; denial of summary judgment to defendants
Scope of Side Letter ROFR (whether Ceres–Riverland deal triggers ROFR)	ROFR applies to any “party other than Scoular,” which includes Riverland	ROFR applies only to arm’s‑length third parties; internal/affiliate deals excluded	Court: ROFR covers deals with Riverland; denial of summary judgment to defendants
Damages limitation and exclusive remedy in Side Letter (precluding other damages/lost profits)	Limitation protects against liability for the other party’s breaches but does not bar recovery from the breaching party; reimbursement remedy is narrow and does not cover ROFR breach	The reimbursement provision plus limitation clause makes reimbursement the exclusive remedy; bars other damages including lost profits	Court: Adopted Scoular’s narrower reading; damages limitation does not preclude breach damages or lost profits; denial of summary judgment on damages
Tortious interference by subsidiary (Riverland) with parent’s contract	Riverland had no privilege to interfere; parent‑subsidiary privilege not established as absolute under Minnesota law	A parent/subsidiary privilege bars tortious interference claims where entities share identity/interest	Court: No clear absolute privilege under Minnesota law shielding a subsidiary from interfering with a parent’s contract; claim survives summary judgment
Equitable claims (promissory estoppel, unjust enrichment)	Contracts are narrow; equitable claims concern separate misrepresentations and investment reliance	Existence of contracts bars equitable remedies; unjust enrichment requires illegality	Court: Contracts don’t address alleged misrepresentations and investment value; equitable claims not barred at this stage; denial of summary judgment
Admissibility of damages expert (Nantell)	Nantell reasonably relied on voluminous internal models, vetted assumptions, and independent judgment; methodology helpful to jury	Expert relied on party projections without independent verification; used unsigned drafts; projected speculative long‑term profits	Court: Admissibility favored; Nantell’s methods and reliance were sufficiently reliable and relevant; Daubert challenge denied

Key Cases Cited

Anderson v. Liberty Lobby, 477 U.S. 242 (1986) (summary‑judgment standard for genuine issues of material fact)
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986) (summary judgment requires viewing evidence in light most favorable to nonmovant)
Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (party opposing summary judgment must present evidence on an essential element)
Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579 (1993) (trial court’s gatekeeping role under Rule 702)
Kumho Tire Co. v. Carmichael, 526 U.S. 137 (1999) (Rule 702 gatekeeping extends to all expert testimony)
Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752 (1984) (treatment of parent and wholly owned subsidiary as a single entity for some legal purposes)
Leoni v. Bemis Co., 255 N.W.2d 824 (Minn. 1977) (lost profits for new ventures require a reasonable evidentiary basis)