Great Lakes Gas Transmission Ltd. v. Essar Steel Minn., LLC

103 F.Supp.3d 1000

GREAT LAKES GAS TRANSMISSION LIMITED PARTNERSHIP, Plaintiff,

v.ESSAR STEEL MINNESOTA, LLC; Essar Steel Limited f/k/a Essar Steel Holdings, Ltd.; Essar Steel India Limitedf/k/a Essar Steel Limited; and Essar Global Fund Ltd. f/k/a Essar Global Limited, Defendants.

Case No. 09–cv–3037 SRN/LIB.

United States District Court, D. Minnesota.

Signed May 4, 2015.

Brian A. Farlow, Hayley Ellison, Worthy W. Walker, Barbara L. Wohlrabe, and David W. Elrod, Elrod PLLC, Dallas, TX; David T. Schultzand Julian C. Zebot, Maslon LLP, Minneapolis, MN, for Plaintiff.

Douglas H. Flaum, Kevin P. Broughel, and Shahzeb Lari, Paul Hasting LLP, New York, NY; Eric A. Hirsch, Fried Frank Harris Shriver & Jacobson LLP, One New York Plaza, New York, NY; Lousene M. Hoppeand Nicole M. Moen, Fredrikson & Byron, PA, Minneapolis, MN, for Defendants.

MEMORANDUM OPINION AND ORDER

SUSAN RICHARD NELSON, District Judge.

I. INTRODUCTION

This matter is before the Court on the following motions: (1) Defendant Essar Steel Minnesota LLC's Motion to Dismiss for Lack of Subject Matter Jurisdiction [Doc. No. 856]; (2) Plaintiff's Motion for Leave to File Second Amended Complaint [Doc. No. 812]; (3) Plaintiff's Motion in Limine [Doc. No. 835]; and (4) Defendant's Motion in Limine [Doc. No. 842]. For the reasons set forth below, the Court denies Defendant's Motion to Dismiss and Plaintiff's Motion for Leave to File Second Amended Complaint; and the Court denies, without prejudice, Plaintiff's and Defendant's Motions in Limine.

II. BACKGROUND

A. The Parties

Although the facts of this matter are thoroughly detailed in prior orders of this Court, the Court discusses the relevant facts of the case below. Plaintiff Great Lakes Gas Transmission Limited Partnership (“Plaintiff” or “Great Lakes”) is a partnership entity composed of: “(1) TransCanada GL, Inc., a corporation organized under the laws of the state of Delaware, (2) TC GL Intermediate Limited Partnership, a Delaware limited partnership, and (3) Great Lakes Gas Transmission Company, a corporation organized under the laws of the state of Delaware.” (SeeFirst Am. Compl. ¶ 2 [Doc. No. 35].) One of these partners, TC GL Intermediate Limited Partnership is, in turn, composed of: (1) TC PipeLines GP, Inc., a Delaware corporation, and (2) TC PipeLines, LP, which is a publicly-traded Delaware master limited partnership. (See id.¶ 3.) TC PipeLines, LP is composed of public unitholders and two partners, TC PipeLines, GP, Inc. and TransCan Northern Ltd. (See id.¶¶ 2–4; see alsoPl.'s Mem. at 37–38 [Doc. No. 862].)

Essar Steel Minnesota, LLC (“ESML” or “Defendant”) is a Minnesota limited liability corporation with its principal place of business in Minnesota. (SeeFirst Am. Compl. ¶ 5 [Doc. No. 35].) Essar Steel Holdings Ltd. is a foreign company that is incorporated under the laws of Mauritius and has its principal place of business in Mauritius. (See id.¶ 6.) Essar Steel Limited is a foreign company that is incorporated under the laws of India, has a principal place of business in India, and is registered to conduct business in the State of New York. (See id.¶ 7.) Essar Global Limited is a foreign company incorporated under the laws of the Cayman Islands with offices in Asia, Africa, Europe, and the Americas, and although it has its principal place of business in Dubai, it has an office in the State of New York. (See id.¶ 8.)

In Plaintiff's First Amended Complaint, the controlling version of the Complaint in this case, Great Lakes alleges that the Court has diversity jurisdiction over this case as the matter in controversy exceed $75,000 and is between citizens of different States. (See id.¶ 9.)

B. The Contract and the Parties' Dispute

The underlying controversy between the parties stems from Defendants' breach of contract. The contract (“Contract”) was initially executed in 2006 between Plaintiff and Minnesota Steel Industries (“MSI”). (Ellison Aff., Ex. 2 “Contract” [Doc. No. 681–2].) However, in 2007, Defendant ESML purchased MSI, and “expressly and/or impliedly assumed all of [MSI's] liabilities,” including MSI's contractual obligations. (SeeFirst Am. Compl. ¶ 16 [Doc. No. 35]; see alsoFirst Am. Answer ¶ 19 [Doc. No. 314].) ESML is affiliated with several foreign entities, which are also Defendants in this action—Essar Steel Limited, formerly known as Essar Steel Holdings, Ltd.; Essar Steel India Limited, formerly known as Essar Steel Limited; and Essar Global Fund Ltd., formerly known as Essar Global Limited (“Foreign Essar Defendants”).

The Contract required Great Lakes, a regulated interstate natural gas pipeline, to transport up to 55,000 dekatherms of natural gas firm capacity per day on MSI's behalf. (See First Am. Compl. ¶ 17 [Doc. No. 35].) The Contract, otherwise known as the Transportation Services Agreement (“TSA”), was effective July 1, 2009 through March 31, 2024. (Id.) In exchange for Plaintiff's transportation of natural gas, the Contract required MSI to pay Great Lakes the maximum reservation rates and charges on a monthly basis, pursuant to the applicable rate schedule reflected in Plaintiff's gas tariff (the “Tariff”) on file with the Federal Energy Regulatory Commission (“FERC”). (Id.) The TSA specifically provides:

This Agreement shall incorporate and in all respects be subject to the “General Terms and Conditions” and the applicable Rate Schedule (as stated above) set forth in Transporter's [Plaintiff's] FERC Gas Tariff, Second Revised Volume No. 1, as may be revised from time to time. Transporter may file and seek Commission approval under Section 4 of the Natural Gas Act (NGA) at any time and from time to time to change any rates, charges or provisions set forth in the applicable Rate Schedule (as stated above) and the “General Terms and Conditions” in Transporter's FERC Gas Tariff, Second Revised Volume No. 1, and Transporter shall have the right to place such changes in effect in accordance with the NGA, and this Agreement shall be deemed to include such changes and any such changes which become effective by operation of law and Commission Order, without prejudice to Shipper's [ESML's] right to protest the same.

(SeeMoen Decl., Ex. 5 “TSA,” ¶ 12 [Doc. No. 859–1].) Thus, the TSA expressly incorporated the terms of the Tariff.

In addition, pursuant to the Contract, MSI was obligated to pay all applicable surcharges. (First Am. Compl. ¶ 17 [Doc. No. 35].) The parties agree that the Tariff “provide[d] terms and conditions that govern[ed] the parties' rights and obligations.” (See10/4/12 Hr'g Tr. at 33, 35, 41 (statements by ESML's counsel) [Doc. No. 470].)

In October 2009, Great Lakes filed this action against the above named Defendants, alleging that ESML failed to make the first payment of $190,190 due on August 17, 2009, and has failed to make all subsequent payments. (See generallyCompl. [Doc. No. 1]; First Am. Compl. ¶ 20 [Doc. No. 35].) Plaintiff alleges four counts against Defendants. In Count One, Great Lakes alleges that ESML is liable for breach of contract and anticipatory repudiation. (See id.¶¶ 48–54.) Plaintiff contends that because “both the Tariff and the TSA form the contract between Great Lakes and Essar, the claim for breach of contract by necessity is based on both.” (SeePl.'s Mem. at 2 [Doc. No. 862].) In Count One, Great Lakes additionally argues that ESML is liable for damages for breaching the Contract. (SeeFirst Am. Compl. ¶ 53 [Doc. No. 35].)

In Count Two, Plaintiff claims that “[u]nder the equitable theories or remedies of piercing the corporate veil, alter ego and/or mere instrumentality, the corporate structures of each of the Essar entities should be disregarded, and each of the foreign Essar entities should be held liable for the damages recoverable by Great Lakes as a result of [ESML's] breach of and anticipatory repudiation of the Contract.” (See id.¶ 58.) In Count Three, Plaintiff claims that “[a]s a result of the Essar entities' joint enterprise or joint venture, each of the foreign Essar entities should be held liable for the damages recoverable by Great Lakes as a result of the breach and anticipatory repudiation of the Contract.” (See id.¶ 61.) Finally, in Count Four, Great Lakes alleges that because ESML was acting as the agent for the foreign Essar entities, all of the foreign Essar entities should be held liable for the damages suffered by Great Lakes. (See id.¶ 63.)

C. Procedural Posture

As this case was filed several years ago, the Court has already had the opportunity to rule on the merits of Plaintiff's breach of contract claim and has determined that Defendants breached the Contract and are therefore liable for paying Plaintiff damages. The amount of damages due remains an unsettled issue, however.

In the Fall of 2014, the parties were preparing for trial on the appropriate discount rate to apply to the damages due to Plaintiff. Plaintiff filed a Motion in Limine [Doc. No. 835], as did Defendants [Doc. No. 842]. When this case was on the eve of trial, Defendants alerted the Court via letter [Doc. No. 811] that they believed that the Court lacked subject matter jurisdiction to decide this case. Defense counsel explained that they “first became aware” of the issue when they were preparing their trial brief. (SeeFlaum Letter at 1 [Doc. No. 811].) Specifically, Defendants uncovered that Plaintiff's initial disclosure about the parties' citizenship was incomplete as Great Lakes failed to disclose the citizenship of TC PipeLines, LP's hundreds or thousands of public unitholders. (See id.) Defense counsel argued that if any of the public unitholders was a Minnesota citizen, then diversity jurisdiction is incomplete in this case. (See id.at 2.)

The Court permitted Plaintiff to file a Motion for Leave to File a Second Amended Complaint to assert federal question jurisdiction. (SeeHr'g Tr. 4:7–12, Oct. 15, 2014 [Doc. No. 855].) Plaintiff duly filed this motion [Doc. No. 812], and submitted a memorandum in support [Doc. No. 814]. In Plaintiff's proposed Second...