Allied Erecting v. U.S. Steel Corp.

• Court: Court of Appeals for the Sixth Circuit
• Decided: May 12, 2020
• Docket: 19-3326
• Status: Unpublished

Opinion

NOT RECOMMENDED FOR PUBLICATION File Name: 20a0266n.06

No. 19-3326

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT FILED May 12, 2020 DEBORAH S. HUNT, Clerk ALLIED ERECTING AND DISMANTLING ) CO., INC., ) ) ON APPEAL FROM THE Plaintiff–Appellant, ) UNITED STATES DISTRICT ) COURT FOR THE NORTHERN v. ) DISTRICT OF OHIO ) UNITED STATES STEEL CORPORATION, ) ) OPINION Defendant–Appellee. ) )

BEFORE: MERRITT, MOORE, and BUSH, Circuit Judges.

KAREN NELSON MOORE, Circuit Judge. This complex contractual dispute is rooted

in a decades-long fight between Allied Erecting and Dismantling Company, Inc. (“Allied”) and

United States Steel Corporation (“U.S. Steel”) over dismantling work Allied performed (or, in

some cases, did not perform) at a defunct U.S. Steel steelmaking plant in eastern Pennsylvania

(“Fairless”). The dispute culminated in a three-week jury trial in 2015, which in turn resulted in a

$10.7 million judgment in U.S. Steel’s favor.

Two years ago, we issued an opinion affirming that judgment in substantial part. See Allied

Erecting & Dismantling Co. v. U.S. Steel Corp., 726 F. App’x 279 (6th Cir. 2018) (“Allied I”). In

that decision, however, we left open one question for the district court to resolve on remand:

whether two of Allied’s breach of contract claims—“count IV” and “count V” of Allied’s

complaint, which, we concluded, the district court had erroneously dismissed on statute of

limitations grounds—could be resolved by the court as a matter of law, or whether the underlying No. 19-3326, Allied Erecting and Dismantling Co., Inc. v. U.S. Steel Corp.

factual disputes were sufficiently material such that another jury trial would be needed to address

them. The district court thought no genuine disputes of material fact existed and so it granted U.S.

Steel judgment as a matter of law (“JMOL”) on both counts. Allied again appealed.

We are sympathetic to the district court’s desire to bring this case to an end. As noted

above, this complex commercial litigation has lasted literally decades, and has already resulted in

one time-consuming jury trial (and one remand after appeal). But sometimes the law and

efficiency are not on the same team. And, in our view, the law in this case requires that we do the

inefficient thing. That is, that we REVERSE the district court’s grant of JMOL and REMAND—

again—so that the court can conduct a new trial on Allied’s two remaining claims.

I. BACKGROUND

Because we have reviewed this case’s background once before, in this decision we focus

on only those facts relevant to the parties’ present dispute.

A.

There are two contracts at issue. They are long and complicated in the abstract. But when

one focuses on just the provisions pertinent to this appeal, it quickly becomes apparent that the

material exchange is a simple one: Allied dismantles U.S. Steel’s Fairless plant at essentially no

cost, and, in return, U.S. Steel lets Allied keep and sell the scrap metal generated by that

dismantling work.

First, there is the parties’ 1992 construction contract (which concerned dismantling work

to be performed at the “hot end” of the Fairless plant1 and which the parties refer to as the

1 This litigation concerns dismantling work to be performed at the “cold end” of the plant, by contrast. But the distinction is immaterial for present purposes.

2 No. 19-3326, Allied Erecting and Dismantling Co., Inc. v. U.S. Steel Corp.

“1992 Specification”). In this contract, U.S. Steel promised Allied that, after it (U.S. Steel)

completed asbestos removal at any Fairless facility it intended to dismantle, it would “assign to

[Allied] ownership of [that] facility,” R.269-2 (1992 Specification § 5.2) (Page ID #18069), in

exchange for just one dollar, id. § 8.1 (Page ID #18084). And, the contract continued, this

assignment of ownership would include, among other materials, (a) “[a]ll ferrous and non-ferrous

scrap resulting from the dismantling work,” (b) “[a]ll ferrous and non-ferrous scrap located within

each dismantling area,” and (c) “[r]ailroad track located within a specific dismantling area which

exclusively serves that dismantling area.” Id. §§ 5.2.1, 5.2.2, 5.2.5 (Page ID #18069–70).

Moreover, the contract noted near its conclusion, although U.S. Steel could not “remove any

complete facility from the scope of this Specification” after Allied commenced work at that

facility, U.S. Steel could remove “a building” from Allied’s scope of work, so long as U.S. Steel

paid Allied “50% of the ‘Scrap Value.’” Id. §§ 10.2, 10.3 (Page ID #18084).

Second, there is the 2003 settlement agreement between the parties (the “2003 AIP”),

which built upon the 1992 Specification. In this contract, U.S. Steel promised Allied that “[a]ny

further dismantling work” that needed to be done at the Fairless plant (and that U.S. Steel had

“released and authorized in writing for dismantling”) would “be awarded to and performed by

[Allied]” pursuant to “the same relevant terms and conditions contained in” the 1992 Specification.

R.269-4 (2003 AIP § III) (Page ID #18108). Indeed, just like in the 1992 Specification, this

agreement stated explicitly, “[Allied] will own all ferrous and non-ferrous scrap generated on any

projects awarded to [it].” Id. § II(B)(7) (Page ID #18107). And in exchange for all this, the

agreement concluded, Allied would conduct its dismantling free of charge. See id. § III (Page ID

#18108) (“[S]uch dismantling shall be at no cost to U.S. Steel. . . .”).

3 No. 19-3326, Allied Erecting and Dismantling Co., Inc. v. U.S. Steel Corp.

B.

We now turn to Allied’s two breach of contract claims, and the evidence it adduced at trial

in support of those claims.

First, there is Allied’s breach of contract count IV. Here, Allied alleges that U.S. Steel

removed certain buildings from the scope of Allied’s dismantling work without compensating

Allied for the buildings’ scrap value, thus violating the 1992 Specification’s removal compensation

provision. See R.43 (2d Am. Compl.) (Page ID #549–51). And, as evidence of this breach, Allied

points to the following trial testimony and documentation:

(1) In 2004, U.S. Steel “released and authorized” the Fairless plant’s “Tin and Sheet” facility for dismantling (thus awarding that facility to Allied under the 2003 AIP), see, e.g., R.274 (Trial Tr.) (Page ID #18768–77); (2) Shortly thereafter, Allied commenced work at the Tin and Sheet facility (thus satisfying the removal compensation provision’s precondition for compensation), see, e.g., id. at Page ID #18857, 18868; (3) during or after June 2008,2 U.S. Steel removed from Allied’s scope of dismantling work certain buildings within the Tin and Sheet facility, see, e.g., Allied I, 726 F. App’x at 285 (collecting record citations); (4) U.S. Steel failed to pay Allied 50% of the removed buildings’ “Scrap Value,” in violation of the 1992 Specification’s removal compensation provision, see, e.g., R.274 (Trial Tr.) (Page ID #18868–69); and (5) this breach caused Allied to suffer damages, see, e.g., R.280 (Trial Tr.) (Page ID #20558–61).

2 Why “June 2008”? Because, in our prior decision, we emphasized that the only reason U.S. Steel was not entitled to JMOL on Allied’s breach of contract counts IV and V (whereas U.S. Steel was so entitled on Allied’s other contract claim) was that “Allied introduced evidence that could lead a reasonable factfinder to conclude that U.S. Steel” breached the contractual provisions at issue in counts IV and V “within the four-year period preceding Allied’s filing of its June 2012 complaint,” i.e., within the relevant Pennsylvania statute of limitations. Allied I, 726 F. App’x at 285. Thus, if Allied rested its contract claims on breaches that occurred before June 2008, that would contradict our prior ruling.

4 No. 19-3326, Allied Erecting and Dismantling Co., Inc. v. U.S. Steel Corp.

Second, there is Allied’s (distinct but similar) breach of contract count V. Here, Allied

more broadly alleges that U.S. Steel refused to let Allied remove any scrap or railroad track from

the Tin and Sheet facility—all of which Allied supposedly owned—thus violating the 1992

Specification’s assignment of ownership provision. See R.43 (2d Am. Compl.) (Page ID #551–

53). And, as evidence of this breach, Allied points to the following trial testimony and

documentation:

(1) In 2004, U.S. Steel “released and authorized” the Tin and Sheet facility for dismantling (thus awarding that facility to Allied under the 2003 AIP), see, e.g., R.274 (Trial Tr.) (Page ID #18768–77); (2) Shortly thereafter, U.S. Steel conducted asbestos removal at the Tin and Sheet facility and Allied paid it $1 consideration (thus satisfying the 1992 Specification’s preconditions for assignment of ownership), see, e.g., id. at Page ID #18805–10; R.43-1 (Property Transfer Order) (Page ID #561–62); (3) during or after June 2008, U.S. Steel refused to let Allied remove scrap and railroad track from the Tin and Sheet facility, in violation of the 1992 Specification’s assignment of ownership provision, see, e.g., R.274 (Trial Tr.) (Page ID #18870–74); Tr. Ex. P-350 (June 22, 2012 Ranum Letter); and (4) this breach caused Allied to suffer damages, see, e.g., R.281 (Trial Tr.) (Page ID #20625–26).

C.

On remand from Allied I, however, the district court concluded that U.S. Steel was entitled

to JMOL on both count IV and count V, and that, consequently, a new trial as to just those two

claims was unwarranted. See Allied Erecting & Dismantling Co. v. U.S. Steel Corp., No. 4:12-cv-

1390, 2019 WL 1227191 (N.D. Ohio Mar. 15, 2019). The district court’s reasoning was twofold.

First, the district court reasoned, because the 1992 Specification stated that Allied would

own “[a]ll ferrous and non-ferrous scrap resulting from [its] dismantling work,” and because the

2003 AIP similarly stated that Allied would own the scrap “generated on any projects awarded to

5 No. 19-3326, Allied Erecting and Dismantling Co., Inc. v. U.S. Steel Corp.

it,” the contracts contained a clear and unambiguous “generation requirement,” under which

“Allied had to generate the scrap (i.e., actually perform the dismantling) in order to have the ability

to use the scrap or sell it for revenue.” Id. at *4–5. And, the district court continued, because

“[t]he trial record [was] devoid of any evidence that Allied generated scrap” at the Tin and Sheet

facility, Allied was not contractually entitled to any of the facility’s scrap value, thus defeating

counts IV and V as a matter of law. Id. at *5.

Second, the district court reasoned, even if its contractual holding lacked merit, U.S. Steel

was nonetheless entitled to JMOL on both of Allied’s claims for evidentiary reasons. More

specifically, the district court held, because Allied’s evidentiary showings as to “when” U.S. Steel

removed buildings from Allied’s scope of work (count IV), and/or denied Allied’s requests to

collect scrap and railroad track (count V), were “unspecific, vague, and conclusory,” Allied’s

claims failed as a matter of law, the “generation requirement” notwithstanding. Id. at *6.

Allied timely appealed, challenging both conclusions.

II. DISCUSSION

We start with the standard of review, and then turn to an analysis of the district court’s

decision.

“If a party has been fully heard on an issue during a jury trial,” and, after that showing, the

district court “finds that a reasonable jury would not have a legally sufficient evidentiary basis to

find for the party on that issue,” the court may grant the opposing party JMOL and thereby remove

that issue from the jury’s province. Fed. R. Civ. P. 50(a). Just as in the summary judgment context,

however, the district court may grant such a motion only if, “when viewing the evidence in a light

6 No. 19-3326, Allied Erecting and Dismantling Co., Inc. v. U.S. Steel Corp.

most favorable to the non-moving party, giving that party the benefit of all reasonable inferences,

there is no genuine issue of material fact for the jury, and reasonable minds could come to but one

conclusion in favor of the moving party.” Barnes v. City of Cincinnati, 401 F.3d 729, 736 (6th

Cir. 2005) (emphasis added). Likewise, we review that grant of JMOL de novo on appeal,

reversing and remanding for retrial if we find error. Cf. Tuttle v. Metro. Gov’t of Nashville, 474

F.3d 307, 324 (6th Cir. 2007) (reversing post-trial grant of JMOL to defendant and reinstating

jury’s verdict in favor of plaintiff).

When considering the sufficiency of a party’s evidentiary showing in a Pennsylvania-based

contract dispute like this one, moreover, we must remember that a court can interpret a contract as

a matter of law only “[w]hen the terms of [the] contract are clear and unambiguous.” Ins.

Adjustment Bureau, Inc. v. Allstate Ins. Co., 905 A.2d 462, 468 (Pa. 2006). If a contract’s terms

are “ambiguous,” by contrast—meaning they are “reasonably susceptible of different

constructions”—then the interpretive task must be conducted by “the finder of fact,” here, the jury.

Id. at 468–69.

Applying these principles, we find that neither conclusion offered by the district court in

support of JMOL holds water.

1.

First, the district court’s conclusion that the contracts contain a clear and unambiguous

“generation requirement” both misreads the contracts and misunderstands the nature of Allied’s

claims.

7 No. 19-3326, Allied Erecting and Dismantling Co., Inc. v. U.S. Steel Corp.

We start with the contracts. There is nothing in the 1992 Specification unambiguously

stating that Allied had to tear a building down in order to have any claim to the scrap contained

therein. Rather, the contract appears to say that U.S. Steel would assign ownership of a facility’s

scrap to Allied before dismantling commenced, as evidenced by the contract’s statement that U.S.

Steel’s assignment of ownership would include “[a]ll ferrous and non-ferrous scrap located within

each dismantling area,” and “[r]ailroad track located within a specific dismantling area which

exclusively serves that dismantling area,” in addition to “[a]ll ferrous and non-ferrous scrap

resulting from [Allied’s] dismantling work.” And although the 2003 AIP contemplates Allied

owning only scrap “generated on any projects awarded to it”—not scrap already “located within”

said project—that later contract also states explicitly that Allied would perform any post-2003

work awarded to it pursuant to “the same relevant terms and conditions contained in” the 1992

Specification, which arguably includes the 1992 Specification’s assignment of ownership

provision. Moreover, as Allied points out in its brief, the parties’ pre-litigation course of conduct

strongly suggests that U.S. Steel thought Allied’s ownership rights vested before dismantling

commenced. See Appellant Br. at 31. Indeed, Allied emphasizes, on August 7, 2004 U.S. Steel

actually assigned to Allied U.S. Steel’s ownership right in the scrap “associated with” the Tin and

Sheet facility, just as the 1992 Specification contemplated, and despite the fact that Allied had not

yet begun tearing those buildings down. R.43-1 (Property Transfer Order) (Page ID #561–62). In

light of these facts, then, it is at least ambiguous whether the contracts contained a “generation

requirement,” thus rendering JMOL on that basis inappropriate. See Ins. Adjustment Bureau, Inc.,

8 No. 19-3326, Allied Erecting and Dismantling Co., Inc. v. U.S. Steel Corp.

905 A.2d at 469 (holding that if a contract’s terms are “ambiguous” then the interpretive task must

be conducted by “the finder of fact”).3

More still, even if the contracts did contain a clear and unambiguous generation

requirement, that would still not entitle U.S. Steel to JMOL on both of Allied’s claims. That is

because count IV of Allied’s complaint has nothing to do with the 1992 Specification’s assignment

of ownership provision, but instead centers around that contract’s removal compensation

provision. The district court simply overlooked this point.4

2.

The district court’s alternative, evidentiary-based holding fares no better. With respect to

count IV, the district court appeared to miss (inadvertently) that, in Allied I, we effectively resolved

this exact point in Allied’s favor. See Allied I, 726 F. App’x at 285 (citing multiple trial records

from which a reasonable juror could have concluded that U.S. Steel removed “specific buildings”

from Allied’s scope of work, after June 2008). And as for count V, although the district court did

3 The district court’s contrary conclusion is puzzling, because, on at least two prior occasions in this litigation, the court recognized this exact ambiguity, and said that it could not be resolved as a matter of law. See, e.g., Allied Erecting & Dismantling Co. v. U.S. Steel Corp., 2013 WL 5442276, at *14 (N.D. Ohio Sept. 27, 2013) (denying U.S. Steel’s motion to dismiss); Allied Erecting & Dismantling Co. v. U.S. Steel Corp., 52 F. Supp. 3d 866, 882–85 (N.D. Ohio 2014) (denying U.S. Steel summary judgment on this basis and observing simply, “[t]hese are factual disputes”). And although the district court appeared to change its mind on remand because it (belatedly) realized that it would have “border[ed] on ludicrous” for U.S. Steel to assign Allied rights to scrap that Allied had not yet generated (because U.S. Steel would then have had “no way of forcing Allied to complete the dismantling in a timely fashion”), Allied Erecting, 2019 WL 1227191, at *5, that is far from the only reasonable interpretation of the parties’ agreements. After all, as Allied notes in response, Allied could only make “money if it [was] taking down buildings and generating scrap.” Appellant Br. at 39 n.22. So, in Allied’s view, there was “no incentive—assignment of ownership or no assignment of ownership—for [it] to delay in taking down buildings.” Id. 4 For what it’s worth, the existence of a generation requirement may not doom Allied’s entire count V as a matter of law either. Even if a “generation requirement” prevented Allied from owning the potential scrap contained within the Tin and Sheet facility (because Allied couldn’t own that scrap until generating it), Allied may nonetheless have owned any pre-existing scrap and railroad track contained therein (assuming of course that such scrap existed), per §§ 5.2.2 and 5.2.5 of the 1992 Specification. But because neither the trial record nor the parties’ briefing clarify whether this issue is actually in dispute, we do not address it further.

9 No. 19-3326, Allied Erecting and Dismantling Co., Inc. v. U.S. Steel Corp.

cite on-point trial testimony that appears vague and conclusory on its face—in the sense that the

testifying witness did not say exactly when Allied requested that U.S. Steel allow it to remove

scrap and railroad track from the dismantling sites, see Allied Erecting, 2019 WL 1227191, at *5—

the district court overlooked a letter submitted into evidence alongside that testimony showing that

Allied made such requests starting in 2010. See Appellant Br. at 49–51 (discussing Tr. Ex. P-350).

Moreover, as Allied notes in its brief, given the straightforward nature of count V (at least with

respect to breach; damages are another question), it is not clear why Allied needed to submit more

detailed evidence on this point than it did in order to take its claim to a jury. See id. at 49 (“The

fact is that there was not much more that Allied could have said to prove a negative (that U.S. Steel

did not make these facilities available to Allied), other than the fact that Allied asked U.S. Steel to

make the rail and nonferrous [scrap] available and U.S. Steel refused.”).

The district court thus erred in granting U.S. Steel JMOL.

We make two points in conclusion. First, we acknowledge that U.S. Steel raised two

alternative grounds for affirmance in its brief. See Appellee Br. at 31–47. But because neither

ground would permit us to affirm the district court’s grant of JMOL in full, as the district court

seemed to acknowledge in its remand order, see Allied Erecting, 2019 WL 1227191, at *3 n.6, *6

n.12, we leave it to the district court to resolve these issues in the first instance, within the context

of a new trial. Second, we acknowledge Allied’s request that we re-assign this matter to a different

judge on remand. See Appellant Br. at 37–38, n.21 (citing John B. v. Goetz, 626 F.3d 356 (6th

Cir. 2010)). But because we detect no bias in the district court’s handling of this case—to the

10 No. 19-3326, Allied Erecting and Dismantling Co., Inc. v. U.S. Steel Corp.

contrary, we find admirable the district court’s patience in this matter—we decline to grant Allied’s

request for reassignment.

III. CONCLUSION

For these reasons, we REVERSE the district court’s judgment and REMAND for a new

trial.