CLEVELAND-CLIFFS MINNESOTA LAND DEVELOPMENT LLC et v. MIRANDA MINERAL RESOURCES, LLC

CourtUnited States Bankruptcy Court, D. Delaware
DecidedFebruary 19, 2025
Docket18-50416
StatusUnknown

This text of CLEVELAND-CLIFFS MINNESOTA LAND DEVELOPMENT LLC et v. MIRANDA MINERAL RESOURCES, LLC (CLEVELAND-CLIFFS MINNESOTA LAND DEVELOPMENT LLC et v. MIRANDA MINERAL RESOURCES, LLC) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
CLEVELAND-CLIFFS MINNESOTA LAND DEVELOPMENT LLC et v. MIRANDA MINERAL RESOURCES, LLC, (Del. 2025).

Opinion

IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: Chapter 11

ESSAR STEEL MINNESOTA LLC and Case No. 16-11626 (CTG) ESML HOLDINGS INC., et al.,

Reorganized Debtors. CLEVELAND-CLIFFS MINNESOTA LAND DEVELOPMENT LLC, Adv. Proc. No. 18-50416 (CTG)

Plaintiff/Counterclaim- Related Docket Nos. 92, 103 Defendant,

v.

MIRANDA MINERAL RESOURCES, LLC and MESABI METALLICS COMPANY LLC,

Defendants/Counterclaim- Plaintiffs. MEMORANDUM OPINION This adversary proceeding is a dispute over which of two parties should be permitted to mine land in northern Minnesota.1 On the merits, Minnesota Statutes, Chapter 560 provides that when a plaintiff “in an action under this chapter owns one- half or more of the mineral land, the court must make an order allowing the complainant to enter on and mine the land to produce from it the minerals, mineral

1 The two parties that assert rights to the lands are plaintiff Cleveland-Cliffs Minnesota Land Development LLC (referred to, as are its various affiliates, as “Cliffs”) and defendant Miranda Mineral Resources, LLC (referred to as “Miranda Mineral”). Miranda Mineral is an affiliate of defendant Mesabi Metallics Company (which is referred to “Mesabi”, and together with Miranda Mineral, as the “Mesabi Parties”). ores, coal, clay, sand, gravel, or peat, that may be on or in the land.”2 But in this case, each of the parties seeking to mine the land holds an interest of exactly 50 percent. And both claim that they want to mine the land. So which party should be entitled

to do so? That is an interesting question of Minnesota state law, and one that both parties now agree should be decided by the Minnesota courts. All of which gives rise to a fairly obvious question: what are we doing here? The answer to that question is more complicated, and requires, for context, some understanding of the rather epic battle between Cliffs (a leading steel manufacturer) and Mesabi (the reorganized debtor in this bankruptcy case, which has been seeking to compete with Cliffs by mining iron ore pellets on Minnesota’s

Mesabi Range). The principal battleground for that dispute is a separate adversary proceeding that was filed in this Court in 2017, involving (among other things) antitrust and business tort claims. This lawsuit was originally filed by Cliffs in a Minnesota state court in 2018, soon after it acquired its 50 percent interest in the land from Glacier Park.3 After Miranda Mineral acquired the other 50 percent interest, the Mesabi Parties removed

the case to federal court in Minnesota on the ground that it was related to the Essar Steel Minnesota bankruptcy case pending in this Court. On that basis, the Minnesota

2 Minn. Stat. § 560.03(1). 3 Glacier Park Iron Ore Properties LLC is referred to as “Glacier Park.” district court transferred the case here.4 The parties then agreed to an informal stay of this case while the antitrust dispute mentioned above proceeded in this Court. There were two legal reasons and one practical one why it may have made

sense to stay this action at that time. As to the legal issues, first, the Mesabi Parties took the position that Cliffs had no right at all to the 50 percent interest it claimed in the land at issue. Before the bankruptcy, Mesabi had leased this 50 percent interest in the land from Glacier Park. Mesabi argued that it had validly assumed that lease in the bankruptcy case. Glacier Park, on the other hand, took the position that Mesabi’s lease had terminated. On that basis, Glacier Park conveyed its 50 percent interest in that land to Cliffs. If Mesabi were correct about its lease having been

validly assumed, the Mesabi Parties (following their acquisition of the other 50 percent interest) would have the right to mine 100 percent of the land, and there would be no state-law dispute to be resolved. Second, even if Mesabi had failed to assume the lease in the bankruptcy case, it argued that Cliffs’ acquisition of its 50 percent interest in the parcels of land at issue was anticompetitive and should thus be set aside as a remedy in the antitrust

action. The practical reason for a stay was that back in 2018, Mesabi was quite far from having raised the financing necessary to begin mining work on the land even if it had the legal right to do so. For those reasons, the Court appreciates that the

4 In re Essar Steel Minnesota LLC and ESML Holdings Inc., et al., Bankr. D. Del. No. 16- 11626. Matters on the docket in this main bankruptcy case are cited as “Main Case D.I. __.” parties sensibly reached the decision to put this case on the backburner while those other issues were addressed in the antitrust case. The first legal issue was resolved within a few months of the filing of this

lawsuit. In June 2018, Judge Shannon (who was then presiding over these cases) concluded that Mesabi had not validly assumed the leases in question. As such, Cliffs had properly acquired its interest in the land from Glacier Park. The second legal issue is still pending. After years of litigation, in August 2024 this Court issued a decision on cross motions for summary judgment in which those motions were each granted in part and denied in part.5 As relevant here, this Court’s decision on summary judgment was that genuine disputes of material fact precluded

the entry of summary judgment on the question whether Cliffs’ acquisition of its 50 percent interest in the land in question was anticompetitive. Last week, the district court withdrew the reference over that matter.6 So the antitrust dispute is now in the hands of the district court – a court that has an exceptionally busy docket. Then, in November 2024, the Mesabi Parties filed a motion for summary judgment in this Section 560 action.7 The parties disputed the appropriate briefing

5 Mesabi Metallics Co. v. Cleveland-Cliffs Inc., et al., Bankr. D. Del. No. 17-51210, D.I. 1070 (Aug. 27, 2024). That Memorandum Opinion was originally filed under seal to give the parties the opportunity to argue that any part of it should be redacted before being filed publicly. The Court ultimately rejected the argument that portions of the Memorandum Opinion should be redacted and filed a public version of the Memorandum Opinion on September 4, 2024. Mesabi Metallics Co., D.I. 1074 (Sept. 4, 2024). That Memorandum Opinion is referred to as the “Antitrust Summary Judgment Opinion.” 6 See In re Essar Steel Minnesota, LLC, D. Del. No. 24-mc-00531 (GBW), D.I. 10 (Feb. 14, 2025) (memorandum opinion denying motion for interlocutory appeal and granting motion to withdraw the reference). 7 D.I. 67. schedule on that motion, with the Mesabi Parties contending that they were now prepared to begin work on the land, such that this Court should deny Cliffs’ request for an eight-week extension of time to oppose their summary judgment motion.8 On

a hearing devoted to the question of scheduling, the Court raised the question whether these disputes involving unresolved questions of Minnesota law even belong in this Court. At the conclusion of that hearing, the Court set a schedule under which the parties would have the opportunity to file motions to remand, which, along with the summary judgment motions, would be heard in early February.9 Cliffs then filed a motion asking this Court to stay the Section 560 action pending the resolution of the antitrust case in the district court, or, in the alternative,

to certify four questions of Minnesota state law to the Minnesota Supreme Court.10 The Mesabi Parties filed a motion to abstain and remand back to the trial court in Minnesota from which the case had been removed.11 The parties informally agreed that the Court should hear argument on those motions, and hold the pending summary judgment motion in abeyance. For the reasons described below, this Court will abstain from hearing the case

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CLEVELAND-CLIFFS MINNESOTA LAND DEVELOPMENT LLC et v. MIRANDA MINERAL RESOURCES, LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cleveland-cliffs-minnesota-land-development-llc-et-v-miranda-mineral-deb-2025.