Severstal Dearborn, LLC v. Praxair, Inc.

899 F. Supp. 2d 667, 2012 WL 4476619, 2012 U.S. Dist. LEXIS 139338
CourtDistrict Court, E.D. Michigan
DecidedSeptember 27, 2012
DocketCase No. 11-12211
StatusPublished

This text of 899 F. Supp. 2d 667 (Severstal Dearborn, LLC v. Praxair, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Severstal Dearborn, LLC v. Praxair, Inc., 899 F. Supp. 2d 667, 2012 WL 4476619, 2012 U.S. Dist. LEXIS 139338 (E.D. Mich. 2012).

Opinion

OPINION AND ORDER DENYING DEFENDANT PRAXAIR’S MOTION FOR PARTIAL SUMMARY JUDGMENT [34]

NANCY G. EDMUNDS, District Judge.

Before the Court is Defendant Praxair, Inc’s motion for partial summary judgment on Plaintiff Severstal Dearborn, LLC’s claims for incidental, consequential, indirect, and special damages. (Dkt. 34.) Having reviewed the pleadings, the Court finds that a hearing is unnecessary and disposes of one pursuant to Eastern District of Michigan Local Rule 7.1(f)(2). Because the Court finds that Defendant Praxair is reading the damages provision out of context and offers an incorrect interpretation of that provision, the Court DENIES Defendant’s motion for partial summary judgment.

I. Facts

In September, 2008, Plaintiff Severstal and Defendant Praxair entered into an Oxygen, Nitrogen, Hydrogen and Argon Supply Agreement (the “agreement”). (Compl. ¶ 8.) Under the agreement, Defendant Praxair was required to sell and deliver gases into Plaintiff Severstal’s distributing systems. (Id. ¶ 9.)

Plaintiff Severstal states that it “owns and operates steelmaking operations in Dearborn, Michigan, where it produces hot and cold rolled and coated steel products for a number of industries, including the automotive industry.” (Pl.’s Resp. at 3.) Plaintiff Severstal further represents that the gases it receives from Defendant Praxair are “critical to the steelmaking process.” (Id.)

Defendant Praxair explains its operations at its Ecorse facility, where the incident giving rise to this litigation took place:

[The] Ecorse facility takes in air from the atmosphere and, through a complex cryogenic distillation process, produces valuable industrial gases such as oxygen and nitrogen. Because of the heat generated by process equipment, the plant needs thousands of gallons of cooling water per minute to assist in producing the gases supplied under the [a]greement. The cooling water is drawn from the Detroit River. [The water] is pumped from and returned to the river through two roughly 1,000-foot long, 42" diameter pipes buried underneath a bulk materials storage lot operated by Detroit Bulk Storage[.] The 42" river water pipes then enter [Defendant] Praxair’s property and supply the Ecorse [flacility.

(PL’s Mot. for Partial Summ. J. at 2.) Defendant Praxair then gives its account of what has prompted this case:

[669]*669On January 28, 2011, a large pile of road salt weighing many thousands of tons stored on the Detroit Bulk Storage property next to Praxair’s Ecorse facility caused a violent shift of the land beneath and near the pile. The land subsided and severed Praxair’s cooling water pipes and an electric conduit running underground alongside the pipes.

(Pl.’s Mot. at 2.) When the pipes were cut, Defendant Praxair states that it lost its cooling water supply, which significantly impaired “its ability to supply oxygen and nitrogen to its customers, including Severstal.” (Id.) Defendant Praxair then states it declared a “contingency,” pursuant to and defined in Article 19 of the agreement. (Id.) Defendant Praxair represents that it repaired the damaged pipes and ended the Article 19 contingency in March, 2012. 1 (Id.)

Plaintiff Severstal states that, without the gases from Defendant Praxair, it was forced to “take extraordinary emergency measures to prevent a catastrophic loss of property, and avoid potentially deadly hazards to its workers.” (Id.) Plaintiff Severstal adds that the gas shutdown “affected almost every aspect of its operations.” (Id.) The shutdown, Plaintiff Severstal maintains, resulted in substantial loss of work, increased labor costs, and forced Plaintiff Severstal to purchase alternative products from vendors other than Defendant Praxair to keep its plant in operation and avoid a “complete, catastrophic shutdown of its operations.” (Id.) Despite the measures taken, Plaintiff Severstal states that it incurred substantial damages. (Id.) Plaintiff Severstal further states that, under the agreement, in certain circumstances, a “contingency” provision goes into effect and Defendant Praxair may then charge “supplemental” prices for delivered gases — “prices far above those charged under normal circumstances.” (Id.) Plaintiff Severstal alleges that Defendant Praxair charged it supplemental charges that approached $4 million that were not authorized under the agreement. (Id.)

On April 15, 2011, Plaintiff Severstal filed its breach of contract complaint against Defendant Praxair in Michigan state court. (Dkt. 1, Notice of Removal, Ex. A, Compl.) On May 20, 2011, Defendant Praxair removed the case. (Id.)

II. Summary judgment standard

“The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). A moving party may meet that burden “by ‘showing’ — that is, pointing out to the district court — that there is an absence of evidence to support the nonmoving party’s case.” Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Revised Rule 56 expressly provides that:

A party asserting that a fact cannot be or is genuinely disputed must support the assertion by:
(A) citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials; or
[670]*670(B) showing that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact.

Fed.R.Civ.P. 56(c)(1). The revised Rule also provides the consequences of failing to properly support or address a fact:

If a party fails to properly support an assertion of fact or fails to properly address another party’s assertion of fact as required by Rule 56(c), the court may:
(1) give an opportunity to properly support or address the fact;
(2) consider the fact undisputed for purposes of the motion;
(3) grant summary judgment if the motion and supporting materials — including the facts considered undisputed — show that the movant is entitled to it; or

(4) issue any other appropriate order. Fed.R.Civ.P. 56(e). “The court need consider only the cited materials, but it may consider other materials in the record.” Fed.R.Civ.P. 56(c)(3).

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Bluebook (online)
899 F. Supp. 2d 667, 2012 WL 4476619, 2012 U.S. Dist. LEXIS 139338, Counsel Stack Legal Research, https://law.counselstack.com/opinion/severstal-dearborn-llc-v-praxair-inc-mied-2012.