Great Lakes Gas Transmission Limited Partnership v. Essar Steel Minnesota, LLC, 010516 MNDC, 09-cv-3037 (SRN/LIB)

Docket Nº09-cv-3037 (SRN/LIB)
Opinion JudgeSUSAN RICHARD NELSON, UNITED STATES DISTRICT JUDGE
Party NameGreat Lakes Gas Transmission Limited Partnership, Plaintiff, v. Essar Steel Minnesota, LLC; Essar Steel Limited f/k/a Essar Steel Holdings, Ltd.; Essar Steel India Limited f/k/a Essar Steel Limited; and Essar Global Fund Ltd. f/k/a Essar Global Limited, Defendants.
AttorneyBrian A. Farlow, Hayley Ellison, Worthy W. Walker, Barbara L. Wohlrabe, and David W. Elrod, Elrod PLLC, David T. Schultz and Julian C. Zebot, Maslon LLP, for Plaintiff. Douglas H. Flaum, Kevin P. Broughel, and Shahzeb Lari, Paul Hasting LLP, Lousene M. Hoppe and Nicole M. Moen, Fredrikson & Byron...
Case DateJanuary 05, 2016
CourtUnited States District Courts, 8th Circuit, District of Minnesota

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 Limited f/k/a Essar Steel Limited; and Essar Global Fund Ltd. f/k/a Essar Global Limited, Defendants.

No. 09-cv-3037 (SRN/LIB)

United States District Court, D. Minnesota

January 5, 2016

Brian A. Farlow, Hayley Ellison, Worthy W. Walker, Barbara L. Wohlrabe, and David W. Elrod, Elrod PLLC, David T. Schultz and Julian C. Zebot, Maslon LLP, for Plaintiff.

Douglas H. Flaum, Kevin P. Broughel, and Shahzeb Lari, Paul Hasting LLP, Lousene M. Hoppe and Nicole M. Moen, Fredrikson & Byron, PA, Thomas R. Thibodeau and David M. Johnson, Thibodeau Johnson & Feriancek, PLLP, for Defendants.

MEMORANDUM OPINION AND ORDER

SUSAN RICHARD NELSON, UNITED STATES DISTRICT JUDGE

This matter is before the Court on Defendant Essar Steel Minnesota, LLC’s (“ESML”) Motion for New Trial (“Motion”) [Doc. No. 980]. For the reasons that follow, ESML’s Motion is denied.

I. BACKGROUND

A. Factual Background

The factual history of this case, which is entering its sixth year of litigation, is extensively recounted in the prior opinions and orders of this Court. It is briefly summarized here.

In short, this case arises from a contract (“Contract”) dated September 6, 2006, between Great Lakes (“Plaintiff” or “Great Lakes”) and Minnesota Steel Industries (“MSI”), which became effective on November 30, 2006. (Ellison Aff., Ex. 2 “Contract” [Doc. No. 681-2].) The Contract required Great Lakes to transport up to 55, 000 dekatherms of natural gas per day on MSI’s behalf. (Id.) The Contract, otherwise known as the Transportation Services Agreement (“TSA”), was to govern the parties’ relationship from 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.) In addition, MSI was obligated to pay all applicable surcharges. (Id.) The Contract was secured by a letter of credit in the amount of $580, 000. (Countercl. at ¶ 37 [Doc. No. 80]; Letter of Credit, Ex. C to Countercl. [Doc. No. 80-3].)

In 2007, ESML acquired the membership interests of MSI and its assets and liabilities. (First Am. Answer at ¶ 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”) (collectively with ESML, “Defendants”). In October 2009, Great Lakes filed this breach of contract 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. (First Am. Compl. at ¶¶ 20, 52 [Doc. No. 35].)1

B. Procedural Background

An award of future damages must be reduced to present value. This is regularly done by calculating and then applying a discount rate to those damages. A jury trial on the limited issue of the appropriate discount rate to apply to Great Lakes’ future damages under the Contract2 to bring them to present value was held from August 17, 2015 through August 19, 2015 in Duluth, Minnesota. The trial consisted almost exclusively of the testimony of Great Lakes’ expert, Dr. Lawrence Kolbe (“Kolbe”). Defendants cross-examined Kolbe and introduced some exhibits, but did not offer any witnesses of their own.3 The jury found the appropriate discount rate to be 4.30%. (Special Verdict Form dated August 19, 2015 [Doc. No. 970].) However, much of ESML’s Motion centers around an issue decided immediately preceding trial.

Just five days before trial, and one day before the scheduled pre-trial conference, Defendants, for the first time, asked that the Court decide as a matter of law whether the discount rate should be calculated on a pre-tax or post-tax basis. (Letter from Defendants to Court dated 8/12/2015 [Doc. No. 944].)4 Defendants claimed this issue had only recently come to their attention during the deposition of Mr. George Chan (“Chan”), an individual involved with Great Lakes’ tax preparations. (See Doc. No. 944 at 1.) According to Defendants, any discount rate must be calculated on a pre-tax basis to avoid an alleged “double recovery” by Great Lakes because the scheduled payments under the TSA already accounted for the taxes Great Lakes would pay on that revenue. (See id. at 1-2.) In response, Great Lakes agreed that the issue could be resolved as a matter of law. (Letter from Plaintiff to Court dated August 12, 2015 [Doc. No. 946].) However, Great Lakes argued that basic principles of economic finance required that a discount rate be calculated on a post-tax basis and there was absolutely no risk of a double recovery using this approach. (See Doc. No. 946 at 1.)

At the pre-trial conference the following day, the parties presented additional argument on the pre versus post-tax issue, but the Court elected to defer ruling on the matter until it had a chance to review the record more thoroughly and potentially receive more evidence and argument. (See Pretrial Hearing Tr. dated August 13, 2015 (“Pretrial Conf. Tr.”) at 20:20-31:10, 32:14-33:19 [Doc. No. 954].) Subsequently, the parties each submitted additional letter briefing on the issue. (See Letter from Plaintiff to Court dated August 14, 2015 [Doc. No. 949]; Letter from Defendants to Court dated August 14, 2015 [Doc. No. 950]; Second Letter from Plaintiff to Court dated August 14, 2015 [Doc. No. 951].) Ultimately, the Court ordered a preliminary hearing on the pre versus post-tax calculation of the discount rate to be held just before voir dire. (See Order dated August 16, 2015 [Doc. No. 956].) Great Lakes was ordered to produce Kolbe to testify on this issue and be cross-examined, and both parties were permitted to introduce previously disclosed exhibits, including the deposition testimony of Chan, to the extent Kolbe or counsel for either party relied on them. (See Doc. No. 956 at 2-3.) After the preliminary hearing was held (see Jury Trial Tr. (Vol. 1) dated August 17, 2015 at 4:5-85:1 [Doc. No. 967]), the Court ruled as a matter of law that the discount rate would be calculated on a post-tax basis, (see id. at 89:2-7).

Defendants now ask for a new trial. (See Motion.) Defendants allege that the Court committed or allowed numerous errors, many related to events that occurred during the preliminary hearing on the pre versus post-tax issue. (See ESML’s Memorandum of Law in Support of Motion for New Trial (“Memo.”) [Doc. No. 982].) Great Lakes filed a timely response, (Plaintiff’s Memorandum in Opposition to ESML’s Motion (“Resp.”) [Doc. No. 1008]), to which Defendants replied, (ESML’s Reply Memorandum of Law (“Reply”) [Doc. No. 1013]).

II. DISCUSSION

A. Legal Standard for New Trial Motions

Federal Rule of Civil Procedure 59(a) allows the Court to grant a new trial on the motion of a party. Whether or not to grant a new trial is almost entirely at the discretion of the trial court. Allied Chem. Corp. v. Daiflon, Inc., 449 U.S. 33, 36 (1980); Tedder v. Am. Railcar Indus., Inc., 739 F.3d 1104, 1110 (8th Cir. 2014). In exercising this discretionary power, the function of the jury is not to be trivialized. Christian v. Wagner, 611 F.Supp.2d 958, 963 (S.D. Iowa 2009) aff'd, 623 F.3d 608 (8th Cir. 2010). A jury’s verdict should be disturbed only “to prevent a miscarriage of justice.” Beckman v. Mayo Found., 804 F.2d 435, 439 (8th Cir. 1986). “Where the subject matter of the litigation is simple; where there exists no complicated evidence or where the legal principles presented are such that they would not confuse the jury, the court should be reluctant to grant a new trial.” White v. Pence, 961 F.2d 776, 781 (8th Cir. 1992) (quotations omitted).

Relevant to the present matter, a motion for a new trial may be premised on a claim that the trial was not fair to the moving party “and may raise questions of law arising out of alleged substantial errors in admission or rejection of evidence or instructions to the jury.” Children's Broad. Corp. v. Walt Disney Co., 245 F.3d 1008, 1017 (8th Cir. 2001) (quoting Montgomery Ward & Co. v. Duncan, 311 U.S. 243, 251 (1940)). However, the errors alleged must be prejudicial such that “in all probability [they] produced some effect on the jury's verdict and [were] harmful to the substantial rights of the party assigning [them].” Warger v. Shauers, 721 F.3d 606, 609 (8th Cir. 2013) cert. granted, 134 S.Ct. 1491 (2014) and aff'd, 135 S.Ct. 521 (2014). Only when such prejudicial error(s) occurs is there a miscarriage of justice necessitating a new trial. Trickey v. Kaman Indus. Technologies Corp., 705 F.3d 788, 807 (8th Cir. 2013). A new trial will not be had to simply re-litigate old issues. Matter of Aaron Ferer & Sons Co., 427 F.Supp. 350, 352 (D. Neb. 1977). The burden of showing prejudicial error sufficient to warrant a new trial is thus a heavy one. Hansen v. Barrett, 186 F.Supp. 527, 532 (D. Minn. 1960); Prestidge v. Minster Mach. Co., No. CIV. 4-81-833, 1986 WL 6634, at *1 (D. Minn. June 3, 1986).

Defendants contend that “[t]he jury’s verdict in this case was the result of numerous evidentiary and legal errors that collectively steered the jury to adopt the discount rate advocated by [Great Lakes].” (Memo. at 1.)5 Specifically, Defendants highlight five areas of alleged error: (1) rulings which limited their...

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