Terra Intern., Inc. v. Mississippi Chemical Corp., C 95-4088.

• Decision Date: 05 September 1995
• Docket Number: No. C 95-4088.,C 95-4088.
• Citation: 896 F. Supp. 1468
• Court: U.S. District Court — Northern District of West Virginia
• Parties: TERRA INTERNATIONAL, INC., a Delaware corporation, Plaintiff, v. MISSISSIPPI CHEMICAL CORPORATION, a Mississippi corporation, Defendant.

896 F. Supp. 1468

TERRA INTERNATIONAL, INC., a Delaware corporation, Plaintiff, v. MISSISSIPPI CHEMICAL CORPORATION, a Mississippi corporation, Defendant.

No. C 95-4088.

United States District Court, N.D. Iowa, Western Division.

September 5, 1995.

George Zelcs of Clausen Miller, P.C., Chicago, IL, Jonathan Jay of Zelle & Larson, Dallas, TX, Gregg Williams of Heidman, Redmond, Fredregill, Patterson, Schatz & Plaza, L.L.P., Sioux City, IA, George Valentine, General Counsel and Ryan Crane, Sioux City, IA, for Terra Intern., Inc.

Steve Eckley and Randy Duncan of Duncan, Green, Brown, Langeness & Eckley, P.C., Des Moines, IA, Bill Smith of Brunini, Grantham, Grower & Hewes, P.L.L.C., of Jackson, MS, and Jay Borgfeld, General Counsel, Jackson, MS, for Mississippi Chemical Corp.

MEMORANDUM OPINION AND ORDER REGARDING PLAINTIFF'S MOTION FOR TEMPORARY RESTRAINING ORDER

BENNETT, District Judge.

This diversity litigation arises from the catastrophic explosion of a fertilizer plant in northwest Iowa on December 13, 1994, in which four persons were killed, eighteen were injured, and the fertilizer plant sustained enormous damage. Plaintiff here, the owner and operator of the fertilizer plant, has brought suit against the designer and licensor of its ammonium nitrate neutralizer alleging negligence and strict liability causes of action to recover damages resulting from the explosion. Plaintiff has moved to enjoin the prosecution of parallel litigation that has been filed by the defendant in federal court in Mississippi.

I. INTRODUCTION AND BACKGROUND

This lawsuit, filed on August 31, 1995, at 12:35 p.m., arises from the explosion of plaintiff Terra International's fertilizer plant in Port Neal, Iowa, on December 13, 1994. The Port Neal facility is located approximately eight miles south of Sioux City, but the explosion rattled windows and shook the ground throughout Sioux City. In the explosion, four persons were killed, eighteen were injured, and the Terra plant sustained substantial damage.¹ The explosion left a huge crater at the ammonium nitrate plant portion of the Terra facility and much of the rest of the facility was leveled. Terra's Port Neal facility has not operated since the explosion and Terra officials estimate that the losses resulting from the explosion will exceed $200 million.

Apart from the massive search and rescue operations initiated immediately after the explosion, the destruction of the Port Neal facility has engendered extensive investigation. Terra formed its own Investigation Committee comprised of outside consultants and internal personnel, and the Iowa Occupational Safety and Health Administration (IOSHA) also conducted an extensive investigation over several months, as did the State Fire Marshal. Evidence from the blast has been collected, catalogued, and stored in a secure warehouse, known as the "Evidence Warehouse," near Sioux City. Terra has produced a report on the explosion laying most of the blame for the incident at MCC's door.

Terra, the plaintiff in this lawsuit, is a Delaware corporation with its principal place of business in Sioux City, Iowa. Defendant Mississippi Chemical Corporation (MCC), is a Mississippi corporation with its principal place of business in Yazoo City, Mississippi. MCC is a manufacturer and distributor of chemical fertilizer products. For the last several decades, MCC has also developed and licensed fertilizer manufacturing technology for use by customers worldwide. The complaint in this matter alleges that MCC is recognized as an industry leader in the design of ammonium nitrate neutralization processes and equipment and that Terra received a license from MCC to build such a neutralizer in its Port Neal plant. MCC allegedly provides engineering services related to the installation, start-up technical instruction and guidance, maintenance, and inspection services for licensed facilities worldwide and provided such services to Terra for the Port Neal plant.

Count I of the present lawsuit, a negligence cause of action, alleges that MCC breached a duty of care and caution in designing the MCC technology for use by Terra, and in providing guidance and services to ensure that the technology would be reasonably safe.² Count II alleges strict liability of MCC on the grounds that the design of the MCC technology was unreasonably dangerous and defective, that these conditions were unknown to Terra, and that these conditions were the proximate cause of the December 13, 1994, explosion.³ On both counts, Terra seeks damages in an unspecified amount in excess of $50,000, an award of all costs, prejudgment and postjudgment interest, and such other and further relief as the court may deem just and proper. Jurisdiction in this lawsuit is founded on diversity of citizenship of the parties pursuant to 28 U.S.C. § 1332, and venue is alleged under 28 U.S.C. § 1391(a) and (c) in that a substantial part of the events or omissions giving rise to the claims occurred in Woodbury County, Iowa, or a substantial part of the property that is the subject of this action is situated in this judicial district, and the defendant is subject to personal jurisdiction and/or resides in this judicial district.

Before filing the present lawsuit, Terra provided a courtesy copy of its complaint to MCC by sending it Federal Express on August 30, 1995, for next morning delivery. As the court noted above, this lawsuit was filed on August 31, 1995, at 12:35 p.m. Later that same afternoon, MCC also filed suit against Terra in the United States District Court for the Southern District of Mississippi, Western Division. In MCC's lawsuit, Mississippi Chem. Corp. v. Terra Int'l, Inc., No. 5:95CV127 (S.D.Miss.), in Count I, MCC seeks declaratory relief that MCC "did not defectively design the neutralizer at the center of the Port Neal explosion ... and is not liable to Terra for damages arising from the explosion under any theory of recovery."⁴ In Count II, MCC seeks damages, alleging that Terra's incident investigation committee report, a July 17, 1995, press release, and an address given by Mark Rosenbury, a Terra vice president, were defamatory of MCC.⁵ MCC alleges significant loss of business as the result of Terra's allegedly defamatory communications.

As the result of the filing of MCC's lawsuit in Mississippi, Terra has moved for an emergency temporary restraining order (TRO) in this court to enjoin the prosecution of the litigation between the parties brought by MCC in the Mississippi federal court. The court was notified of Terra's intent to file such a request by telephone on September 1, 1995, and set hearing in this matter for September 5, 1995. The court received the written request for a TRO on Labor Day, September 4, 1995. Also on Labor Day, the court held extensive discussions with counsel for both parties by telephone conference call including a preliminary discussion of the merits of Terra's application for a TRO, or at least identification of the parties' relative positions concerning such a TRO, and matters concerning the scheduling of a hearing on the TRO.⁶ During these discussions, it appeared that the parties might agree to entry of a TRO by consent. However, at the hearing on Terra's application for a TRO on September 5, 1995, the parties indicated that they could not agree to a TRO by consent. Therefore, Terra once again asserted its desire for the court to rule on its application for a TRO.

The court held the hearing on Terra's application for a TRO on September 5, 1995, at 12:43 p.m. All parties appeared by telephone. Terra was represented by counsel George Zelcs of Clausen Miller, P.C., in Chicago, Illinois, and Jonathan Jay of Zelle & Larson, in Dallas, Texas, and by local counsel local counsel Gregg Williams of Heidman, Redmond, Fredregill, Patterson, Schatz & Plaza, L.L.P., in Sioux City, Iowa. Also present on behalf of Terra were George Valentine, General Counsel for Terra, and Ryan Crane. MCC was represented by its local counsel, Steve Eckley and Randy Duncan of Duncan, Green, Brown, Langeness & Eckley, P.C., in Des Moines, Iowa, and by Jay Borgfeld, General Counsel for MCC, and attorney Bill Smith, both of Jackson, Mississippi. The court has appreciated the professionalism of all counsel in preparing this matter for hearing.

II. LEGAL ANALYSIS

A. Terra's Application For A Temporary Restraining Order

Rule 65 of the Federal Rules of Civil Procedure provides for temporary restraining orders and preliminary injunctions as follows:

Every order granting an injunction and every restraining order shall set forth the reasons for its issuance; shall be specific in terms; shall describe in reasonable detail, and not by reference to the complaint or other document, the act or acts sought to be restrained; and is binding only upon the parties to the action, their officers, agents, servants, employees, and attorneys, and upon those persons in active concert or participation with them who receive actual notice of the order by personal service or otherwise.

Fed.R.Civ.P. 65(d).⁷ Ordinarily, the grant or denial of a temporary restraining order or preliminary injunction in this circuit is determined upon consideration of the factors stated in Dataphase Sys., Inc. v. CL Sys., Inc., 640 F.2d 109, 113 (8th Cir.1981) (en banc).⁸ However, the Eighth Circuit Court of Appeals has held that when considering the merits of the sort of TRO or injunction involved here, "i.e., orders enjoining a party from proceeding with a duplicative, second-filed lawsuit in another forum," such TROs or preliminary injunctions "are not subject to the Dataphase standards for injunctive relief." Northwest Airlines, Inc. v. American Airlines, Inc., 989 F.2d 1002, 1004 (8th Cir. 1993) (emphasis added); see also Boatmen's First Nat'l Bank of Kansas City v. Kansas Pub. Employees Retirement Sys., 57 F.3d 638, 641 (8th Cir.1995) (citing Northwest Airlines). The court in Northwest Airlines reasoned as follows:...