Veolia Water N. Am. Operations Servs., LLC v. SSAB Ala., Inc.
| Decision Date | 24 June 2019 |
| Docket Number | Case No.: 2:15-cv-02073-JEO |
| Citation | 398 F.Supp.3d 1150 |
| Parties | VEOLIA WATER NORTH AMERICA OPERATIONS SERVICES, LLC, Plaintiff/Counter-Defendant, v. SSAB ALABAMA, INC., Defendant/Counter-Plaintiff. |
| Court | U.S. District Court — Northern District of Alabama |
Anthony Lane Morrison, Lee M. Hollis, Wesley B. Gilchrist, Lightfoot, Franklin & White, LLC, Birmingham, AL, Joseph P.H. Babington, Patrick C. Finnegan, Helmsing Leach Herlong Newman & Rouse PC, Colin Armstrong Sigler, Mobile, AL, for Plaintiff/Counter-Defendant.
Christopher A. Arledge, Frank Garrison Taylor, Donald G. Beebe, The Atchison Firm, PC, Mobile, AL, for Defendant/Counter-Plaintiff.
This litigation began in November 2015, when Plaintiff/Counter-Defendant Veolia Water North America Operations Services, LLC ("Veolia") sued Defendant/Counter-Plaintiff SSAB Alabama, Inc. ("SSAB") for its alleged anticipatory breach of a Process Water Agreement (the "Agreement") under which Veolia owned and operated a process water facility that serves a steel mill owned by SSAB.1 (Doc. 1).2 Currently before the court is Veolia's motion for summary judgment with respect to SSAB's remaining counterclaims. (Doc. 130). The motion has been fully briefed, (docs. 131, 135, 136), and is now ripe for decision. For the following reasons, the court3 concludes that the motion is due to be granted.
In its complaint, Veolia alleged that SSAB exercised its contractual option to terminate the Agreement and take title to the process water facility, but indicated its intent not to pay Veolia a $6 million termination fee required under the Agreement. (Doc. 1). Veolia sought an order directing SSAB to pay the $6 million termination fee. (Id. ). SSAB answered the complaint and expressly denied any breach or anticipatory repudiation of the Agreement. (Doc. 21). SSAB also counterclaimed against Veolia, requesting a declaratory judgment that it was entitled to a set-off against the termination fee due to Veolia's alleged inability and failure to perform under the Agreement. (Id. )
On December 18, 2015, the court entered a consent order requiring SSAB to pay the $6 million termination fee to Veolia and requiring Veolia to post a $6 million surety bond to protect SSAB in the event it proved a right and entitlement to a set-off under the Agreement. (Doc. 39). The consent order also provided that "[t]he payment of the $6 million Termination Fee by SSAB, the posting of the Bond by Veolia, and the transfer of [the process water facility] to SSAB shall be without prejudice to any claim, defense or right of any party ... all of which shall be reserved." (Id. at ¶ 4). SSAB paid the termination fee on December 31, 2015, and Veolia posted the surety bond as ordered. (See Doc. 40).
SSAB subsequently filed an amended counterclaim against Veolia. (Doc. 58). In its amended counterclaim, SSAB alleges that Veolia owes it "at least $11,363,335.00" for the additional costs SSAB incurred as a result of Veolia's alleged "inability and failure to properly regulate and treat" the water generated by SSAB's steel mill. (Id. at ¶ 4). The amended counterclaim contains claims for negligence, breach of contract, breach of warranty/guarantee, and declaratory judgment. (Id. at 3-7).
Shortly after answering the amended counterclaim, (doc. 67), Veolia moved for summary judgment on the amended counterclaim, advancing seven separate arguments4 for why summary judgment should be granted in its favor. (Docs. 68 & 71). In response, SSAB conceded that its claim for negligent breach of contract was due to be dismissed. (See Doc. 89 at 17). Additionally, upon agreement of the parties, the court decided to address four of the remaining six arguments and hold two arguments in abeyance to be renewed after discovery. (Docs. 93, 97). As for the four arguments addressed by the court, the court granted the motion as to the negligence claim and claim for declaratory judgment. (Docs. 97-98). The court also granted the motion to the extent that the amended counterclaim sought the recovery of damages relating to waste disposal costs. (Id. ). The court denied summary judgment on the other two grounds and specifically allowed Veolia to reassert its remaining arguments at a later time. (Id. ). That time is now.5
Pursuant to Rule 56 of the Federal Rules of Civil Procedure, a party is authorized to move for summary judgment on a claim or defense asserted by or against the movant. Under that rule, 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. Pro. 56(a). "Disposition of a summary judgment motion in a declaratory judgment action is governed by the same basic principles that generally rule the grant or denial of such a motion." Bingham, Ltd. v. United States , 724 F.2d 921, 924 (11th Cir. 1984).
The party moving for summary judgment "always bears the initial responsibility of informing the district court of the basis for its motion," relying on submissions "which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ; see also Clark v. Coats & Clark, Inc. , 929 F.2d 604, 608 (11th Cir. 1991) ; Adickes v. S.H. Kress & Co. , 398 U.S. 144, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970). Where the movant will not bear the burden of proof on a claim or issue at trial, the movant can satisfy that burden by pointing to specific portions of the materials on file that either negate an essential element of the non-movant's claim or that affirmatively indicate "that the party bearing the burden of proof at trial will not be able to meet that burden." Clark , 929 F.2d at 608 ; see also United States v. Four Parcels of Real Prop. in Greene & Tuscaloosa Ctys. in State of Ala. , 941 F.2d 1428, 1438 n. 19 (11th Cir. 1991). By contrast, when the moving party has the burden of proof at trial, it must support its motion with credible evidence that would entitle it to a directed verdict if not controverted at trial. See Four Parcels , 941 F.2d at 1438. "In other words, the moving party must show that, on all the essential elements of its case on which it bears the burden of proof at trial, no reasonable jury could find for the nonmoving party." Id.
Once the moving party has met its initial burden, the nonmoving party must "go beyond the pleadings" and refer the court to evidence demonstrating that there is a genuine issue for trial. Celotex Corp. , 477 U.S. at 324, 106 S.Ct. 2548. In its review of the evidence, a court must credit the evidence of the non-movant and draw all justifiable inferences in the non-movant's favor. See Stewart v. Booker T. Washington Ins. , 232 F.3d 844, 848 (11th Cir. 2000). At summary judgment, "the judge's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
In 1999, SSAB began construction of a steel mill in Mobile County, Alabama. In July 1999, while the mill was under construction, SSAB and Veolia entered into the Agreement, pursuant to which Veolia agreed to construct a process water facility (the "Facility") to treat the water that would be circulated and discharged during the production of steel at the mill. (Agreement § 3).7 The Agreement provided that Veolia would own the Facility and would "operate, maintain and repair" the Facility so as to provide SSAB with treated water meeting certain specifications. (Id. §§ 2.4-2.5, 6.1(1)(a)). SSAB was responsible for "[t]he costs of all off-site treatment and disposal of solid or other waste produced by the ... Facility." (Id. § 4.4(2)).
SSAB's counterclaims involve Veolia's treatment of process water from SSAB's rolling mill contact cooling water system. In the rolling mill, contact cooling water is sprayed at high pressure onto the steel slabs to remove mill scale8 from their surfaces and then circulated through various parts and equipment in the rolling mill to cool the slabs. (Deposition of Scott Kelley on 8/16/18 ("Kelley Dep. I") at 63-64).9 Afterwards, the rolling mill's contact cooling water goes to the process water facility so it can be treated. Water that contains mill scale exits the rolling mill through a flume. (Id. at 70). The water then enters a pre-sedimentation pit where the heaviest solids settle out of the water. (Id. at 70-71; Schubert Dep. at 51). The water is pumped from the pre-sedimentation pit into two secondary pits where smaller solids settle out.10 (Kelley Dep. I at 72; Schubert Dep. at 52). From that point, the water collects in the secondary pit "hot well" where it is pumped by three pumps, collectively called the "612 pumps," to a header which distributes the water to ten pressure filters. (Kelley Dep. I at 73, 267). The water flows from the top of the filter through sand and gravel media that further collect fine solids from the water. (Schubert Dep. at 148-49). The resulting water is then pumped to cooling towers where the cooled water is collected in a cold well and then either pumped back to the rolling mill for reuse or discharged to the Mobile River. (Kelley Dep. I at 74; see also Agreement § 1.1).
The steel mill and the Facility began operations in 2001. (Doc. 12 ¶ 22). Shortly thereafter, disputes arose between the parties. Among other issues, Veolia asserted a claim against SSAB for certain costs it had incurred during the construction of the Facility and a claim for increased operation and maintenance costs. SSAB, in turn, claimed that Veolia had failed to meet the requirements of the...
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