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NIPSCO v. Carbon County: Difference between revisions
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{{Infobox Case Brief | {{Infobox Case Brief | ||
|court=7th Circuit | |court=7th Circuit | ||
|citation=799 F.2d 265 | |||
|date=August 13, 1986 | |||
|subject=Contracts | |subject=Contracts | ||
|facts=*Northern Indiana Public Service Co. = "NIPSCO" = plaintiff = coal buyer = electric utility company | |||
*Carbon County Coal Co. (Carbon County) = coal mine company = company with a Wyoming coal mine on federal land = coal seller | |||
*In 1978, the 2 parties contracted for NIPSCO to receive 1,500,000 (1.5 million) tons of coal/year for 20 years. | |||
*The 2 parties agreed on $24/ton of coal subject to change. | |||
*The contract included a ''force majeure'' clause. | |||
*Coal prices went up: | |||
{{Timeline|$24/ton of coal|1978|1985|$44/ton of coal}} | |||
*NIPSCO found a cheaper source of electricity; so, NIPSCO suspended the coal shipments from Carbon County. | |||
|procedural_history=* NIPSCO sued Carbon County in federal court in Indiana seeking a declaratory judgment that NIPSCO was excused from buying coal from Carbon County under the ''force majeure'' clause. | |||
* NIPSCO lost. | |||
* The jury awarded Carbon County $181,000,000 (181 million). | |||
* | |||
|issues=#Does monetary loss resulting from economic risk-taking | |||
#*constitute a force majeure or | |||
#*satisfy the doctrines of | |||
#*#frustration of purpose or | |||
#*#impossibility? | |||
#Does the doctrine of illegality automatically void a contract? | |||
|arguments=NIPSCO argued that the contract was un-enforceable because it violated the '''Mineral Lands Leasing Act''' of 1920. https://www.blm.gov/sites/blm.gov/files/MineralLeasingAct1920.pdf | |||
|holding=# No. Monetary loss resulting from economic risk-taking doesn't constitute a ''force majeure'' or satisfy either the doctrines of frustration or impossibility. | |||
# No. The doctrine of illegality doesn't automatically void a contract. | |||
|judgment=Affirmed | |||
|reasons=[[Richard A. Posner]]: The Indiana commission's authorization of the fuel surcharge didn't constitute a ''force majeure'' excusing NIPSCO's performance. | |||
Posner: Also, this wasn't an inherently illegal contract. The Department of Interior & DOJ hadn't objected to Carbon County's mining. | |||
|case_text_links={{Infobox Case Brief/Case Text Link | |case_text_links={{Infobox Case Brief/Case Text Link | ||
|link=https://www.quimbee.com/cases/northern-indiana-public-service-co-v-carbon-county-coal-co | |link=https://www.quimbee.com/cases/northern-indiana-public-service-co-v-carbon-county-coal-co | ||
|source_type=Video summary | |source_type=Video summary | ||
|case_text_source=Quimbee | |case_text_source=Quimbee | ||
}}{{Infobox Case Brief/Case Text Link | |||
|link=https://law.justia.com/cases/federal/appellate-courts/F2/799/265/117938/ | |||
|case_text_source=Justia | |||
}} | |||
|case_videos={{Infobox Case Brief/Case Video | |||
|service=YouTube | |||
|id=9J5fq-985sI | |||
}}{{Infobox Case Brief/Case Video | |||
|service=YouTube | |||
|id=1QkcDzCS9hg | |||
}} | }} | ||
}} | }} | ||
Latest revision as of 04:14, December 16, 2023
| NIPSCO v. Carbon County | |
| Court | 7th Circuit |
|---|---|
| Citation | 799 F.2d 265 |
| Date decided | August 13, 1986 |
Facts
- Northern Indiana Public Service Co. = "NIPSCO" = plaintiff = coal buyer = electric utility company
- Carbon County Coal Co. (Carbon County) = coal mine company = company with a Wyoming coal mine on federal land = coal seller
- In 1978, the 2 parties contracted for NIPSCO to receive 1,500,000 (1.5 million) tons of coal/year for 20 years.
- The 2 parties agreed on $24/ton of coal subject to change.
- The contract included a force majeure clause.
- Coal prices went up:
1978
$24/ton of coal
1985
$44/ton of coal
- NIPSCO found a cheaper source of electricity; so, NIPSCO suspended the coal shipments from Carbon County.
Procedural History
- NIPSCO sued Carbon County in federal court in Indiana seeking a declaratory judgment that NIPSCO was excused from buying coal from Carbon County under the force majeure clause.
- NIPSCO lost.
- The jury awarded Carbon County $181,000,000 (181 million).
Issues
- Does monetary loss resulting from economic risk-taking
- constitute a force majeure or
- satisfy the doctrines of
- frustration of purpose or
- impossibility?
- Does the doctrine of illegality automatically void a contract?
Arguments
NIPSCO argued that the contract was un-enforceable because it violated the Mineral Lands Leasing Act of 1920. https://www.blm.gov/sites/blm.gov/files/MineralLeasingAct1920.pdf
Holding
- No. Monetary loss resulting from economic risk-taking doesn't constitute a force majeure or satisfy either the doctrines of frustration or impossibility.
- No. The doctrine of illegality doesn't automatically void a contract.
Judgment
Affirmed
Reasons
Richard A. Posner: The Indiana commission's authorization of the fuel surcharge didn't constitute a force majeure excusing NIPSCO's performance.
Posner: Also, this wasn't an inherently illegal contract. The Department of Interior & DOJ hadn't objected to Carbon County's mining.
