United States Court of Appeals for the Seventh Circuit - 799 F.2d 265
In the 1986 case, Northern Indiana Public Service Co. v. Carbon County Coal Co., a utility company sued a coal supplier for breaking a contract over coal sale and purchase. The company claimed they were allowed to stop performing their duties under the contract because of changes that made performing impossible.
The utility company explained that they agreed to buy 1.5 million tons of coal per year for 20 years from the supplier, but due to new regulations and market conditions, they were ordered to buy cheaper electricity and use less coal in 1982.
The coal supplier argued that the utility company broke the contract by not paying for the coal and deserved damages. The trial court sided with the coal supplier and awarded them $181 million. The utility company appealed, but the court ruled in favor of the coal supplier.
The court found that under Indiana law, a defense called commercial impracticability could only be used if an unexpected event made performance too difficult or unfair. The court believed the company hadn't proved this since they assumed the risk when they signed the long-term contract.
The case shows how courts use state law and contract principles to understand contracts and balance justice and fairness with respecting the parties' autonomy. It also emphasizes the need for good faith and fair dealing in commercial transactions.
NIPSCO and Carbon County Coal Company are in a legal dispute over a coal sale and purchase contract. NIPSCO filed a diversity suit against Carbon County, requesting a declaration that it was relieved of its obligations under the contract. Carbon County filed a counterclaim for breach of contract, resulting in a jury verdict for Carbon County of $181 million. The issues left to decide include whether the contract violated the Mineral Lands Leasing Act, whether NIPSCO's obligations were excused by force majeure, frustration, or impracticability, whether Carbon County was entitled to specific performance, and whether NIPSCO should post a bond to stay the execution of the damage judgment during the appellate process. The district judge's decision to refuse to postpone the trial was not an abuse of discretion, and the denial of a continuance was not reversible error. The district judge did not abuse their broad discretion in the management of litigation, and there is nothing to criticize in the speed with which the big case was brought to judgment. The Mineral Lands Leasing Act of 1920, Section 2(c) prohibits a common-carrier railroad company from holding a permit or lease for coal deposits on federal lands, except for its own use for railroad purposes. The interpretation of whether this provision applies to a railroad's affiliate is a matter of debate. The Department of Interior adopted the interpretation that it applies to affiliates, but only for future cases. The case law on this issue is limited. The purpose of section 2(c) was to prevent railroads from discriminating against competing coal mines that relied on rail transportation. The language and history of the section suggest that it may only apply to alter egos. The obsolescence of the monopoly concerns that led to the passage of section 2(c) in 1920, as well as the complications caused by the checkerboard grant, are what led the Justice Department to recommend repealing the statute.
LSD+ gives you access to over 50,000 case briefs, more than anyone else. Be the first to email us the website of a case brief product that offers you more case briefs and we'll give you a free year of LSD+.
Unlimited access. Read as much content as you want during your trial with no device limitations. Cancel any time during your trial and keep access for the full 14 days.
Lawyers and judges love to use big words. And Latin, for some reason.
Highlight a legal term in LSD Briefs and get an instant, plain English definition. Try highlighting contract or specific performance. No need to search or read through a list of definitions, simply highlight the words you don’t know and our LSDefine integration will instantly give you a definition to any of over 30,000 legal terms.
DeepDive allows you to explore legal cases like never before. DeepDive offers multiple levels of case summaries, which empowers you to quickly and easily find the information you need to stay on top of readings. Easily navigate through summary levels and click on any text to get more detail, all the way down to the original legal case text.
Our proprietary state-of-the-art system can instantly brief over 6,000,000 US cases. That means we can probably brief that case that your professor assigned last night when she sent you a poorly scanned pdf and told you to read every third paragraph. Or maybe she uploaded it to Canvas and didn’t really tell you to read it, but you know you probably should. Tenure does wild things to good people.
Study groups are a great way to learn and explore a case. LSD has chat rooms for each case to let you ask questions across the community and hear what other students struggled with and how they put it all together. Learn the key points of every case from other LSD+ users and share your knowledge with LSD High Points.
Don’t settle for mistakes in briefs that have been there for 10 years and never fixed. Find an issue or something missing from a brief? Down vote and we will make improvements. All of our case brief editors graduated from from T14 law schools.