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United States Court of Appeals for the Seventh Circuit - 799 F.2d 265
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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.
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