Background

A large iron ore mining venture in the Upper Midwest purchased multiple autogenous grinding mills in order to facilitate processing of ore into pellets. Within a short time after the installation of the mills, cracking was discovered in the 40 foot gears. Repair and replacement of the gears would be necessary to enable the facility to continue productive operation.

The Challenge

We were retained to represent the mining venture and to obtain monetary relief so as to remedy the situation. The domestic manufacturer of the mills and the foreign foundry which cast the gears both initially sought to deny responsibility and to blame the other. The boiler and machinery insurer characterized the failures as not being “accidental”.

The Solution

We made initial attempts to bring the parties to the table for a business solution. When that was unsuccessful, we commenced litigation in the Superior Court, State of Minnesota. During discovery it became apparent that both of the manufacturer and foundry had long had reason to believe that the gears were poorly designed and manufactured. In addition, testimony revealed that from the standpoint of the mining venture the failures were unexpected.

The Result

With the facts on the table, we were able to negotiate a settlement of $7 million which included contribution from all three defendants.