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Business litigation case grows into a complex maze of disputes

In a state like Oregon, business disputes may occasionally involve mining or gas and oil exploration conflicts. In one such business litigation conflict in another state the stakes have been raised by one company’s allegations that the other is running a racketeering enterprise in violation of the Racketeer Influenced and Corrupt Organizations Act (RICO). The litigation is bitter, and both sides have taken to litigating in the media as well as the courts.

The seeds of the dispute were planted in 2015 when a company called Cliffs sold two coal mines to Seneca Coal Resources for $268 million with the condition that Seneca would assume all liabilities at the locations. The seller filed a lawsuit claiming that Seneca has not paid in full. In the plaintiff’s latest filing, it now alleges that Seneca’s owners have used money from the company and stocked their personal bank accounts.

The seller also claims that Seneca has moved money into other companies it owns. In addition to breach of contract, the suit now claims mail and wire fraud against Seneca as the predicate acts for claiming that the defendant is operating a criminal enterprise. The law of RICO is complex, and it is difficult for civil litigants to establish all of the very precise elements necessary to prove a racketeering enterprise. The parties are also fighting about a rich deposit of taconite iron ore at another location.

The press reports do not make it clear what rights each side claims to have to the ore. To complicate matters, one or more of the companies involved in a web of subsidiaries have filed bankruptcy actions. Sometimes, business litigation in Oregon and elsewhere may involve several disputes among related companies that can spread out into several courts, with overlapping claims, creating a sprawling conflict that may take a long time to resolve. The two main companies appear to be in that kind of a fight.  

Source: wctrib.com, “Iron Range mining companies’ legal battle expands with more allegations“, John Myers, April 18, 2018

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