Energy Transportation Group, Inc. v. Borealis Maritime Limited

Background

Energy Transportation Group, Inc. (ETG) brought an action against Borealis Maritime Limited (Borealis) alleging a breach of a revenue-sharing agreement. During discovery, ETG sought emails concerning the Stanley Maritime I and II Funds. Borealis argued that the connection between its introduction to Miller Buckfire and the creation of those funds was too remote, and that neither Miller Buckfire nor ETG had been involved with the funds.

On December 18, 2023, the Court temporarily granted Borealis’s protective-order request and denied ETG’s motion to compel discovery about the funds. The Court stated that discovery about those funds would become available only if a later decision resolving the case determined that the revenue-sharing agreement could cover them. ETG filed one motion for reconsideration, which the Court denied on March 22, 2024.

Around April 3, 2024, non-party Kohlberg Kravis Roberts & Co. produced documents to ETG, including a March 27, 2013 email from Borealis concerning a “shipping debt fund idea” and an attached presentation. ETG argued that these materials undermined Borealis’s position that the funds were not contemplated until 2017 and supported ETG’s argument that the funds fell within the agreement. ETG filed a second motion for reconsideration.

Reconsideration ruling

The Court held that ETG was not entitled to a second motion for reconsideration of the December 18 order. Reconsideration is generally available only when there is a change in controlling law, new evidence, or a need to correct a clear error or prevent serious injustice. The Court also noted that a litigant is generally entitled to only one reconsideration motion.

The Court acknowledged that ETG had received the emails only recently. It nevertheless concluded that the new documents did not justify reconsideration because ETG had already argued that Borealis was untruthful about when the funds were contemplated and had already argued that limiting discovery would impair its ability to oppose summary judgment. The Court further explained that Borealis’s timeline was not the basis for the earlier discovery ruling; the controlling reason was that discovery about additional funds would occur only after a decision determining that the agreement could cover them. The Court therefore denied ETG’s second motion for reconsideration.

Emails, questions, and fees

ETG asked the Court to require Borealis to answer questions about its failure to produce or preserve the emails. The Court declined because, while a decision resolving the merits remained pending, the proposed answers were not relevant to the second reconsideration motion.

Borealis argued that the missing emails were not sanctionable because ETG had not shown their relevance, a duty to preserve them, or a culpable state of mind. Borealis also argued that ETG should be sanctioned for filing a fruitless motion. The Court rejected Borealis’s reliance on a decision addressing factors for giving a jury an adverse-inference instruction based on destroyed evidence. The Court explained that courts have broader authority to impose discovery sanctions under Rule 37 and their inherent power to manage proceedings, even without a prior order requiring production.

The Court declined to sanction ETG, reasoning that ETG would not have filed a second reconsideration motion if Borealis had produced the emails. The Court found that Borealis had not provided a substantially justified explanation for the missing emails and presentation. It ordered Borealis to pay ETG’s reasonable attorneys’ fees and costs related to the second reconsideration motion. ETG was directed to file proof of those expenses after a dispositive decision on the merits and determination of other damages or fees. The Clerk was directed to close Docket No. 154.