Complaint against SDI tossed out.

A Michigan judge has dismissed a lawsuit filed by General Motors that attempted to compel Steel Dynamics Inc. (SDI), to sell at January 2003 prices for several years.

Oakland County (Mich.) Circuit Court Judge Gene Schnelz has granted Steel Dynamics' motion to dismiss GM's lawsuit on the basis that GM failed to state a legally valid claim against SDI in its suit, filed earlier this year.

The court noted that a letter GM offered as evidence of a fixed-price agreement simply constituted "a framework for the future" and contained a provision negating existance of GM's obligation to purchase minimum steel tonnages or a minimum percentage of GM's requirements of the designated flat-rolled steel products.

Steel Dynamics, Fort Wayne, Ind., asked for the motion to dismiss GM's complaint based upon this Jan. 22, 2003 letter.

GM had argued that it was entitled to purchase steel at January 2003 pricing for the balance of 2004. SDI contended that GM's so-called agreement was legally unenforceable because of a lack of mutual obligation--that is, GM could not legally enforce an obligation upon SDI to sell when GM disclaimed an obligation to purchase--and the court agreed.

"As a company, we are committed to honoring our obligations, and we do so every day, even if circumstances turn against us in a particular transaction," Keith Busse, SDI's president and CEO, said. "However, we felt strongly that General Motors' attempt to take advantage of the dramatic increase in the market price of steel by asserting a one-way obligation against us was wrong and should be opposed."