Petitioner alleges conspiracy to dominate Texas iron industry

A Brazilian mining company known as Itabiriçu is petitioning the Supreme Court of Texas to review an appellate court’s decision in its long running lawsuit against industry rival Vale SA.

The petition raises broad questions about whether foreign companies can be sued in Texas, how closely a lawsuit must be tied to Texas conduct and how courts should analyze commercial activity that spans multiple countries and jurisdictions.

The original lawsuit filed in October 2023 in Nueces County, Texas, alleged Vale conspired with co-defendants Voestalpine Texas, LLC and Voestalpine US Holding LLC to become Texas’ primary iron ore supplier. Vale allegedly extracted and sold more than 100 million tons of the metal rightfully owned by Itabiriçu to Voestalpine, which then shipped the processed ore through the Port of Corpus Christi.

The battle derives from a dispute between Itabiriçu and Vale over Brazil’s Research Permit Polygonal, a water-filled zone that stores mineral waste products known as tailings. According to the filing, Itabiriçu has the technological capability to safely extract iron from the tailings in this area.

In September 2023, a Brazilian federal court ruled in favor of Itabiriçu, upholding the company's ownership of these tailings and the right to begin extraction efforts in the Polygonal. However, prior to that ruling Vale had extracted and sold the disputed tailings.

After the Texas trial court denied Vale’s claims as a matter of personal jurisdiction, the Texas Court of Appeals dismissed Itabiriçu's allegations of improper conversion and sale of iron ore against Vale, ruling that the issues should lie solely in Brazil's courts.

In the petition to the Texas Supreme Court, Itabiriçu's counsel argues that the appellate court’s ruling to separate Vale's unlawful extraction of iron ore in Brazil from its business dealings in Texas is flawed.

"If the court broadens its view, it's clear Vale's affiliation with Voestalpine influenced the decision to take and sell Itabiriçu's materials," says Michael K. Hurst of Dallas-based Lynn Pinker Hurst & Schwegmann, attorneys for Itabiriçu.

According to the filing, Vale created and maintained a "Texas Project" alongside Voestalpine to establish domination over iron shipping and processing in Texas. Itabiriçu also claims Vale illegally commingled the two companies' raw materials.

"For years Vale has been wrongfully storing our clients’ rightfully owned raw materials with theirs and selling them," says Mr. Hurst. "Vale and its co-conspirators should not benefit from making our client's iron nearly impossible to trace."

The case is Itabiriçu Nacional De Pesquisa Mineral LTDA., v. Vale S.A., Case No. 26-0792 in the Supreme Court of Texas. Itabiriçu is represented in the appeal by Chad Flores of Flores Law, PLLC and Jeffrey S. Boyd of Law Office of Retired Justice Jeff Boyd, PLLC, as well as Michael P. Lynn, Michael K. Hurst and Chloe M. Teeter of Lynn Pinker Hurst & Schwegmann LLP, Raymond L. Thomas of Ray Thomas PC, John T. Flood of John T. Flood, LLP.

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