## Facts

- American Iron Metal Company, Inc. (AIM) sold scrap metal; U.S. Ferrous Trading Division, Tube City Division (Tube City) bought and resold scrap metal.
- AIM and Tube City’s managers had discussions about Tube City purchasing AIM’s scrap for resale to an Egyptian customer at an agreed price (reported as $305 per metric ton) and an expected volume (reported as roughly 30,000–35,000 metric tons).
- After the discussions, Tube City’s manager sent AIM’s manager two emails memorializing parts of what had been discussed, including the expected tonnage range and the contemplated resale to the Egyptian buyer, but leaving out other terms discussed.
- The Egyptian buyer later ended negotiations with Tube City, and AIM ultimately sold its scrap at a loss.
- AIM sued Tube City in federal court, asserting (1) breach of an alleged requirements-type contract for scrap shipments and (2) conversion relating to scrap already delivered.
- Tube City moved for summary judgment, arguing that the alleged sales contract was unenforceable under the UCC statute of frauds because the writings did not satisfy UCC § 2-201’s requirements, including the need for a sufficient quantity term.

## Issues

1. Whether the parties’ emails were sufficient writings under UCC § 2-201 to enforce the alleged scrap-metal sales contract, including whether they contained a quantity term (or an enforceable requirements commitment) sufficient to satisfy the statute of frauds.
2. After dismissal of the contract claim, whether the federal court should keep supplemental jurisdiction over AIM’s state-law conversion claim.

## Decision

- The court granted summary judgment for Tube City on AIM’s breach-of-contract claim.
- The court held that the writings AIM relied on did not satisfy the UCC statute of frauds because they did not include a quantity term that bound Tube City, and they did not state (or otherwise supply) an enforceable requirements commitment or an objective basis from which a quantity could be inferred.
- With the contract claim resolved, the court dismissed AIM’s conversion claim without prejudice, declining to exercise supplemental jurisdiction and allowing AIM to pursue that claim in state court.

## Legal Principles

- Under UCC § 2-201(1), a contract for the sale of goods is not enforceable beyond a stated quantity unless there is a signed writing sufficient to indicate a contract between the parties that includes a quantity term.
- Between merchants, a confirmatory writing under UCC § 2-201(2) can satisfy the statute of frauds if it would be sufficient against the sender and the recipient does not object within the statutory period; the writing still must include the quantity element required by § 2-201.
- A purported “requirements contract” cannot avoid the statute of frauds unless the writing indicates that the buyer agreed to purchase its requirements (or otherwise provides an objective method—such as a formula or benchmark—from which the quantity obligation can be determined).
- When the claim providing original federal jurisdiction is dismissed, a federal court may decline supplemental jurisdiction over remaining state-law claims and dismiss them without prejudice.

## Conclusion

The court ruled that AIM could not enforce the alleged scrap-metal sales agreement because the parties’ emails did not supply a UCC-compliant quantity obligation (and did not memorialize a true requirements commitment or other objective quantity standard), so the statute of frauds barred the contract claim; once that claim was dismissed, the court declined to keep the related conversion claim and dismissed it without prejudice for refiling in state court.


American Iron Metal Co. v. U.S. Ferrous Trading Division, Tube City Division, 2007 WL 1125682 (2007)