Ethanol Blog

ADM Motions to Dismiss Ethanol Markets Lawsuit For Second Time

Todd Neeley
By  Todd Neeley , DTN Staff Reporter
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Archer Daniels Midland asked a federal court to dismiss an ongoing ethanol markets lawsuit for the second time. (DTN file photo)

LINCOLN, Neb. (DTN) -- Midwest Renewable Energy LLC has not proven anti-trust damages in an ongoing ethanol markets lawsuit and Archer Daniels Midland asked a federal court on Friday to dismiss the case.

The U.S. District Court for the District of Central Illinois dismissed MRE's first lawsuit against ADM in August 2021. MRE is one of two remaining companies that alleged ADM drove ethanol prices down at the Argo Terminal in Illinois in an attempt to drive away competition.

Midwest Renewable Energy filed an amended lawsuit and on Friday attorneys for Archer Daniels Midland told the court the company still has failed to prove anti-trust injury occurred.

"Plaintiff's amended complaint and opposition to ADM's motion to dismiss show that this case continues to be nothing more than one competitor complaining about another charging lower prices," ADM said in court filing on Friday.

"That is not an antitrust violation. Now that plaintiff has failed to state a claim in two attempts -- even after voluminous discovery from ADM and third parties -- the case should be dismissed with prejudice. Plaintiff's claims depend on alleging and proving predatory pricing. Such claims are rare and difficult to allege and prove because, by their nature, they present a serious risk of punishing the very thing that the antitrust laws exist to protect -- low prices for the benefit of consumers."

Dismissing a case with prejudice means the plaintiff could not refile the same claim again in that court.

A second lawsuit filed by AOT Holding is pending in the same court.

The companies allege ADM manipulated the market at the Argo, Illinois, terminal by flooding the fuel terminal with lower-priced ethanol starting in November 2017 through March 2019. The Argo terminal is the daily location for ethanol trading. The court said the specific trading in question occurred during the 30-minute "market-on-close," or MOC, window.

The trading window is considered crucial because the trading is used to set the daily Chicago benchmark price to determine the value of Chicago ethanol derivatives.

"Plaintiffs have now twice failed to meet their burden of pleading a predatory-pricing claim because their theory is fundamentally at odds with antitrust law," ADM said in its court brief this week.

"To state a proper predatory pricing claim, a complaint must first allege facts plausibly showing that the defendant's low prices forced other producers to stop producing because they could not make a profit. Plaintiff claims that the amended complaint alleges that 'ADM forced seven firms to close permanently,' but that is not true. The amended complaint does not allege that any competitor stopped making ethanol. In addition, the amended complaint admits that ethanol production rises every year, which is the antithesis of predation and shows the absence of predatory pricing."

Read more on DTN:

"Court: Some ADM Employee Docs Secured," https://www.dtnpf.com/…

Todd Neeley can be reached at todd.neeley@dtn.com

Follow him on Twitter @DTNeeley

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