Ethanol Blog

Archer Daniels Midland Asks for Stay From Court on Ethanol Markets Lawsuit

Todd Neeley
By  Todd Neeley , DTN Staff Reporter
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A federal appeals court is considering one of three total ethanol markets lawsuits filed against Archer Daniels Midland. (DTN file photo by Chris Clayton)

LINCOLN, Neb. (DTN) -- Just weeks after a federal court allowed an ethanol markets lawsuit to continue against Archer Daniels Midland, the company has filed a motion for a stay in the case pending the outcome of an appeal filed on a similar case.

At the end of September, the U.S. District Court for the District of Central Illinois ruled that plaintiff, Midwest Renewable Energy, presented sufficient evidence for a lawsuit to continue against ADM. MRE is one of three companies in total that have alleged ADM manipulated the ethanol market to the company's benefit and to the detriment of other ethanol producers.

On Oct. 17, ADM filed a motion with the district court to either grant a stay in the Midwest Renewable Energy case or to certify an interlocutory appeal. That is an appeal of non-final court orders issued during the course of litigation.

United Wisconsin, a group of ethanol producers that had a previous lawsuit against ADM thrown out, appealed the district court's decision to the U.S. Court of Appeals for the Seventh Circuit in Chicago.

In its motion on Tuesday, ADM said the Seventh Circuit now is considering the same legal questions presented in the Midwest Renewable Energy lawsuit.

ADM said a Seventh Circuit decision could end the MRE case.

"This court's decision not to dismiss depended on answers to contested legal questions that are part of the United Wisconsin appeal," ADM said in its motion.

"The Seventh Circuit's decision will almost certainly answer those questions. This court should stay this case to await that decision. The decision could effectively end this case, or it could change this case's contours and direction. Either way, a stay would allow the court and parties to conserve resources by not resuming class certification proceedings that the decision may change or even make unnecessary."

ADM said there is a "near-total overlap" between the two cases, as both rely on the "same facts" and assert the same legal claims.

"They raise the same or remarkably similar questions about the relevant market, monopoly power in it, the role of intent in a predatory pricing claim, evaluating competitor exits from the relevant market or plant closures in that market, and the requirement of monopoly prices," ADM said in its motion.

"Those issues have already been briefed and argued in the Seventh Circuit. That court's decision will likely control and will definitely illuminate, the issues here."

Midwest Renewable Energy and AOT Holding AG have in separate lawsuits alleged ADM drove ethanol prices down at the Argo terminal in Illinois in an attempt to drive away competition.

All complaints alleged ADM violated the Sherman Antitrust Act in committing monopoly and attempted monopoly in the ethanol market.

The lawsuits allege ADM manipulated the market at the Argo 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.

Read more on DTN:

"ADM Ethanol Markets Case to Continue," https://www.dtnpf.com/…

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

Follow him on X, formerly known as Twitter, @DTNeeley

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