Federal Court Stays ADM Ethanol Lawsuit

Archer Daniels Midland Ethanol Markets Lawsuit Stayed by Federal Magistrate

Todd Neeley
By  Todd Neeley , DTN Staff Reporter
Connect with Todd:
A federal court has stayed an ongoing ethanol markets lawsuit filed against Archer Daniels Midland. (DTN file photo)

LINCOLN, Neb. (DTN) -- A federal magistrate granted Archer Daniels Midland an unopposed motion to stay an ethanol markets lawsuit filed by AOT Holding AG, in an order handed down on Tuesday.

The U.S. District Court for the District of Central Illinois granted the stay that was requested by ADM on May 26, pending a ruling on the company's objection to a previous ruling that ADM has to release information to AOT related to an employee at the center of the lawsuit.

Attorneys for ADM alleged in an objection to the court, that the judge released sealed information as part of a ruling.

"The local rules of United States District Court for the Central District of Illinois are silent as to whether a stay is required in these circumstances," ADM said in a May 26 motion to stay.

"Though ADM reasonably believed that filing an objection to the Order stayed ADM's obligation to produce the contested documents until the district court resolved the objection, on May 26, 2022, plaintiffs' counsel alerted ADM to their view that the objection may not automatically stay the execution of the order. ADM has not located any binding Seventh Circuit authority, or any authority in the Central District of Illinois, addressing this issue."

On May 3 the court granted access to documents and other communications related to the 2019 suspension of an ADM accounting employee Adam Kuffel.

In particular, the court ordered ADM to provide information related to the suspension of Kuffel to plaintiff AOT. Kuffel was suspended for allegedly violating the company's internal accounting policy.

AOT is one of several plaintiffs that have sued ADM, alleging the company manipulated ethanol prices, violating the Commodity Exchange Act. Specifically, AOT has alleged ADM suppressed the daily benchmark price of ethanol to benefit its short positions.

At an AOT deposition of Kuffel, he said he was suspended without pay by ADM in September 2019, according to the May 3 court order. Kuffel said during a deposition that a superior ordered him to violate the policy.

AOT filed its complaint just prior to the suspension, according to the order.

ADM attorneys argue in an objection that the court's May 3 ruling released information that should have been sealed as part of the 2019 order.

AOT has alleged ADM's actions benefited the company by increasing the value of ADM's "short" or "hedged" ethanol positions. "Stated differently, plaintiff alleges that Bradbury and Kuffel artificially stunted ethanol prices to benefit ADM investments," the court said in its May 3 ruling. That court ruling sided with AOT on its claim that all documents and communications related to Kuffel's suspension are relevant to the overall case. The May ruling also said AOT should have the opportunity to probe whether Kuffel's suspension was in any way connected to the alleged price-manipulation scheme.

AOT filed a class-action lawsuit in May 2020, alleging 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.

Similar lawsuits were filed by Wisconsin ethanol producers United Wisconsin Grain Producers, Didion Ethanol, Ace Ethanol, Fox River Valley Ethanol, Badger State Ethanol and Iowa producer Pine Lake Corn. In addition, a lawsuit filed by Green Plains Inc. in Nebraska was transferred to the Illinois court.

Read more on DTN:

"ADM Ordered to Release Docs on Employee" https://www.dtnpf.com/…

"Ethanol Price Manipulation Case Moves" https://www.dtnpf.com/…

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

Follow him on Twitter @DTNeeley

Todd Neeley