ADM Ethanol Trial Faces Likely Delay

LINCOLN, Neb. (DTN) -- It will likely be the end of 2024 or later before a lawsuit alleging ethanol-market manipulation against Archer Daniels Midland is brought to trial, as a federal judge on Monday ordered the parties in the case to file briefs later this year.

AOT Holding AG 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.

AOT alleged in a May 2020 lawsuit that ADM's actions benefited the company by increasing the value of ADM's "short" or hedged ethanol positions, by flooding the Argo fuel terminal with lower-priced ethanol starting in November 2017 through March 2019. The terminal is the daily location for ethanol trading.

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.

U.S. District Judge Colin S. Bruce expressed frustration about the pace at which the AOT lawsuit is moving, in an order handed down in the U.S. District Court for the District of Central Illinois.

Bruce decided to not set a trial date until after a number of motions are addressed by the court.

"The court is aware that this case is an older case and is not unsympathetic to plaintiffs' frustrations about that delay, as expressed in plaintiffs' notice," Bruce said in an order.

"However, the delays have been engendered by the COVID-19 pandemic, the substantial complexity of this case and other issues. Indeed, to be quite clear, one of those issues is both parties' highly litigious conduct in this case, fighting over matters great and small, ranging from merits issues to procedural issues to discovery issues to scheduling issues. Of particular note is that there have already been three separate appeals of magistrate judge decisions in this case (pursued by both parties), one of which is still currently pending before this court.

"Every time there is an appeal of the magistrate judge's decision, it requires time, attention, and judicial resources of the court, effectively pausing the litigation."

ADM did not respond to DTN's request for comment at press time.

Earlier this summer, a neutral expert hired by the court to analyze a report and expert testimony of economist Shawn Ledgerwood hired by AOT, issued a sealed report to the court. According to court documents, Ledgerwood used an economic model to determine whether ADM manipulated the market.

ADM has argued Ledgerwood and the report are inadmissible because the model almost always finds ethanol-price suppression on ADM's part and that the model uses the wrong pricing data.

Both sides agreed to the court's appointment of Jeffrey M. Wooldridge, the university distinguished professor of economics at Michigan State University. Professor Wooldridge specializes in econometrics and is the author of two leading textbooks on the subject and submitted a report to the court following his analysis of Ledgerwood's model.

The court ordered the first set of briefs on Woolridge's report to be submitted by Sept. 22, 2023 and replies to those briefs filed by Nov. 17, 2023. More reply briefs are to be submitted by Jan. 12, 2024.

Bruce told both sides it would likely be late in 2024 or beyond before the case goes to trial.

"Suffice to say, an August 2024 jury trial date is not likely, as the court's calendar at that time is already filling up," Bruce said in the order.

"Thus, as of the moment, the earliest the court could try the case would be September or October 2024, but may well be later than that. Moreover, this case is far and away not the court's only case. In addition to a crowded civil docket, the court has a full criminal docket, whose trials, motions, and hearings take precedence over civil actions."

Read more on DTN:

"ADM, Plaintiffs Agree on Expert Analyst," https://www.dtnpf.com/…

"Expert: ADM Manipulated Ethanol Market," https://www.dtnpf.com/…

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

Follow him on Twitter @DTNeeley

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