ADM Moves to Exclude Expert Witness

LINCOLN, Neb. (DTN) -- Archer Daniels Midland asked a federal court on Friday to exclude the expert testimony of plaintiff witness Shaun Ledgerwood from an ongoing ethanol markets lawsuit that alleges ADM manipulated the ethanol market at the Argo terminal in Illinois.

Ledgerwood developed an economic model the plaintiffs, AOT Holding AG, allege to show that ADM manipulated ethanol markets at the terminal.

AOT and ADM agreed to hire an expert to judge the credibility of the AOT expert witness, who is a former economist at the Office of Enforcement of the Federal Energy Regulatory Commission.

ADM's motion in the U.S. District Court for the District of Central Illinois comes after a court-appointed expert completed an evaluation of Ledgerwood's analysis. Jeffrey M. Wooldridge, the university distinguished professor of economics at Michigan State University, reportedly concluded AOT did not suffer economic damage from ADM's alleged actions.

Wooldridge's report and ADM's memorandum in support of the latest motion were sealed by the court.

"Defendant Archer Daniels Midland Company moves to exclude the entirety of Shaun Ledgerwood's testimony and opinions on which plaintiffs rely for their renewed motion for class certification," ADM said in a motion filed on Friday.

"ADM moves to exclude Ledgerwood's testimony because it is unreliable under the standards of Federal Rule of Evidence 702 and Daubert v. Merrell Dow Pharms., 509 U.S. 579 (1993), for the reasons set forth in ADM's memorandum in support of this motion."

AOT Holding AG is one of two companies that have sued ADM alleging market manipulation. The second is Midwest Renewable Energy.

Specifically, AOT has alleged ADM suppressed the daily benchmark price of ethanol to benefit its short positions. AOT has alleged ADM's actions benefited the company by increasing the value of ADM's "short" or "hedged" ethanol positions.

AOT filed a class-action lawsuit in May 2020, alleging ADM manipulated the daily ethanol market at the Argo terminal by flooding the fuel terminal with lower-priced ethanol starting in November 2017 through March 2019. The specific trading in question occurred during the 30-minute "market-on-close," or MOC, window.

AOT has since asked the court for leave to file what would be a renewed motion for partial summary judgement in the case. Such a motion asks a court to issue a ruling based on undisputed facts.

ADM opposed AOT's request as well as a previously filed motion for class certification.

Ledgerwood developed a so-called regression analysis model on behalf of AOT Holding and Maize Capital Group LLC.

At the beginning of October 2022, the court denied an ADM motion to exclude Ledgerwood's testimony and report. Ledgerwood used several inputs to the model to show ADM allegedly manipulated the market.

That includes the futures price of corn; wages paid to manufacturing workers; electricity and natural gas prices; prices of byproducts of ethanol production; railroad transportation costs; storms or other severe weather in Illinois; the gasoline price in New York Harbor; the price of renewable identification numbers, or RINs; the amount of ethanol and gasoline stocks in the U.S.; and U.S. imports and exports of ethanol and Chinese tariffs on those.

ADM has argued that Ledgerwood and his report are not admissible because the model almost always finds ethanol-price suppression on ADM's part and that he used the wrong model and data for pricing, among other issues.

Read more on DTN:

"ADM: Expert Shows Plaintiff Unharmed," https://www.dtnpf.com/….

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

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

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