throbber
2:20-cv-02314-CSB-EIL # 1 Page 1 of 63
`E-FILED
` Wednesday, 11 November, 2020 04:44:56 PM
` Clerk, U.S. District Court, ILCD
`
`UNITED STATES DISTRICT COURT
`FOR THE CENTRAL DISTRICT OF ILLINOIS
`URBANA DIVISION
`
`
`UNITED WISCONSIN GRAIN PRODUCERS
`LLC; DIDION ETHANOL, LLC; ACE
`ETHANOL, LLC; FOX RIVER VALLEY
`ETHANOL, LLC; BADGER STATE
`ETHANOL, LLC; and PLCP, LLLP,
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`ARCHER DANIELS MIDLAND COMPANY,
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`v.
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`Civil Action No.:
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`JURY TRIAL DEMANDED
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`Plaintiffs,
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`Defendant.
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`COMPLAINT
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`TABLE OF CONTENTS
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`GLOSSARY OF COMMONLY USED TERMS ..................................................................... ii
`SUMMARY OF CASE..............................................................................................................1
`PARTIES ...................................................................................................................................8
`JURISDICTION AND VENUE ................................................................................................9
`FACTUAL ALLEGATIONS ..................................................................................................10
`A. The Ethanol Market in the United States ..................................................................10
`B. The Argo Terminal and the Chicago Price Indexes ..................................................14
`C. Ethanol Derivatives Are Tied to the Chicago Benchmark Price ..............................16
`D. The Chicago Benchmark Price and Chicago Ethanol Derivatives are
`highly susceptible to manipulation ...........................................................................19
`E. The Mechanics of ADM’s Scheme ...........................................................................23
`F. ADM’s Conduct Was Intended to Control and Manipulation Prices .......................26
`G. ADM’s Senior Executive Knew About the Unlawful Scheme .................................32
`H. The Impact of ADM’s Scheme on Ethanol Prices ....................................................35
`FRAUDULENT CONCEALMENT ........................................................................................36
`RELEVANT MARKETS ........................................................................................................37
`A. ADM Exercised Monopoly Power in the Argo Terminal Market, Thereby
`Controlling and Depressing Prices in the U.S. Ethanol Market ...............................37
`B. ADM Possessed Monopoly Power in the Argo Terminal Market and
`the U.S. Ethanol Market............................................................................................40
`C. ADM’s Monopoly Power Was Durable. ..................................................................41
`VIOLATIONS ALLEGED ......................................................................................................43
`PRAYER FOR RELIEF ..........................................................................................................56
`JURY TRIAL DEMANDED ...................................................................................................58
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`GLOSSARY OF COMMONLY USED TERMS
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`Argo Prices: Prices of ethanol for transactions in ethanol made at the Argo Terminal. Argo Prices
`play an outsized role in setting of U.S. ethanol prices. Argo Prices during the Market-on-Close
`Window (defined below) are used by Platts (defined below) in the determination of the Chicago
`Benchmark Price. Argo Prices are also used by OPIS (defined below) in its reports of the daily
`Chicago OPIS prices.
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`Argo Terminal: A fuel terminal located in Argo, Illinois operated by Kinder Morgan. Because of
`its Midwest location, the Argo Terminal plays an outsized role in the buying and selling of ethanol.
`Ethanol trading at the Argo Terminal during the half-hour Market-on-Close Window (defined
`below) determines the Chicago Benchmark Price (defined below) that is used to set the price for
`ethanol and ethanol-based financial instruments sold throughout the United States.
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`Argo Terminal Market: The market for the purchase and sale of ethanol at the Argo Terminal.
`The Argo Terminal Market is unique because Argo Prices for ethanol determine the price of
`ethanol sold nationwide whether it is sold at other terminals or through bilateral sales between
`private parties through negotiated agreements.
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`Chicago Benchmark Price: A benchmark price index for ethanol published by Platts. The
`Chicago Benchmark Price and the Chicago OPIS Price (defined below) are the dominant indexes
`used to determine the price in Producer Sales Contracts for ethanol sold throughout the United
`States. However, the Chicago Benchmark Price is the exclusive index used as the basis for
`determining the value of Chicago Ethanol Derivatives. The Chicago Benchmark Price is set by
`reference to the daily price of ethanol traded at the Argo Terminal. More particularly, the Chicago
`Benchmark Price is determined by Platts based on ethanol sales made during the Market-on-Close
`Window at the Argo Terminal.
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`Chicago Ethanol Derivatives: Ethanol futures contracts and options contracts traded on the
`Chicago Mercantile Exchange (the “CME”). The value of these instruments is determined wholly
`or in part by the Chicago Benchmark Price. The most important derivatives are (1) the Chicago
`Ethanol (Platts) Futures contract (CME symbol: CU) traded on the New York Mercantile
`Exchange (“NYMEX”); (2) the Chicago Ethanol (Platts) Average Price Option (CME symbol:
`CVR) traded on NYMEX; and (3) the CME’s Ethanol Futures Contract (CME symbol: EH) traded
`on the Chicago Board of Trade (“CBOT”).
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`Chicago OPIS Price: A benchmark price index published by OPIS that is frequently used as the
`basis for setting the price of ethanol sold throughout the United States. The Chicago OPIS Price
`is set by reference to the daily price assessments released by OPIS for ethanol spot market trades
`at the Argo Terminal. Specifically, assessments are for Denatured fuel-grade ethanol FOB Argo
`Terminal, 5,000 bbl, including RINs for the calendar year corresponding to the product delivery
`date. Prompt assessments are 3-10 days from the published date.
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`Decay: The phenomenon that occurs where a fixed percentage of the open position in a
`diminishing balance contract held by an investor is “locked in” based on each day’s trading price.
`The amount of decay can be determined by the number of open positions held by an investor
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`divided by the number of trading days in the particular month. This decay occurs because each
`trading day’s settlement price has a proportional impact on the final settlement value of the contract
`at the end of the month.
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`Diminishing Balance Contract: Specific futures contracts whose front month position in any
`given contract month diminishes as the contract month progresses toward expiration at the end of
`the month for purposes of position limits. Diminishing balance contracts typically have a final
`settlement value equal to the average of the benchmark price for all trading days in the contract
`month. Chicago Ethanol (Platts) Futures are diminishing balance contracts.
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`Formula Prices: In their Producer Sales Contracts, Producers frequently specify, as the price
`term, a formula which is expressly based on Argo Prices. As used herein, Formula Prices are
`prices in Producer Sales Contracts which are expressly based, in whole or in part, on a Chicago
`Benchmark Price and/or a Chicago OPIS Price.
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`Hitting the Bid: A phrase that describes a consummated trade where a seller agrees to match a
`buyer’s posted bid quotation price. “Hitting the bid” is the opposite of “lifting the offer,” where a
`buyer agrees to match a seller’s offer quotation for the product.
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`ITT: Intertank Transfer (“ITT”) transactions occurring at the Argo Terminal where ethanol is sold
`from storage tanks and deliverable at the Argo Terminal between 5 and 15 days forward from the
`date of sale. ITT transactions occurring during the MOC Window form the basis of the Chicago
`Benchmark Price.
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`Lifting the Offer: A phrase that describes a consummated trade where a buyer agrees to match a
`seller’s offer quotation for the product. “Lifting the offer” is the opposite of “hitting the bid,”
`where a seller agrees to match a buyer’s posted bid quotation price.
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`Long Position: A trading position where a derivative investment earns money for a trader if the
`price of the underlying commodity increases. A long position contrasts with, and is complementary
`to, a short position where a trader earns money if the price of the underlying commodity decreases.
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`Market-on-Close Window: The Market-on-Close (“MOC”) Window is a 30-minute trading
`period for ITT ethanol transactions between 1:00 p.m. and 1:30 p.m. C.T. every trading day at the
`Argo Terminal. Platts uses trading activity during the MOC Window to determine the daily
`Chicago Benchmark Price for ethanol.
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`Oil Price Information Service (“OPIS”): OPIS provides prices from the Argo Terminal in its
`Chicago OPIS Prices.
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`Platts: S&P Global Platts (“Platts”) is a provider of trading information in the ethanol market and
`other markets. Platts creates the daily Chicago Benchmark Price that is then used to set Formula
`Prices for sales of ethanol and is used to determine the value of Chicago Ethanol Derivatives.
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`Producer Sales: The sales of ethanol made by the producer of that ethanol to another person.
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`Producer Sales Contracts: Contracts used by ethanol producers to sell the ethanol they produce.
`Producer Sales Contracts usually incorporate Formula Prices.
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`Producers: The persons who produce ethanol and sell such ethanol to another person.
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`Relevant Time Period: The period during which Defendant ADM illegally manipulated Argo
`Prices. The Relevant Time Period runs from November 17, 2017 to the present.
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`Short Position: A trading position where a derivative investment earns money for a trader if the
`price of the underlying commodity decreases. A Short Position contrasts with and is
`complementary to a Long Position where a trader earns money if the price of the underlying
`commodity increases.
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`U.S. Ethanol Market: The market for ethanol sold throughout the United States. The pricing in
`the U.S. Ethanol Market is dictated by the prices set in Argo Terminal Market.
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`Plaintiffs United Wisconsin Grain Producers LLC, Didion Ethanol, LLC, ACE Ethanol,
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`LLC, Badger State Ethanol, LLC, Fox River Valley Ethanol, LLC, and PLCP, LLLP,
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`(collectively, “Plaintiffs”) bring this action against Defendant Archer Daniels Midland Company
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`(“ADM”). Based upon personal knowledge, information, belief, and investigation of counsel,
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`Plaintiffs specifically allege:
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`SUMMARY OF CASE
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`1.
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`Ethanol (ethyl alcohol) is a renewable, biodegradable, high-octane motor fuel
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`derived from the sugars, starches and cellulosic matter found in corn. It has been used as a fuel or
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`additive dating back to the days of Henry Ford’s Model T. Nearly every gallon of gasoline
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`consumed in the United States today contains fuel ethanol. Ethanol is part of our nation’s solution
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`to reducing our dependency on fossil fuels, lowering fuel prices, creating domestic jobs, boosting
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`the farm economy, and cleaning our environment.
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`2.
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`Plaintiffs are producers and sellers of ethanol in the Midwest and the United States.
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`Unlike the large agribusiness that is ADM, Plaintiffs are limited liability companies and a limited
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`partnership comprised of largely local and regional corn farmers. They do not have the power to
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`control the ethanol market nor do they have the power to change the way that ethanol is priced.
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`Plaintiffs sell the ethanol they produce for the prevailing market prices established, for the most
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`part, by reference to the prices set at the Argo Terminal. More particularly, Plaintiffs, like most
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`Producers, sell their ethanol by way of Producer Sales Contracts that include Formula Prices which
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`are set by reference to the two dominant pricing indexes used throughout the United States, the
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`Chicago Benchmark Price and/or the Chicago OPIS Price (referred to collectively herein as the
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`“Chicago Price Indexes”). Buyers and sellers in the ethanol market rely heavily on the proper
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`functioning of the Argo Terminal Market and accept the Chicago Price Indexes as an accurate
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`measure of the market price for ethanol.
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`3.
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`ADM, one of the largest producers of ethanol in the United States, intentionally
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`manipulated and artificially depressed the price of ethanol in the United States. By targeting
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`ethanol sales activity at the Argo Terminal and specifically during the key time frame, the MOC
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`Window, ADM was able to artificially depress the Chicago Price Indexes and, in turn, control the
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`prices of ethanol sold throughout the United States that relied upon those indexes. ADM was able
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`to profit from its ability to control and depress the price for ethanol because, in addition to setting
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`the market price for ethanol in the United States, the Chicago Benchmark Price is also used by
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`buyers and sellers to determine the value of Chicago Ethanol Derivatives. So, while ADM was
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`depressing Argo Prices and the Chicago Price Indexes, ADM was simultaneously making outsized
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`investments in Short Position Chicago Ethanol Derivatives which meant that although it lost
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`money on its ethanol sales by selling at reduced prices, it more than made up that lost revenue
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`because its “speculative” derivatives were guaranteed to increase in value as a result the depressed
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`ethanol prices it created. In addition, by driving down ethanol prices, ADM intended to drive
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`competitors like Plaintiffs out of the ethanol market, further entrenching its control over the pricing
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`of ethanol nationwide.
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`4.
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`As a result of ADM’s unlawful, anticompetitive and deceptive activity, Plaintiffs
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`were harmed. This lawsuit seeks redress under Federal antitrust law, Illinois antitrust law, and the
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`consumer protection laws of the States of Illinois, Iowa, and Wisconsin, for damages caused by
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`ADM’s illegal manipulation of Argo Prices, including the Chicago Price Indexes, that resulted in
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`depressed prices on nearly all Producer Sales nationwide.
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`5.
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`By way of further explanation, ADM produces ethanol at multiple bioprocessing
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`sites in the United States and sells ethanol into cash markets, including a cash spot market at the
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`Argo Terminal. While being one of many cash spot markets, the Argo Terminal is unique because
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`it serves as the price reference point for nearly all ethanol sales in the United States. Specifically,
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`ethanol sales at the Argo Terminal are used to set the Chicago Price Indexes, the indexes that are
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`then used to set the price for ethanol sold throughout the United States. The Chicago OPIS Price
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`index is set by reference to the price of ethanol sold each day at the Argo Terminal and the Chicago
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`Benchmark Price is set by reference to the price of ethanol sold each day at the Argo Terminal
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`during one thirty minute-trading period, the MOC Window.
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`6.
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`As a producer and seller of ethanol, ADM should want pricing mechanisms that
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`maximize ethanol market prices. However, by 2017, ADM had decided its ethanol operations
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`were not profitable. First, AMD sought to sell its ethanol production facilities, but it failed to
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`secure a willing buyer. ADM then devised a novel (and illegal) way to profit from its ethanol
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`operations. During the Relevant Time Period, ADM acquired large amounts of Short Position
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`Chicago Ethanol Derivatives that went up in value if the Chicago Benchmark Price for ethanol
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`went down. ADM acquired these Chicago Ethanol Derivatives to an extent that went well beyond
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`any reasonable hedging activity and was a stark departure from its past practice. The key to
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`profiting from this outsized financial derivative position was ADM’s ability to control the price of
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`ethanol and specifically its ability to make sure that the Chicago Benchmark Price was depressed.
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`7.
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`ADM specifically sought to exercise, acquire and/or maintain monopoly power in
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`the Argo Terminal Market so that it could depress Argo Prices generally, and, more particularly,
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`so that it could depress prices during the MOC Window when the Chicago Benchmark Price was
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`set. By depressing the Chicago Benchmark Price, ADM’s Short Position Chicago Ethanol
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`Derivatives would earn supra-competitive profits. In effect, ADM engaged in cross-market
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`manipulation: by monopolizing ethanol sold at the Argo Terminal, ADM was able to manipulate
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`and drive down the Chicago Benchmark Price that had the effect of driving up the value of its
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`Chicago Ethanol Derivatives to an extent that more than offset its losses on those ethanol sales.
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`However, by driving down Argo Prices, ADM drove down the Chicago Price Indexes which then
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`drove down prices throughout the U.S. Ethanol Market. By acquiring and maintaining the ability
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`to control prices at the Argo Terminal, ADM acquired and maintained the ability to control the
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`price of ethanol throughout the U.S. Ethanol Market and by using that power to depress Argo
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`Prices, ADM artificially depressed ethanol prices through the United States.
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`8.
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`To succeed, ADM needed to execute a two-step strategy. First, ADM needed to
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`ensure that prices of ethanol sold at the Argo Terminal would decline (i.e., ADM needed to depress
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`Argo Prices), which ADM did by: (i) flooding the Argo Terminal with ethanol; and (ii) hurriedly
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`lowering offers or accepting low priced bids as the dominant Argo Terminal seller rather than
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`asking or waiting for a higher price. ADM intended to control all pricing in the Argo Terminal
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`Market, but it focused in particular on ethanol sales during the MOC Window used to set the
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`Chicago Benchmark Price because the Chicago Benchmark Price is used to determine the value of
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`Chicago Ethanol Derivatives. By seeking to control the price of ethanol in the Argo Terminal
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`Market, ADM was seeking to control the price of ethanol nationwide because of the Argo Terminal
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`Market’s unique role in price setting for the U.S. Ethanol Market. Accordingly, because United
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`States ethanol prices are set by reference to Argo Prices (using the Chicago Price Indexes), by
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`selling on average, as little of one million gallons of ethanol daily during the MOC Window at the
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`Argo Terminal, ADM was able to adversely manipulate the price for over 32 million gallons of
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`ethanol sold throughout the United States each day.
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`9.
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`Second, ADM needed to gain enough leverage to turn its own losses on the sale of
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`ethanol at the Argo Terminal (and associated losses on its plant production), into financial gains
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`at the New York Mercantile Exchange (“NYMEX”) and the Chicago Board of Trade (“CBOT”)
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`that more than offset its losses, which it did by acquiring Short Position Chicago Ethanol
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`Derivatives at an unprecedented scale.
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`10.
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`There can be no doubt that ADM’s conduct at the Argo Terminal, and in the MOC
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`Window, had unlawful and anticompetitive intent. Starting November 17, 2017, when ADM
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`began executing its price manipulation strategy, through at least mid-2019, ADM was a buyer in
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`the MOC Window only once, for 210,000 gallons, and was a seller at all other times, accounting
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`for a total of approximately 821 million gallons sold. This stood in stark contrast to its pre-
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`November 17, 2017 trading behavior in which ADM had consistently been a buyer during the
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`MOC Window. Even more incriminating, while selling in the MOC Window, ADM was, at times,
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`simultaneously purchasing ethanol at the Argo Terminal outside of the MOC Window when
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`necessary to meet its delivery obligations at prices above which it was selling ethanol within the
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`MOC Window. In the absence of ADM’s unlawful scheme, this conduct was against its own
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`economic interest.
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`11.
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`ADM used its size and proximity to Argo to exploit and overwhelm the Argo
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`Terminal and force its desired, self-serving depressed ethanol pricing outcome upon other financial
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`and physical market participants. ADM knew that its conduct would also have impact beyond
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`driving up its own profits. ADM knew its conduct would cause substantial harm to other ethanol
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`producers, including Plaintiffs, by reducing the prices they received on their ethanol sales. In
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`addition, not only did ADM’s control of Argo Prices have immediate negative effects on ethanol
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`producers, it also threatened to have long term negative effects on the U.S. Ethanol Market by
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`creating a market distortion. ADM knew that other Producers would be forced to sell their ethanol
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`at artificially low prices which would ultimately lead to those Producers being forced to reduce
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`their capacity and/or leave the market altogether, further entrenching ADM’s dominant position.
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`And, once the Producers reduced capacity or left the market, it would be difficult and/or expensive
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`to reenter when prices rebounded because of the nature of ethanol plant operations. ADM kept
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`other market participants in the dark about its strategy. However, even when market participants
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`began to suspect what ADM was doing, they were powerless to stop its illicit behavior but instead
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`were forced to continue to sell their ethanol at artificially depressed prices.
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`12. Much of ADM’s behavior was economically irrational and contrary to its self-
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`interest as an ethanol producer – unless it was intended to manipulate ethanol prices in order to
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`benefit ADM’s oversized investments in Short Position Chicago Ethanol Derivatives and force
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`Plaintiffs to reduce their capacity and/or even leave the ethanol market altogether. Thus, the only
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`reasonable conclusion to draw from the evidence is that ADM in fact engaged in precisely this
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`kind of manipulation. The highlights of some of the key evidence are as follows:
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`Before November 17, 2017, when ethanol prices and profit margins were higher,
`ADM was one of the largest buyers of ethanol at the Argo Terminal. However,
`starting November 17, 2017 and continuing thereafter, when ethanol prices were
`lower and profit margins were eroding or non-existent, ADM became the largest
`seller of ethanol in the Argo Terminal Market – accounting for roughly 70% of all
`ethanol sales there.
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`Before November 17, 2017, ADM was one the largest buyers of ethanol at the Argo
`Terminal Market during the MOC Window. However, starting in November 17,
`2017 and continuing thereafter, ADM changed its behavior becoming by far the
`largest seller of ethanol during the MOC Window – accounting for roughly 90% of
`all such sales, and sometimes even more.
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`Starting on or about November 17, 2017 and continuing thereafter, ADM frequently
`sold more ethanol at low prices than it could deliver to the Argo Terminal Market,
`including during the MOC Window. To satisfy its obligations for those sales, ADM
`bought ethanol at the end of trading months, sometimes even at higher prices than
`it had sold ethanol for earlier in the month. However, even here ADM took steps to
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`maximize its price manipulation. ADM made sure to never buy ethanol during the
`MOC Window, where its purchases would be more likely to raise the Chicago
`Benchmark Price and thereby negatively impact ADM’s Short Position Ethanol
`Derivatives.
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`Starting shortly before November 17, 2017 and continuing thereafter, ADM
`amassed huge positions in ethanol derivatives tied to prices at the Argo Terminal.
`The size of these positions represented a dramatic departure from ADM’s previous
`hedging activities and can be described only as speculative bets. In some months,
`ADM took short positions on up to 6,000-7,000 Chicago Ethanol (Platts) Futures
`contracts, representing 252 to 294 million gallons of ethanol and 50% or more of
`the open interest in the relevant contract months. These speculative short positions
`dwarfed ADM’s total monthly ethanol production capacity of roughly 133 million
`gallons.
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`Due to the sheer size of ADM’s derivative positions and the way that they
`“decayed” over the course of a relevant “spot” month – as will be explained later –
`ADM was strongly incentivized to manipulate the Chicago Benchmark Price
`downward during the MOC Window of every trading day within a month.
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`ADM’s unlawful conduct and resulting manipulation of the derivative contracts
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`13.
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`market is illegal and is forbidden by the Commodities Exchange Act (“CEA”). Moreover, as
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`discussed above, it created a market distortion, manipulating ethanol supply and demand at the
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`Argo Terminal to depress Argo Prices and reducing prices for the entire U.S. Ethanol Market. As
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`noted, the Argo Terminal is a critical point for ethanol price determination and although many
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`Producer Sales are made outside of the Argo Terminal, the overwhelming majority of Producer
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`Sales are made through Producer Contracts that include Formula Prices based on the Chicago Price
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`Indexes. Thus, as ADM knew with substantial certainty when it developed and executed its illegal
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`strategy, its downward manipulation of prices at the Argo Terminal distorted the proper
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`functioning of the Argo Terminal Market and the U.S. Ethanol Market, harming other market
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`participants who relied upon the proper functioning of the Chicago Price Indexes, thwarting the
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`proper operation of the Producer Sales Contracts, and interfering with the business relationships
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`of the large majority of Producers, including Plaintiffs.
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`PARTIES
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`14.
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`Plaintiff United Wisconsin Grain Producers LLC (“UWGP”), is a limited liability
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`company, organized under the laws of the State of Wisconsin with its principal place of business
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`in Friesland, Wisconsin. UWGP is an ethanol producer that sells that ethanol to others primarily
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`pursuant to Producer Sales Contracts.
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`15.
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`Plaintiff Didion Ethanol, LLC. (“Didion”) is a limited liability company, organized
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`under the laws of the laws of the State of Wisconsin with its principal place of business in Cambia,
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`Wisconsin. Didion is an ethanol producer that sells that ethanol to others primarily pursuant to
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`Producer Sales Contracts.
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`16.
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`Plaintiff ACE Ethanol LLC (“ACE”) is a limited liability company, organized
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`under the laws of the State of Wisconsin with its principal place of business in Stanley, Wisconsin.
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`ACE is an ethanol producer that sells that ethanol to others primarily pursuant to Producer Sales
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`Contracts.
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`17.
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`Plaintiff Badger State Ethanol, LLC (“Badger State”) is a limited liability company,
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`organized under the laws of the State of Wisconsin with its principal place of business in Monroe,
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`Wisconsin. Badger State is an ethanol producer that sells that ethanol to others primarily pursuant
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`to Producer Sales Contracts.
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`18.
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`Plaintiff Fox River Valley Ethanol, LLC (“Fox River”) is a limited liability
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`company, organized under the laws of the State of Wisconsin with its principal place of business
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`in Oshkosh, Wisconsin. Fox River is an ethanol producer that sells that ethanol to others primarily
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`pursuant to Producer Sales Contracts.
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`19.
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`Plaintiffs UWGP, Didion, ACE, Badger State and Fox River are referred to
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`collectively herein as the “Wisconsin Plaintiffs.”
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`20.
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`Plaintiff PLCP, LLLP (“Pine Lake Corn”) is a limited liability limited partnership,
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`organized under the laws of the State of Iowa with its principal place of business in Steamboat
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`Rock, Iowa. Pine Lake Corn is an ethanol producer that sells that ethanol to others primarily
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`pursuant to Producer Sales Contracts.
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`21.
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`Defendant Archer Daniels Midland Company (“ADM”) is a corporation organized,
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`created, and existing pursuant to the laws of the state of Delaware with its North American
`
`headquarters at 4666 Faries Parkway, Decatur, Illinois 62526 and its global headquarters at 77
`
`West Wacker Drive, Chicago, Illinois 60601. Upon information and belief, all of ADM’s ethanol
`
`trading operations, including its trading in Chicago Ethanol Derivatives, was directed from its
`
`North American headquarters in Decatur, Illinois.
`
`JURISDICTION AND VENUE
`
`22.
`
`The Court has subject matter jurisdiction over the Plaintiffs’ federal antitrust
`
`claims, brought under Section 2 of the Sherman Act, 15 U.S.C. § 2, and Sections 4 and 16 of the
`
`Clayton Act, 15 U.S.C. §§ 15 & 26, pursuant to 28 U.S.C. §§ 1331 & 1337. The Court has
`
`supplemental jurisdiction over the Plaintiff’s state law claims under 28 U.S.C. § 1367.
`
`23.
`
`The Court has personal jurisdiction over the Defendant because ADM has its North
`
`American headquarters in this District; (2) ADM has its global headquarters in the State of Illinois;
`
`(3) ADM transacted business in the State of Illinois, including in this District, during the Relevant
`
`Time Period; (4) ADM had substantial contacts with the State of Illinois, including in this District,
`
`during the Relevant Time Period; and (5) the claims brought in this lawsuit arise out of actions
`
`taken by ADM in the State of Illinois, including actions taken in this District.
`
`24.
`
`Venue is proper in this District under 28 U.S.C. §1391(b), (c), and (d). Defendant
`
`ADM resides, transacts business, and has agents in this District; the claims brought in this lawsuit
`
`
`
`9
`
`

`

`2:20-cv-02314-CSB-EIL # 1 Page 15 of 63
`
`arise out of events or omissions that occurred in this District; and a substantial portion of the
`
`affected interstate trade and commerce described herein occurred in this District.
`
`25.
`
`The activities of ADM were within the flow of, were intended to, and did have a
`
`substantial effect on the interstate commerce of the United States, including the Argo Terminal
`
`Market, the U.S. Ethanol Market, and the market for financial derivatives based on ethanol.
`
`26.
`
`Filing this case in the Urbana Division of the Central District of Illinois is proper
`
`because ADM’s manipulative activities were conceived of and directed from its North American
`
`headquarters in Decatur, Illinois, which is within Macon County, Illinois and part of the Urbana
`
`Division per Local Rule 40.1.
`
`FACTUAL ALLEGATIONS
`
`A.
`
`The Ethanol Market in the United States.
`
`27.
`
`Ethanol is a clear, colorless simple alcohol. Plaintiffs and ADM produce ethanol
`
`primarily from corn and sell it for use as a renewable fuel and additive. Ethanol is a unique
`
`commodity product.
`
`28.
`
`The current domestic ethanol market was largely created by federal law and state
`
`regulations that set renewable fuel requirements for transportation fuel. In particular, the
`
`Renewable Fuel Standard originated with the Energy Policy Act of 2005 which increased the
`
`volume of renewable fuel that must be blended into gasoline. The Renewable Fuel Standard was
`
`expanded and extended by the Energy Independence and Security Act of 2007.
`
`29.
`
`Renewable Fuel Standards require gasoline producers to buy a certain quantity of
`
`renewable fuels (such as ethanol) each year to blend into gasoline used as transportation fuel.
`
`Ethanol is the renewable fuel most used by obligated parties to meet this renewable fuel
`
`requirement. Legal and regulatory requirements play a large role in the demand for ethanol by
`
`
`
`10
`
`

`

`2:20-cv-02314-CSB-EIL # 1 Page 16 of 63
`
`creating a class of “ethanol consumers” consisting mostly of refineries, importers, blenders, and
`
`general gasoline resellers.
`
`30.
`
`Buyers in the ethanol market get their ethanol primarily in two ways. First, they can
`
`buy ethanol directly from an ethanol producer, contracting to have the Producer ship ethanol
`
`straight to the buyer’s facilities for blending with gasoline that is then shipped to retail markets.
`
`Second, they can choose to buy ethanol at te

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