Bayer Sues AltEn for Breach of Contract Due to the Abandonment of its Ethanol Production Facility

On Wednesday, Bayer US LLC filed a complaint in the District of Nebraska against AltEn, LLC, Mead Cattle Company, LLC, Green Disposal Mead LLC, Platte River Green Fuels, LLC and Tanner Shaw alleging breach of contract. 

According to the complaint, AltEn, Mead Cattle Company, Green Disposal Mead and Platte River Green Fuels are operated and managed by defendant Tanner Shaw, and each company shares common facilities in Mead, Nebraska and Lake Quivira, Kansas.

Further, the complaint states that Bayer is a Delaware limited liability company that provides treated seeds to companies for the production of ethanol among other products and services. The plaintiff alleges that in June 2016, Bayer and AltEn entered into a standard Renewable Resource Material Agreement for the sale of treated seed for ethanol production by AltEn, which required AltEn to utilize the seed in a safe and lawful manner, obtain any required permits and to comply with all applicable laws and regulations. Further, the complaint purports that the Resource Material Agreement transferred all title, risk of loss and all other incidents of ownership from Bayer to AltEn. 

The complaint alleges that, despite AltEn’s representations in the Renewable Resource Material Agreement and to the Nebraska Department of Agriculture, the department discovered several violations in AltEn’s management and disposal of wet cakes, a byproduct of ethanol production from treated seeds. Additionally, the complaint states that on September 23, 2019, the Nebraska Department of Environment and Energy issued a notice of violation for AltEn’s storage and lack of disposal of wet cake at its facility and on February 4, 2021, it issued a complaint and order requiring AltEn to cease the discharge of industrial wastewater from wet cakes. 

The plaintiff purports that on February 8, 2021, the defendants stopped producing ethanol and shut down the AltEn facility. Additionally, Bayer alleges that due to the defendants’ abandonment of the facility, a frozen pipe on the facility ruptured, spilling out a significant volume of waste materials including wet cakes. The plaintiffs allege that following the defendants’ abandonment of the facility and disregard of orders by various regulatory authorities, Bayer and other seed companies began voluntarily coordinating with the Nebraska Department of Environment and Energy on efforts to address the conditions at the AltEn Facility and have since spent millions of dollars on clean up efforts. 

Bayer’s actions have tracked other seed companies, such as Syngenta, by filing a lawsuit against the defendants to recover declaratory and injunctive relief, damages, pre- and post-judgment interest, attorney’s fees and costs. In the complaint, Bayer brings eight causes of action including breach of contract, breach of contractual indemnity, common law indemnity, contribution, equitable subrogation, unjust enrichment and fraudulent misrepresentation. Bayer is represented by Spencer Fane LLP.