Chippewa Valley, Glacial Plains litigation appears at end: District court order allows for end of contract
BENSON -- A district court order is possibly the final word in over four years of litigation between the Chippewa Valley Ethanol Company and Glacial Plains Cooperative, both of Benson.
BENSON - A district court order is possibly the final word in over four years of litigation between the Chippewa Valley Ethanol Company and Glacial Plains Cooperative, both of Benson.
District Judge Charles Glasrud ruled last week that a "reasonable time" had elapsed in the contract which had made GPC the exclusive corn handler for the ethanol company. That makes it possible for CVEC to terminate its contract with GPC, which it had originally sought to do when the litigation began in 2014.
GPC had opposed CVEC's decision to end the contract, which was signed in 1994 when CVEC was launched. GPC argued the original contract was meant to continue indefinitely.
The district court agreed with GPC in a 2015 order. CVEC appealed to the state Court of Appeals and ultimately the Minnesota Supreme Court, where a seven-judge panel ruled unanimously in favor of CVEC. The Supreme Court justices ruled that the contract was not of perpetual duration, but of indefinite duration, which meant that CVEC had the right to terminate it. It could do so when a "reasonable time" had elapsed to allow GPC to recoup its investments in becoming the corn handler for CVEC.
The Supreme Court remanded the case to district court, where the litigation began, with instructions to determine when or if a reasonable time had elapsed.
District Judge Glasrud wrote in his ruling that the evidence was clear that GPC "has not only recouped its investment already but has profited handsomely." That met the standard for determining whether a reasonable time had elapsed.
David Thompson, chairman of the board of directors for CVEC, welcomed the ruling. He did not portray the case as being one party prevailing at the expense of another. "Both parties came out whole on this thing,'' he said.
GPC had recouped its investment and made a profit in return for its willingness to take a risk and handle corn for CVEC when it was one of the state's first ethanol companies.
"I guess we feel they got it right,'' the chairman said of the court's decision.
Thompson and Chad Friese, CVEC general manager, said they are hopeful the recent ruling is the end of litigation for the two parties. Friese said what could be the final order clears things up, noting that it can be difficult to move forward when litigation is pending.
Tom Traen, general manager for GPC, said the cooperative's board of directors and its attorneys will be meeting this week and reviewing the recent order. At this point, he said, nothing has been decided on whether or not to appeal the order. GPC has the right to appeal the district court order.
The litigation has involved two cooperatives who share many members, with an overlap of 60 to 70 percent, according to an estimate by the state Supreme Court.