Judge rules on injunction, SEPA, NDSP

“But the law does not allow or require these parties to continue to negotiate for this under the circumstances, especially in light of the speculative nature of the harms that have been presented,” Stiel said.

“We very much appreciate the Court’s ruling today as both a matter of law and as a matter of common sense. Our goal remains unchanged: to build and to bring to life North Dakota’s first soybean processing facility that will create new jobs and new economic opportunities for North Dakota farmers,” Connie Ova, CEO of the Jamestown/Stutsman Development Corp. and SEPA, said in a statement.Representatives of North Dakota Soybean Processors Association declined to comment.

The ruling removes a temporary restraining order granted on Tuesday, Aug. 13. While the injunction no longer is in place, the case will move toward a possible trial on whether SEPA breached its contract with NDSP. NDSP has sought to either be allowed to build per the contract with SEPA or for SEPA to pay the $7 million NDSP incurred in the planning phase.

NDSP, a subsidiary of Minnesota Soybean Processors, in 2017 announced plans to build a soybean-crushing facility at Spiritwood. Funding was slower than expected for the project. SEPA announced on July 24, 2019, it was pulling out of the deal by invoking a “convenience clause” in the contract between the entities.

NDSP’s attorneys argued that SEPA, which is a joint operation of the Jamestown/Stutsman Development Corp. and Great River Energy, effectively “waived” the clause by not bringing it up after a March 31, 2018, deadline. SEPA’s attorneys, however, said there was no sunset on the clause and that even by July 2019, NDSP had not completed work on two documents that would have effectively removed SEPA’s ability to invoke the clause.

Steven Wells, one of the attorneys for NDSP, said in court that NDSP had raised and secured financing for the project in July.

“It came slower than anyone anticipated,” he conceded in court Thursday.

SEPA, he said, had not finished its “site work” obligations, including acquiring additional property adjacent to the existing Spiritwood Energy Park.

Wells said SEPA’s decision to terminate the contract had “no explanation,” and he believes the decision to terminate was made after SEPA had begun negotiating with “Company X” to build a soybean-crushing plant at Spiritwood. Wells said NDSP believes “Company X” is Archer Daniels Midland; SEPA attorneys did not dispute that, and court documents in the case also refer to ADM.

“They had already decided to go with ADM,” Wells said.

However, a timeline laid out by SEPA attorney Bryant Tchida showed that SEPA had been open about waiting until funding had been secured to finish site work and about talking to other companies.

Tchida’s timeline explained how NDSP had missed several funding deadlines and had not begun negotiating with Great River Energy about things like wastewater and steam. Tchida brought up public meetings in which officials from Great River Energy and state government had raised concerns about NDSP’s business practices and the viability of their plan.

Tchida said farmer and North Dakota state Rep. Craig Headland, R-Montpelier, at an April 11, 2019, meeting said he was planning to pull his investment in the plant and believed other farmers would do the same. Lt. Gov. Brent Sanford at the same meeting expressed concerns about the project’s viability, Tchida said. Also discussed at the meeting was another company’s interest in building at SEPA.

“Everybody knows another entity is interested in this site,” Tchida said, disputing that NDSP was unaware of that.

Shortly after the meeting, NDSP fired its CEO, Scott Austin. But, Tchida said, NDSP still did not negotiate with Great River Energy and there still were concerns about financing.

Tchida said NDSP was aware SEPA was considering terminating the contract by way of the “convenience clause” and did not dispute it was an option until after the fact. NDSP could have completed the necessary documents with SEPA to have ended the possibility of contract termination.

“NDSP controlled its own destiny,” Tchida said.

Fargo – Sep 12 – North Dakota East Central District Judge Stephannie Stiel today dissolved a temporary restraining order placed upon Spiritwood Energy Park Association, LLC (SEPA) in August in connection with a lawsuit filed against the organization by North Dakota Soybean Processors, LLC (NDSP). In a decision from the bench, Judge Stiel found that NDSP had failed to meet the legal and factual standards required to keep the TRO in place. The ruling came at the conclusion of a two-hour hearing in which both parties presented arguments to the Court.

“We very much appreciate the Court’s ruling today as both a matter of law and as a matter of common sense,” said Connie Ova, SEPA’s Chief Operations Officer. “Our goal remains unchanged: to build and to bring to life North Dakota’s first soybean processing facility that will create new jobs and new economic opportunities for North Dakota farmers.”

Judge Stiel’s ruling today affirms SEPA’s decision to terminate its preliminary agreement with NDSP and to continue its efforts to seek a new construction partner for what would be North Dakota’s first soybean processing facility.

Ova continued: “Our sole purpose is to create jobs and economic activity for Jamestown, for Stutsman County and the surrounding area, and for North Dakota. We have no interest in defending unfounded lawsuits when our time and resources could be better spent creating jobs for our residents and markets for our farmers. This ruling lets us achieve those goals.”

About Spiritwood Energy Park Association

SEPA’s sole function is to manage the Spiritwood Energy Park, a 551-acre industrial park located approximately 10 miles east of Jamestown, North Dakota, and just south of Spiritwood, North Dakota.  The park adjoins the Great River Energy combined heat and power plant, and is currently home to Dakota Spirit AgEnergy, a 65 million-gallon-per-year bio-refinery that produces ethanol, distillers grains, and fuel-grade corn oil.

SEPA provides common-use transportation infrastructure, industrial lots, property management and value-added services on a fee-for-service basis to new and expanding businesses of the industrial park.  The association is majority-owned and operated by the Jamestown/Stutsman Development Corporation with Great River Energy being the minority owner. JSDC was organized to develop employment, improve business conditions, and advance the interests of the City of Jamestown and Stutsman County, North Dakota, by implementing and sustaining an organized effort to attract new business and industry, support existing business and industry, and encourage new business starts.