Biodiesel Producer Hit with Another Lawsuit

John Davis

The developer of what will be the world’s biggest biodiesel plant… if it gets built… has been hit with another lawsuit, the second one this year.

seenergy1.gifSmiling Earth Energy has plans to build a 320-million-gallon-a-year biodiesel plant along the Chesapeake Bay in Virginia. But the company has had its troubles recently, including a lawsuit by an Oregon biodiesel company for failing to provide the promised $310 million in financing for a West Coast biodiesel plant… and then refusing to return a $100,000 deposit to the Oregon company (see my October 29, 2007 post). Now, Smiling Earth is being hit with a lawsuit by a handful of people who loaned $250,000 to the California company, accusing it of fraud, breach of contract, and racketeering. This story in the Virginian-Pilot has more:

The federal lawsuit accuses Smiling Earth, which is planning the world’s largest biodiesel plant in Chesapeake, of promising “investment returns” on the loans but never giving any of the money back. The plaintiffs are seeking damages of about $2 million.

This is the second lawsuit to be brought to light since the Chesapeake City Council voted 7-2 in October to allow the plant.

“It’s been a sad chain of events,” said Chesapeake Mayor Dalton Edge, who supported the proposal. “We gave them a chance. We were hopeful, but we haven’t given them a dime of taxpayer money.”

In an e-mail, Smiling Earth principal Clifford Cowles wrote that “the company does not comment on pending litigation.”

The lawsuit was brought on behalf of two Utah residents, Rick Foy and Jenni Braunberger, and a California couple, Dean and Deborah Lane, according to court documents.

The litigation says Smiling Earth continually promised the investors they would get their money back with investment returns.