A renewable energy project intended to convert landfill gas into pipeline-quality natural gas has resulted in a lawsuit seeking over $44 million in damages due to alleged failures in design, engineering, and construction. The complaint was filed by Bio Energy (Ohio IT), LLC against Stearns, Conrad and Schmidt, Consulting Engineers, Inc., doing business as SCS Energy, and Adsorption Research Inc., doing business as Kent S. Knaebel and Associates Inc., in the United States District Court for the Northern District of Ohio on April 10, 2026.
According to the court filing, Bio Energy contracted with SCS Energy to deliver a fully operational landfill gas processing facility in Lorain, Ohio. The project was meant to upgrade an existing site to produce renewable natural gas suitable for injection into a commercial pipeline. SCS Energy was responsible for all aspects of the project’s design, engineering, procurement of materials and equipment, construction services, and labor. SCS subcontracted key system design work to Adsorption Research Inc. (ARI).
The complaint states that instead of delivering a functioning facility capable of meeting contractual requirements—including methane recovery rates—SCS delivered what Bio Energy describes as “a fundamentally defective and non-operational facility plagued by pervasive design and engineering failures.” The plaintiff alleges that these failures have left the project unable to achieve its intended purpose without substantial remedial work.
Bio Energy claims that SCS failed to meet both substantial completion and final completion deadlines set out in their contract. The contract required substantial completion within 69 weeks after September 16, 2021 (by January 12, 2023), with final completion eight weeks later (by March 9, 2023). Liquidated damages were specified at $10,000 per day for the first 30 days past deadline and $15,000 per day thereafter for delays on substantial completion; final completion delays were set at $3,000 per day.
The filing reports that liquidated damages now exceed $16 million due to these delays. In addition to delay penalties, Bio Energy seeks performance buy-down damages exceeding $5.7 million because the delivered system allegedly failed to meet minimum methane recovery rates promised by SCS—falling short at only 88% compared to the required minimum of 96.4%. Furthermore, costs associated with investigating and repairing damage caused by faulty pipeline work are claimed at over $3.3 million.
The complaint details how ARI’s involvement became central after SCS initially lost its bid for the project but then submitted an updated proposal featuring ARI’s novel CO2 Rejection Unit technology—a system previously described by SCS itself as “unproven” during initial bidding rounds. Despite earlier reservations about this technology’s reliability at full scale operation, SCS later assured Bio Energy that it would meet or exceed methane recovery guarantees if implemented.
Bio Energy asserts that both defendants worked closely together throughout the project but failed jointly on critical aspects such as system integration and operational reliability. According to the suit: “These failures stem from SCS’s inability to coordinate and execute critical systems within the Project, including failures attributable to its design subcontractor ARI.” Specific technical issues cited include adsorbent flaws affecting methane recovery rates; depressurization flaws related to control valve choices; blowdown cycling errors based on incorrect simulation data; recurring noise violations; water accumulation leading to plant shutdowns; improper staffing practices; unauthorized delegation of responsibilities; failure to vet third-party contractors; among others.
After problems became apparent around October 2023—when it was discovered that ARI’s systems could not process contracted landfill gas quantities—SCS and ARI attempted redesigns labeled as “improvements.” However, Bio Energy alleges these efforts were actually attempts at “completely rehaul[ing] the deficient design” rather than making incremental fixes.
In addition to breach of contract claims against both defendants (with Bio Energy identified as an explicit third-party beneficiary under agreements between SCS and ARI), counts include breach of express warranty against ARI; professional negligence due to defective construction against SCS; professional negligence due to defective design against ARI; negligent misrepresentation against both defendants; gross negligence against both defendants; along with requests for pre-judgment interest, post-judgment interest, attorneys’ fees as provided by contract or law,
and other relief deemed just by the court.
Bio Energy is seeking monetary judgment totaling no less than $44,769,915.75 from SCS—which includes liquidated damages ($16 million+), investigative/corrective pipeline work ($3 million+), performance buy-downs ($5 million+), plus costs for diagnosing/correcting all defects (over $19 million). Against ARI (jointly with SCS), they seek no less than $19.4 million specifically tied
to diagnosing/correcting all design defects.
The attorneys representing Bio Energy are Thomas O. Crist and Jonathon Korinko of Benesch Friedlander Coplan & Aronoff LLP based in Cleveland,
Ohio. The case identification number is 4:26-cv-00861.
