Attorney General Files Consumer Protection Lawsuit Against Shorewood Businessman

A Shorewood man is being sued by Minnesota’s Attorney General for consumer fraud, deceptive trade practices, false advertising, unjust enrichment, breach of fiduciary duty and failing to obtain a certificate of authority to do business in Minnesota.

A 39-page summons filed in District Court and made public late last week outlines a complicated civil suit filed against and its owner Shawn Dooling. The company marketed itself to rural farmers as a “turn key” wind turbine specialist with experience in state and federal subsidy laws.

The lawsuit is being filed by Attorney General Lori Swanson under the umbrella of consumer protection and claims Dooling used hundreds of thousands of dollars in proceeds from business transactions to acquire “exotic cars” that include a Ferrari, two Bentleys and Lamborghini while customers in mostly rural areas of the state lost six-figure investments. In some cases, customers never received their promised wind turbines.

Dooling formed Renewable Energy SD about 60 days after passage of federal legislation signed by President Obama intended to strengthen the nation's clean energy output.

Assistant Attorney General James W. Canaday will argue the case in court for the State of Minnesota.

Background:

Renewable Energy SD is a South Dakota LLC headquartered in Excelsior. The company formed in 2009, soon after federal passage of the American Recovery and Reinvestment Act. Part of the legislation created a program to provide cash grants, called 1603 grants, to individuals who purchase renewable energy projects such as wind turbines with a capacity of less than 100 kilowatts.

The Attorney General’s lawsuit contends Renewable Energy SD markets itself to farmers as a wind energy developer that utilizes federal and state laws to help subsidize wind turbine systems.

Administered by the U.S. Department of the Treasury, an approved 1603 Grant covers 30 percent of the project, and funds are disbursed only after the system is operational. Verification of completed installation is done through commissioning reports submitted to the Treasury Department that certify systems are installed, tested and capable of being used for intended purposes. Annual progress reports must also be submitted by 1603 Grant recipients for five years and include energy output computations.

Some states, including Minnesota, received block grants from the federal government that were administered by the Department of Commerce and available in $10,000 increments on a first-come, first-served basis. This program expired in 2010.

In its suit against Renewable Energy SD, the Minnesota Attorney General’s Office contends the company’s marketing and solicitation campaigns promised farmers that all aspects of applying and qualifying for a 1603 Grant—including permitting, installation and commission of wind turbine systems—would be taken care of, and the grants used to finance installation would not need to be repaid.

Allegations of Business Misconduct:

A key pillar of Renewable Energy SD’s business plan was to take maximum advantage of what is known as Minnesota’s net metering law—which requires utility companies to pay consumers retail rates for electricity generated by wind projects generating less than 40 kilowatts. This “revenue” was cited by the company’s marketing literature as eventually playing a role in paying back an upfront investment.

Some people claim to have paid Renewable Energy SD more than $100,000 for wind turbines that failed to generate any income. Some never even broke ground.

At least four farmers have filed individual lawsuits against Renewable Energy SD—three of which have been settled out of court through confidential agreements. The fourth, filed in Olmstead County, remains open.

The Attorney General’s suit claims Renewable Energy SD has, in some cases, not installed promised and paid for turbine systems or failed to maintain systems—putting farmers at risk of not complying with 1603 Grant requirements.

The suit goes on to summarize accounts of several customers who would testify at trial about their dealings with Dooling and Renewable Energy SD. All lost money and claim a wide range of ethics and malpractice complaints.

As of Jan. 24, Renewable Energy SD’s corporate registration in South Dakota was delinquent, according to court records. The Minnesota Secretary of State’s Office revoked Renewable Energy SD’s certificate to do business in Minnesota due to a failure to file renewal papers, although court documents allege Renewable Energy SD continued to do business in the state even after its finalization.

Dooling has 20 days to respond to the summons filed last Friday and submit answers to the Attorney General's complaints.

Lake Minnetonka Patch will have updates on this story when additional details become available.