PIERRE, S.D. —A Wyoming feed company is facing a possible injunction for buying South Dakota grains after doing business in the state for over a decade without proper licensing.
The Public Utilities Commission after a testy debate on Wednesday, Aug. 7, voted 2-1 to pursue an injunction against High Country Mercantile for making more than 100 grain purchases from South Dakota farmers without the state-mandated grain buyer license.
South Dakota requires that anyone who purchases grain for the purpose of reselling, or purchases over $300,000 in grain from South Dakota farmers, needs to obtain a license from the PUC and place a bond. Failing to be properly licensed before buying is a Class 1 misdemeanor, punishable by a $1,000 civil fine per violation up to $25,000.
High Country Mercantile has a middle-man business model, sourcing ingredients from farmers to be resold to animal feed manufacturers. Owner Pam Connally told commissioners Wednesday that she had been "in the dark," unaware that her company was violating state statute during the 15 years they have done business in South Dakota.
"This would be a devastating blow to my company," Connally said. "There is no excuse for ignorance of the law, but it was never brought to my attention."
PUC staff first notified High Country of its violations in late January, and High Country submitted an application for a license by late March. However, the company has not submitted the necessary financial statements in order to be approved.
According to its complaint, PUC staff are aware of more than 100 unlicensed grain purchases High Country made in South Dakota since the start of 2018, far exceeding the maximum fine of $25,000 the PUC has authority to impose. Thirty of those purchases were made after the PUC reached out to High Country in January.
PUC Chair Gary Hanson, who voted against seeking an injunction, said he empathized with Connally, understanding from his previous years as a business owner the toll that a court battle could take on High Country's operations. But Vice Chairman Chris Nelson and Commissioner Kristie Fiegen were adamant that the state's law must be followed in order to protect South Dakota grain sellers in the future.
"In South Dakota, we're a business-friendly state, but we also have to protect our citizens," Fiegen said.
But cutting High Country off would be a loss for South Dakota, Connally said.
"High Country’s economic benefits to South Dakota are significant," she said. "It is not in South Dakota's best interest that we not be able to do business with them, not to mention the fact that it would probably just destroy my business."
PUC staff ultimately said they would try to work with Connally to grant a license before an injunction is granted in circuit court.