January 14, 2013
Pennsylvania, Tennessee

Federal case over soured wind energy deal sent out of Pennsylvania

By Saranac Hale Spencer / The Legal Intelligencer | Pittsburgh Post-Gazette | January 14, 2013 | www.post-gazette.com

A federal judge in the Western District of Pennsylvania has transferred a case stemming from a wind turbine project in Cambria County, Pa., to the Eastern District of Tennessee.

Because a debt owed to one of the four separate companies involved in the project will likely weigh on the bankruptcy proceedings of another already under way in Tennessee, that district is a better venue for the case, said U.S. District Judge Kim Gibson of the Western District of Pennsylvania in Siskin Steel & Supply v. Highland North.

The four companies, two of which are based in Tennessee and none of which are based in Pennsylvania, are linked by a paper chain of contracts. At the top of the chain is Highland North, which had a lease on the Adams Township, Pa., property for the wind farm and contracted with Nordex USA to supply the turbines.

The Highland North Wind Farm was conceived in 2010. Over the last decade, Cambria, Somerset and Blair counties have emerged as a popular area for wind farms, and Highland North – a 75-megawatt costing about $120 million – is one of the most recent to come online, adding 32 wind turbines to the hundreds already dotting the Laurel Highlands landscape.

Nordex subcontracted some of the fabrication work to SIAG Aerisyn, which entered into purchase-order contracts with Siskin Steel & Supply Co. for steel plates to be used in making the turbines, according to the opinion.

Siskin filed a mechanic’s lien in the Court of Common Pleas of Cambria County, which was later removed to the Western District of Pennsylvania after SIAG filed for bankruptcy in Tennessee. Siskin claims that it is owed nearly $1 million.

According to SIAG’s bankruptcy petition, Siskin is one of its largest creditors, listed at $998,659, Judge Gibson said.

Siskin resisted the move to a new federal venue, asking the court instead to remand its case to Pennsylvania state court, arguing that the mechanic’s lien is unrelated to SIAG’s bankruptcy proceedings. Judge Gibson wasn’t convinced.

After finding that case would be properly removed, Judge Gibson held that the Eastern District of Tennessee would be the appropriate venue for several reasons.

“While it is true that the mechanic’s lien complaint is based on Pennsylvania law and the ownership of property is in Pennsylvania, [the case] is also more likely to be in the interest of the state of Tennessee than that of Pennsylvania to resolve this controversy because of its significant connection [to] the SIAG bankruptcy proceeding,” the judge said.

Neither Kevin McKeon of Watt, Tieder, Hoffar & Fitzgerald in McLean, Va., who represented Siskin, nor Jonathan Young of Edwards Wildman Palmer in Chicago, who represented Highland, could be reached for comment.