The city of Denton sued Biodiesel Industries Inc. and its local affiliate for breach of contract Thursday, saying the company failed to produce enough biodiesel fuel and ceased production at least twice without warning.

The California-based company notified the city about two weeks ago that it had shuttered its Denton plant, saying it could no longer operate the plant profitably, according to the lawsuit.

Company officials could not be reached for comment.

The city filed the suit in federal district court two days after Denton City Council members voted to sever ties with the company and sue over its performance. The plant, which turned used frying oil into biodiesel, operated at the city landfill on Mayhill Road under a public-private partnership.

The lawsuit claims the company never lived up to its pledges to the city under a 2004 contract. The suit seeks to recover a portion of the $650,000 the city provided for plant equipment. It also asks for an unspecified amount in actual damages.

“I know that the city intends on exercising whatever remedies are available to recover what it can in this matter, not just through litigation but also through continued negotiations,” said Clark McCoy, lead attorney for the city.

According to the lawsuit, the company’s contract violations included:

n Failing to produce the required minimum of 300,000 gallons of biodiesel per year for the city to buy at discounted rate.

n Partially or fully shutting down its Den­ton plant at least two times since 2007 without warning the city.

The $3 million facility opened to much acclaim in 2005 as the nation’s first fully renewable biodiesel manufacturing plant. It was powered by methane gas extracted from the landfill.

The city contracted with Biodiesel Industries in March 2004 to build the plant, offering $650,000 to help equip it. The city also pledged to buy at least 300,000 gallons of biodiesel each year to fuel its garbage trucks, service trucks, buses and other equipment that previously used diesel fuel.

McCoy said the plant’s production levels varied but fell far short of the 300,000-gallon minimum.

LOWELL BROWN can be reached at 940-566-6882. His e-mail address is lmbrown@dentonrc.com .