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Judge's ruling could signal end of raisin marketing order

In what is called a proposed statement of decision after court trial, a superior court judge in Sacramento, CA, has stated that the "adoption and approval of the Marketing Order for California Raisins" by the California Secretary of Food & Agriculture, which formed the California Raisin Marketing Board in 1996, was "invalid as a matter of law" and that the marketing order itself is, therefore, invalid.

The proposed statement of decision by Judge Raymond M. Cadei was issued April 15 after about seven weeks of trial.

According to Brian Leighton, the Clovis, CA-based attorney for the plaintiffs in the case, the proposed statement of decision is essentially the judge's statement of what he expects his final decision to be unless the parties involved in the litigation are able to change his mind by pointing out where he may have overlooked or overstated key facts.

Plaintiffs have a "very limited time to file objections, but it is not likely his decision is going to change," Mr. Leighton told The Produce News April 29.

Mr. Leighton said that he expects the judge to issue a permanent injunction by the end of May or middle of June "directing the defendant to cease all activities under and enforcement of the [marketing] order including the collection of assessments."

"From our perspective, there are legal options that we are still working on and measuring," Gary Schulz, president of the California Raisin Marketing Board, told The Produce News April 29. "We do have a board meeting tomorrow, [at] which we are going to consult with our legal counsel and probably make some decisions, but our current status is that we are open for business. We are working with our legal team to explore our options and prepare for our next legal steps."

Mr. Schulz declined to comment on the various issues that are subject to trial here, saying, "I am not going to argue the trial in the media. We can say that we are working very hard with our legal team to prepare for our next legal steps and to examine all of our options that are available. I can say that, but I don't want to comment on the ruling nor the case itself."

According to court documents, the plaintiffs in the case, which include Boghosian Raisin Packing Co. and Lion Raisin Inc., challenged the marketing order for California raisins on various constitutional and statutory grounds. The defendant is the secretary of the California Department of Food & Agriculture, which adopted the marketing order and oversees its administration by the California Raisin Marketing Board.

The board collects mandatory assessments from raisin growers and packers and uses the money raised through such assessments to engage in an advertising and promotional program intended to raise consume awareness of California raisins, with the goal of increasing sales.

Judge Cadei stated in the conclusion to his proposed statement of decision that "there was no evidence that the California raisin-growing industry was suffering from the type of severe economic crisis" that the California Agricultural Marketing Act of 1937, which gives authority for the formation of state marketing orders, "was intended to address" or that governmental intervention "was necessary to preserve the raisin- growing industry from destruction, to maintain the purchasing power of producers, or to protect the food supply of the people of this state," which were criteria specified under the act.

"We showed [during the trial] that there was no crisis in the industry" at the time the raisin marketing order was adopted, Mr. Leighton said. "What existed did not necessitate a state raisin marketing order for promoting and advertising raisins, and that is what the judge found."

Judge Cadei's proposed statement of decision, which will stand unless he alters the statement in his final decision, "ordered a refund of all of the assessments that have been escrowed, and that is several million; ordered a refund of all assessments that have been paid; and stated with respect to my clients we don't have to pay anything, because we just refused to pay all those years," Mr. Leighton said.

The plaintiff's options include appealing the final decision in appellate court.