Business & Real Estate

Appellate court justifies state’s raisin marketing effort

Grapes turn into raisins by soaking up the sunlight in Fowler.
Grapes turn into raisins by soaking up the sunlight in Fowler. Fresno Bee file

An appellate court ruled Friday that the state did not overstep its bounds in 1998 when it set up an agency to promote California raisins.

Elements of the raisin industry are challenging the need for the California Raisin Marketing Board, saying it was established under the auspices of a 1937 state law that was geared to Depression-era economics but has no viability under present-day conditions.

After the end of the iconic promotional campaign of the California dancing raisins to the tune of Marvin Gaye’s 1968 hit “I Heard It Through the Grapevine,” some in the industry thought a new promotion was needed to address the recurring issue of too much supply and too little demand.

So, under the Marketing Act of 1937, what is now the Department of Food and Agriculture adopted in 1998 a marketing order “in the public interest” that created a raisin board of growers to conduct market development toward improving “the demand for all categories of raisin usage.” The work of the board is funded by an assessment of 2 percent of the field price on each ton of raisins delivered to packers.

In consolidated lawsuits, industry interests sued the department, alleging its order is invalid on an array of grounds. The plaintiffs want their assessments refunded – going back to the 1998-99 crop year.

After a non-jury trial, Sacramento Superior Court Judge Raymond M. Cadei granted judgment for the plaintiffs, ruling that the evidence did not show the department’s action “was necessary to address adverse economic conditions in the raisin-growing industry that were so severe as to threaten the continued viability of the industry,” and invalidating the existence of the raisin board.

But, in an opinion Friday, a three-justice panel of the 3rd District Court of Appeal reversed Cadei, saying he erroneously limited the 1937 act’s applicability “only to Great Depression-like economic circumstances.” The panel sent the matter back to Cadei “for further proceedings consistent with this opinion.”

While the law “may have its roots in the Great Depression, it also has branches that extend to the contemporary world of agriculture,” Associate Justice M. Kathleen Butz wrote for the unanimous panel. Presiding Justice Vance W. Raye and Associate Justice Ronald B. Robie concurred.

Clovis attorney Brian Leighton, one of the plaintiffs’ lawyers, stressed Friday, “This is just Round One. Now we go back for Round Two. The appeal court just said Judge Cadei went too far. But there are a lot of issues left in the lawsuit that he did not reach because his verdict disposed of the case.”

As issues still to be decided, Leighton cited his clients’ claims that the raisin board and its duties interfere with growers’ constitutionally guaranteed freedom of speech and association, that they exceed the state’s police powers and that they are inconsistent with the provisions of the 1937 act.

“This is not a complete victory for the state by any means,” Leighton said.

Denny Walsh: 916-321-1189