Business & Real Estate

UC Davis, strawberry growers settle big lawsuit

A strawberry plant grows in a UC Davis greenhouse, the offspring of one of the 1,500 strawberry cultivar mother plants on campus.
A strawberry plant grows in a UC Davis greenhouse, the offspring of one of the 1,500 strawberry cultivar mother plants on campus. Sacramento Bee file

The great UC Davis strawberry war ended Monday.

UC Davis and California’s strawberry growers announced they have settled a pair of potentially poisonous lawsuits over a long-standing research partnership that has earned millions for the university and brought vast improvements in taste and durability to consumers.

Key to the settlement: UC Davis announced the hiring of a new director of strawberry breeding, ensuring the program will continue churning out additional varieties of the fruit for years to come.

The agreement patches up a relationship that has helped California’s $2 billion-a-year strawberry industry flourish. California produces 90 percent of the nation’s strawberries. Varieties bred by UC Davis researchers and licensed to the industry account for about half the state’s crop.

The marriage has generated tens of millions of dollars in royalties for the University of California, and the dispute had left UC Davis squirming. As a public land-grant university that devotes half of its 5,300-acre campus to cropland, barns and other agricultural facilities, getting sued by a group of farmers put UC Davis in an uncomfortable spot.

Restoring peace was “quite important,” said Jacob Appelsmith, chief campus counsel at UC Davis. “We want to have positive relationships with all of our agricultural constituents. ... They are an important one.”

The dispute began in 2012, when UC Davis’ two star strawberry breeders disclosed they were quitting to form their own company. A year later, the university was sued by the California Strawberry Commission, the official marketing and promotion arm of the strawberry industry and its 400 growers.

The commission charged that UC Davis was planning to end its breeding program and allow the two departing scientists to take with them a vitally important catalog of strawberry plants. This important library of technological know-how, once available to every strawberry farmer in the state, was in danger of being “privatized.”

UC Davis denied the allegations and filed its own lawsuit, claiming the growers were guilty of unfair business practices. The twin cases percolated in U.S. District Court in Oakland until Monday, when the two sides announced they were embarking on a new era of cooperation.

“The hiring of the new plant breeder and the commitment to continue the public program were critical to resolving the dispute,” said Rick Tomlinson, president of the Strawberry Commission, in a prepared statement.

The relationship between UC Davis and the strawberry industry dates to the 1930s, when strawberry varieties were first bred at the university’s labs. Since then, the research has branched out to satellite growing stations in Irvine and Watsonville, in the heart of the strawberry belt. Some of the biggest brand-name growers plant UC Davis-bred strawberries, including Dole and California Giant. The Albion, a variety developed in the Davis labs in 2004, is widely considered the standard-bearer in flavor for commercially grown strawberries.

The royalties have been as sweet as the fruit. Four of the 25 biggest income-producing inventions in the entire UC system are strawberry varieties bred in Davis. Strawberry income totaled $50 million in the past nine years, or more than $5 million a year.

In addition, the Strawberry Commission had been paying the university $350,000 a year in research funding since 1980. Those research payments ended after 2012, when two veteran strawberry breeders, Douglas Shaw and Kirk Larson, announced they were leaving UC Davis to form a private plant-breeding company in Southern California.

The marriage deteriorated further when the commission sued the university in 2013. The charge: UC Davis was letting Shaw and Larson leave with a copy of the so-called “germplasm,” a genetic library consisting of 1,500 different strawberry plants. Public property was being turned into private property.

The university said the claims were false. The germplasm belonged to the school and would stay there, stored in greenhouses on campus. Besides, UC Davis said, it was committed to keeping the program going by hiring a replacement for Shaw and Larson.

Strawberry officials didn’t believe it. Carolyn O’Donnell, a spokeswoman for the Strawberry Commission, said UC Davis was laying off employees who cultivated strawberry plants.

“What we saw was them closing down the program,” she said.

Appelsmith, however, said the commission was mistaken. While some workers were indeed let go, they represented “seasonal layoffs which are a normal part of ... an agricultural research program,” the university lawyer said.

Placating the industry’s suspicions, UC Davis has hired a replacement for Shaw and Larson, who left a little more than a month ago. The new director of the program is Steven J. Knapp, a plant breeder at Monsanto Co.’s vegetable research and development program in Woodland. Knapp oversaw breeding of melons and squash at Monsanto, among other crops. Before that, he spent 24 years on the faculty of Oregon State University and the University of Georgia.

“We are thrilled to have Steve join us as we design a new strawberry-breeding program for the 21st century,” Helene Dillard, dean of UC Davis’ College of Agricultural and Environmental Sciences, said in a prepared statement.

The settlement agreement says UC Davis will keep operating the strawberry program for at least five years, or as long “as is consistent with UC Davis’ operations and its goals as a public research university.” If the university ever decides to stop releasing new strawberry varieties, it said it will offer to license the “germplasm” to breeders.

It’s still unknown whether the Strawberry Commission will resume its $350,000-a-year research payments, Appelsmith said.

O’Donnell said the commission plans to support UC Davis research with cash or in-kind contributions. “The total contribution could be more or less than the $350,000 per year,” she said.

As part of the settlement, the two sides agreed to form a Strawberry Advisory Committee to provide input to the university on the breeding program.

Call The Bee’s Dale Kasler, (916) 321-1066. Follow him on Twitter @dakasler.

A sweet arrangement

The strawberry industry’s royalty payments to the University of California totaled more than $50 million over nine years.

2004-05: $4.9 million

2005-06: $4.8 million

2006-07: $4 million

2007-08: $4.6 million

2008-09: $5.2 million

2009-10: $5.8 million

2010-11: $7 million

2011-12: $7 million

2012-13: $7.6 million

Source: UC Davis

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