March 3, 2017
CapitalPress.com
5
Potato cooperative sues attorneys after antitrust settlements
By JOHN O’CONNELL
Capital Press
TWIN FALLS, Idaho —
A cooperative that sought to
influence U.S. potato acreage
and some of its member com-
panies are suing their former
attorneys, alleging that bad
legal advice exposed them to
costly antitrust lawsuits.
Salt Lake City-based Unit-
ed Potato Growers of America,
established in 2004, once pro-
moted caps on spud acreage to
restore market stability follow-
ing years of overproduction.
The strategy was suggest-
ed by attorneys specializing in
antitrust law with Utah-based
Jones, Waldo, Holbrook &
McDonough, according to sep-
arate complaints filed during
January in Twin Falls Coun-
ty court on behalf of potato
companies and UPGA. The
lawyer-defendants allegedly
assured the potato officials
supply-management strategies
were protected under the fed-
eral Capper-Volstead Act.
But in 2010, the coopera-
tive and several members were
targeted by a class-action law-
suit alleging they illegally act-
ed as a cartel to constrain pro-
duction and artificially raise
prices.
The following year, Chief
U.S. District Judge Lynn
Winmill issued an opinion in
response to a motion in the
case that “acreage reductions,
production restrictions or col-
lusive crop planning” weren’t
shielded under Capper-Vol-
stead.
In June 2015, UPGA and
the potato companies agreed
to a $25 million settlement.
However, one of the major
plaintiffs, Associated Whole-
sale Grocers Inc. of Kansas
City, Kan., opted out of the
settlement to pursue its own
case. The potato companies
and cooperative settled with
Associated last November.
Terms were not disclosed.
“If you have a greater sup-
ply than demand, people go
out of business, or they find
ways to get prices up,” said
Steve Six, an attorney with As-
sociated. “That’s a basic prin-
ciple, and people don’t want to
go out of business.”
UPGA and the members
are now seeking more than $30
million in damages from their
former law firm, according to
attorneys involved in the case.
U.S. District Judge Rich-
ard Bevan is expected to rule
soon on motions in the recent
suit, including a motion for
dismissal by UPGA’s former
law firm.
According to one of the
complaints, filed by two grow-
ers involved in the settlement,
before the class-action suit
was filed, the Department of
Justice notified former UPGA
attorney Jones Waldo that the
cooperative’s tactics were
legally questionable. Waldo
allegedly failed to notify his
clients about the risks. Waldo
declined to comment.
Peter Carstensen, an emer-
itus law professor specializing
in agricultural antitrust law
at the University of Wiscon-
sin, said Winmill’s opinion
in the potato case has driven
settlements in similar cases
involving other commodi-
ties, including dairy and eggs.
Carstensen said there was no
case law suggesting supply
management is covered by
Capper-Volstead when UPGA
formed, but there were some
“yellow flags” regarding the
risk. Carstensen suspects co-
operatives that have tried the
strategy reasoned that “if we
all say this is the interpretation,
maybe the courts will agree
with us.”
“The statutory language
is quite clear there is no ex-
pressed authorization to
do supply management,”
Carstensen said.
Before forming UPGA,
the potato companies could
have asked the Department
of Justice for a legal opinion
on their proposed structure,
noting the opinion would
have provided strong pro-
tection in court, Carstensen
said. They could have also
filed for a formal order
placing restrictions on the
volume of potatoes growers
could bring to market, he
said. Such an order would
require approval by the Sec-
retary of Agriculture and be
subject to public oversight.
Jed Ellithorpe, a Center,
Colo., grower and current
UPGA chairman, said the or-
ganization continues to pro-
vide valuable data to the in-
dustry — including a variety
trends assessment and an an-
nual estimate of planted po-
tato acres based on physical
inspections of farm fields. He
said UPGA is also working
closely with Potatoes USA to
help growers become more
sustainable in their opera-
tions. UPGA also has a new
president and CEO, Mark
Klompien.
“I am excited to begin to
work on some strategic plan-
ning without these legal dis-
tractions,” Ellithorpe said. “It’s
going to allow us to go for-
ward.”
Bull trout lawsuit dismissed as moot
Complaint
pertained to 26
Northwest dams
By MATEUSZ PERKOWSKI
Capital Press
Lee Wicker
Dan Fazio
Pessimism on
immigration reform
Capital Press
YAKIMA, Wash. —
Chances of immigration re-
form passing Congress are not
good, two farm labor leaders
say.
Majority Republicans are
divided in the House and Sen-
ate Democrats, while in the
minority, can prevent nearly
any bill from coming to a vote
under Senate rules, said Lee
Wicker, deputy director of
the North Carolina Growers
Association, and Dan Fazio,
director of WAFLA, formerly
the Washington Farm Labor
Association.
They spoke at WAFLA’s
annual labor conference at the
Yakima Convention Center on
Feb. 23.
Fazio and Wicker said they
were recently in Washington,
D.C., talking with Trump
administration officials. Fif-
ty-eight immigration bills
were introduced in the first
two weeks and none are going
anywhere, Wicker said.
“Democrats will run the
same game on Trump that
Republicans ran on Obama.
Slow everything down. Gum
everything up. You have to
have 60 votes to bring any-
thing to a vote in the Senate
and I don’t think it will hap-
pen,” Wicker said.
“I would predict that if Re-
publicans dusted off the 2013
Senate bill and passed it now
that Democrats (who support-
ed it then) would vote against
it because they wouldn’t want
Republicans and Trump to get
credit for passing something
that would be helpful,” he
said.
Fazio said House Repub-
licans are divided between
moderate conservatives and
Tea Party conservatives and
that the only way to bring
them together is to pass
House Judiciary Chairman
Bob Goodlatte’s bills of the
last Congress. HR 1772 for
E-verify (electronic verifica-
tion of employment eligibili-
ty) is supported by Tea Party
Republicans, and moderate
conservatives liked HR 1773,
an agricultural guestworker
bill that WAFLA supported.
“You need both bills to
bring Republicans together,”
Fazio said.
Chances of getting a bill
out of the House are “very
small” and it’s harder to get
a bill through the Senate, he
said.
“There is no one out here
to help you out of this tremen-
dous labor shortage but your-
selves. The closer you get to
D.C., the more they drink the
Kool-Aid and think some-
thing will get done,” Fazio
said.
But while Fazio believes
nothing will happen leg-
islatively to grant illegal
immigrants worker status
or improve the H-2A-visa
guestworker program, he
said E-verify will happen and
will “devastate many people
(growers) in this room.”
The best hope for any-
thing helping growers is
Trump administration reform
of H-2A, he said. The Bush
administration
improved
H-2A right before President
George W. Bush left office
and the Obama administration
quickly reversed the reforms,
he said. The Bush reforms,
among other things, allowed
small farms to get certifica-
tion for H-2A workers, Fazio
has said.
Trump could improve the
program by lessening regu-
lations, allowing it to work
more smoothly, lowering the
wage threshold and allowing
growers to charge a reason-
able rate for housing they
have to provide, he said.
USFWS File
A federal judge has dismissed a lawsuit filed against the three federal dam operators on the Colum-
bia and Snake rivers. He ruled the agencies were already consulting with the U.S. Fish and Wildlife
Service on bull trout, as is required by law.
were designated as “critical
habitat” for the species in
2010.
The Roza and Kennewick
irrigation districts in Wash-
ington voluntarily intervened
as defendants in the lawsuit,
fearing the federal govern-
ment would be forced to stop
operating dams they rely on
for water until the consulta-
tion was complete.
U.S. District Judge Mar-
co Hernandez has dismissed
the case because the federal
defendants have re-initiated
consultation over the dams’
impacts and “provided plain-
tiff with the precise relief that
it has sought.”
The Alliance for the Wild
Rockies argued the case
should be kept alive until the
consultation was finished or
the federal government was
ordered to issue a “biological
opinion” about the potential
jeopardy posed by the dams.
However, Hernandez re-
jected the argument because
the environmental group had
accused the government of
improperly following proce-
dure but not of committing a
“substantive violation” of the
Endangered Species Act.
ROP-9-3-1/#4x
By DAN WHEAT
A federal judge has dis-
missed as moot an Endan-
gered Species Act lawsuit
over 26 Northwest dams and
their potential impacts on the
threatened bull trout.
The Alliance for the Wild
Rockies nonprofit filed a
complaint against three feder-
al agencies — the U.S. Army
Corps of Engineers, Bureau of
Reclamation and Bonneville
Power Administration — that
operate the dams in Oregon,
Washington, Idaho and Mon-
tana.
The lawsuit alleged the
federal agencies unlawfully
failed to “consult” with the
U.S. Fish and Wildlife Ser-
vice about whether the dams
adversely affect the bull
trout’s habitat.
The environmental plain-
tiff claimed the federal gov-
ernment was required to
re-initiate this consultation
after more than 488,000 acres
9-1/#4N