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CapitalPress.com
August 10, 2018
Oregon farmers’ radish seed victory upheld
9th Circuit finds bank had
no security interest in crop
By MATEUSZ PERKOWSKI
Capital Press
A federal appeals court has upheld
a legal victory won by Oregon farmers
who prevailed against an out-of-state
bank’s lawsuit over their radish seed
crop.
The 9th U.S. Circuit Court of Ap-
peals has ruled that Northwest Bank of
Warren, Pa., could not seize 7.4 million
pounds of radish seed grown by the
farmers as collateral for a loan to a de-
funct seed broker.
More than 40 growers had produced
the seed but were unable to sell it when
Cover Crop Solutions, the seed broker,
shut down operations in 2015.
Then, Northwest Bank filed a com-
plaint against the farmers, arguing they
had to turn over the seed because it served
as collateral for a $7.2 million loan issued
to Cover Crop Solutions.
A federal judge dismissed that lawsuit
in 2016 but the ruling was challenged
before the 9th Circuit, which has now
agreed that Northwest Bank had no secu-
rity interest in the radish seed.
Although a licensing deal with the
radish cultivar’s breeder said the seed
was the property of Cover Crop Solu-
tions, that’s irrelevant in the dispute with
farmers because “the growers were not a
party to that agreement,” the 9th Circuit
said.
Cover Crop Solutions entered into
the licensing agreement before the radish
seeds were harvested and then never ac-
quired the finished crop, so the broker had
no ownership interest in it, the ruling said.
Even if the seed broker hadn’t
breached its contract with growers by
failing to pay them, its licensing agree-
ment for the cultivar assigned contract
rights to the breeder, the 9th Circuit said.
Capital Press was unable to reach at-
torneys representing the farmers or the
bank.
Now that the appeal has ended, it’s
likely the farmers will resume their own
lawsuit against the bank seeking more
than $6.7 million for lost crop value and
added storage costs.
Last year, a federal judge stayed that
litigation until the 9th Circuit had reached
a decision in the earlier case.
Courtesy U.S. Fish and Wildlife Service
Federal agencies say they will “take appropriate additional time
to consider and evaluate further stakeholder input” regarding
reintroduction of grizzly bears in the North Cascades.
More review for North
‘Potential buyer’ found for defunct Oregon beef packer
Cascade grizzly plan
Bartels Packing
shut down earlier
this year
By DAN WHEAT
Capital Press
By MATEUSZ PERKOWSKI
Capital Press
An Oregon beef packing
company that shut down ear-
lier this year has attracted a
“potential buyer” to purchase
its facilities and equipment
“as a package.”
When Bartels Packing
of Eugene, Ore., closed in
March, the company owed
about $4.6 million to cattle
suppliers and feedlots and
left the local livestock market
without a significant buyer.
The court-appointed re-
ceiver who took over the
company’s finances, Richard
Hooper of Pivotal Solutions,
has since met with four inter-
ested parties who toured the
slaughterhouse and process-
ing plant.
Hooper has also been in
contact with liquidators, but
owner Chris Bartels preferred
to sell the equipment “as part
of a functioning meat harvest
and packing facility” to fetch
the highest value, according
to court documents.
One of those potential
buyers has now submitted a
“letter of intent” to purchase
the packer’s assets as well the
Mateusz Perkowski/Capital Press File
Chris and Kandi Bartels, who own defunct beef processor Bartels Packing, have been contacted by a
potential buyer for the facility.
underlying property, which is
owned by an affiliated firm.
“Hopefully, we will be
able to convert that inter-
est into a purchase-and-sale
agreement,” Hooper said.
Possible sale terms and
the potential buyer’s identi-
ty weren’t disclosed but the
chance of a new beef packer
operating the facilities is wel-
come news for Oregon’s cat-
tle industry.
“We definitely need an-
other packer in the game,”
said Tom Elder, manager of
the Woodburn Livestock Ex-
change, one of the auction
yards where Bartels bid for
cattle.
Though he’d like to see
cattle prices go higher, the
market has remained “steady”
since the company shut down,
Elder said. “It didn’t fall
apart.”
Bartels was an important
buyer of organic and grass fed
cattle, so finding a replace-
ment could boost prices in
those niche markets by 10 to
20 percent, said Jerome Rosa,
executive director of the Ore-
gon Cattlemen’s Association.
“Competition should re-
ally help to drive that market
up,” Rosa said, particularly
since cattle shipped to more
distant packers are “really
getting discounted.”
Hopefully, a sale would
allow cattle suppliers to be
repaid and the facilities to re-
start soon, he said. “They’d
really modernized it and spent
quite a bit of money on the fa-
cility.”
Upon filing for receiver-
ship, owner Chris Bartels ex-
pected the company’s roughly
$14 million in assets would
cover its $8.3 million in debt,
which includes the amount
owed for cattle.
Judge overrules Washington Ecology on water-right change
By DON JENKINS
Capital Press
A new wine grape vineyard
in southeast Washington can ir-
rigate 89 acres with Columbia
River water, a judge has ruled,
overturning a decision by the
state Department of Ecology.
Benton County Superior
Court Judge Bruce Spanner
signed an order Aug. 2 allowing
Columbia East LLC to transfer
a portion of its water rights to
Loyal Pig LLC for grapes.
“This is very high-end pro-
duction agriculture,” said Dar-
ryll Olsen, board representative
of the Columbia-Snake River
Irrigators Association, which
joined Loyal Pig in the suit
against Ecology. “It doesn’t get
any better than this.”
At issue is whether the ap-
plicants provided Ecology with
recent enough information for
the agency to approve the wa-
ter-right transfer.
Ecology rejected the ap-
th
70
Columbia-Snake River Irrigators Association
A vineyard takes shape along the Columbia River in southeast
Washington. A judge ruled Aug. 2 that a planned vineyard to the
west of this site should be allowed to irrigate 89 acres, overturning
a decision by the state Department of Ecology.
plication in 2017 because the
amount of water Columbia East
used to irrigate about 300 acres
of potatoes, corn, wheat and al-
falfa wasn’t figured for the pre-
vious three years.
Without that information,
the agency said it couldn’t de-
termine whether granting Loyal
Pig 89 acre-feet of water would
increase withdrawals from the
river.
Loyal Pig and the irrigators
association have focused on
another aspect of water law —
“use it or lose it.”
Water-right holders risk re-
linquishing a portion of their
Anniversary
OPEN HOUSE
rights if they don’t use some of
their water for five years. Loy-
al Pig argues Ecology should
use a 2014 study of Columbia
East’s water use because it’s
less than five years old.
Olsen said Columbia East
has been irrigating less over the
years as the surrounding area
develops. Basing its water right
on the years since 2014 would
amount to relinquishment in
fewer than five years, Olsen
said.
“All (Ecology) is doing is
whittling back water rights. It’s
a forced relinquishment,” he
said,
Ecology is reviewing Span-
ner’s decision and has not de-
cided whether to take the ruling
to the Court of Appeals, agency
spokeswoman Brook Beeler
said Tuesday.
Ecology rejected the wa-
ter-right transfer because cur-
rent water use wasn’t correctly
calculated, she said. “It’s not
playing favorites and putting
fish over grapes.”
Olsen said the irrigators as-
sociation also claims Ecology
engaged in illegal rule making
in denying Loyal Pig’s appli-
cation. Spanner has yet to rule
on that.
The U.S. Department of
Interior has announced that
the National Park Service and
U.S. Fish and Wildlife Ser-
vice will take more time to
evaluate “further stakeholder
input” regarding reintroduc-
tion of grizzly bears into the
North Cascades of Washing-
ton.
It is unknown what that
does to the agencies’ timeline
of choosing a course of action
by the end of September and
finalizing the decision before
year’s end.
Rep. Dan Newhouse,
R-Wash., who has opposed
reintroduction of grizzlies,
issued a statement Aug. 3 say-
ing he is pleased with a deci-
sion by Interior to have NPS
and USFWS take more time
“to seek further stakeholder
input in response to concerns
I have raised on behalf of my
constituents.”
“The communities most
affected by plans are stake-
holders whose voices must
be taken into account and I
appreciate the willingness of
the involved federal agencies
to listen,” Newhouse said.
On April 12, Newhouse
sent Interior Secretary Ryan
Zinke a letter warning of
“grave impacts” to northcen-
tral Washington residents if
grizzlies are brought in and
imploring Zinke to “stop ig-
noring the local community.”
He said his constituents
were disrespectfully treated in
the previous process and felt
their concerns were not taken
seriously.
At a public forum in Okan-
ogan County in March of
2015, “many residents were
not allowed to express their
concerns and were treated in
an unacceptable manner by
the federal employees con-
ducting the session,” New-
house wrote.
Zinke’s March 23, 2018,
announcement of support of
grizzly bear recovery in the
North Cascades “flies in the
face” of his stated goals of
“restoring trust and being a
good neighbor,” Newhouse
said.
The new Department of
Interior guidance states the
NPS and USFWS “are con-
tinuing analysis” of resto-
ration plans.
“In response to requests
from stakeholders, including
specific inquiries from Con-
gressman Dan Newhouse,
the two bureaus are taking
appropriate additional time to
consider and evaluate further
stakeholder input to inform
the planning and decision
making process. Public input,
reliance on the best available
science, and coordination
with affected communities,
agencies and organizations
will be critical before any de-
cision is made,” the guidance
states.
Ann Froschauer, spokes-
woman for the Washington
office of USFWS, said she
has no information on wheth-
er there will be a new public
comment period, how long
that may last and whether the
agencies will still plan to fi-
nalize a decision before year’s
end.
Heather Swift, Interior De-
partment press secretary, and
Newhouse’s office also were
unable to answer those ques-
tions.
A Newhouse amendment
to an appropriation bill de-
funding Interior Department
transportation of grizzly
bears into the North Cascades
passed the House on July 19.
Jim DeTro, an Okanogan
County commissioner, has
said that while some coun-
ty residents support grizzly
reintroduction, the vast ma-
jority of residents including
ranchers, back country outfit-
ters and recreationists do not.
They fear for their safety and
safety of their cattle.
Ranchers were shocked,
baffled and angered by Zin-
ke’s position feeling betrayed
by the Trump administration
which they believed was on
their side.
The Okanogan County
Farm Bureau, the Washington
Farm Bureau, several coun-
ties, the Washington and Ore-
gon cattlemen’s associations,
the Public Lands Council,
National Cattlemen’s Beef
Association and other groups
oppose reintroduction.
Sarah Ryan, executive
director of Washington Cat-
tlemen’s Association, said
the association is pleased
Interior realized the impor-
tance of getting comment
from local stakeholders who
haven’t been adequately con-
sulted.
Joe Scott, international
programs director of Conser-
vation Northwest, said North
Cascades grizzly recovery
“has languished for 30 years
and now is not the time for
further delay.”
Since 2014, NPS and
USFWS have led “a fair and
inclusive process planning
for grizzly bear restoration”
including numerous hear-
ings, resulting in more than
126,000 public comments, the
vast majority of which sup-
port restoration, Scott said.
Newhouse has “unfairly
criticized” the process and
“ignores public opinion, he
said.
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