Nut Grower Wins Ruling on Financing Industry Ads

The state’s largest pistachio grower has won the first round of a legal battle that could revive a debate over whether growers can be forced to pay for government-sponsored campaigns promoting agricultural products.

U.S. District Judge Margaret Morrow in Los Angeles on Monday granted Paramount Farms’ request for a preliminary injunction allowing it to opt out of paying most of a California Pistachio Commission assessment used to fund marketing and lobbying programs.

Paramount, owned by Stewart Resnick of Beverly Hills, still will have to pay the standard rate of 3.25 cents a pound on its pistachio production, but 75% of the money will go into an escrow account while a final determination in the case is made.

In a lawsuit filed against the state-authorized commission in October, Lost Hills-based Paramount claimed it was forced to help pay for ad campaigns and other programs that it opposed.

The farm company plans to take the money it would pay the commission and create “our own marketing programs that touch consumers directly. That’s much more effective than the generic programs the commission has done over the years,” said Chris Tuffli, Paramount’s spokesman.

Karen Reinecke, president of the Fresno-based commission, said it would meet Thursday to decide whether to appeal. In May, the U.S. Supreme Court ruled that farmers and ranchers could be forced to pay for these government-sponsored promotions. At the time, legal experts expected the ruling to sweep aside challenges to dozens of promotional programs, many run by the U.S. Department of Agriculture and others sponsored by states, including California.

Pistachios have become a $600-million industry in California. About 625 growers pay the assessment to the commission.