An out-of-court settlement of the lawsuit challenging the exclusive marketing arrangement for the SweeTango apple has been reached.
The lawsuit ended in victory for the University of Minnesota, which bred the apple, and Pepin Heights Orchard, which bought rights to the apple and organized Next Big Thing, a 64-grower cooperative, to grow and market it. The apple came to market in significant volume this fall.
A group of more than a dozen growers, mostly in Minnesota, sued the university and Pepin Heights last year, claiming they were denied significant access to an apple developed by their own land-grant university and which the university itself claims is superior to Honeycrisp, the market wonder that was also bred there.
Under terms of the mid-September settlement, which needed approval by Hennepin County District Judge Lloyd Zimmerman, the growers who filed the suit will pay $25,000 to Pepin Heights in partial payment of its legal fees. The lawsuit was dismissed “with prejudice,” meaning it may not be filed again.
The settlement did result in some benefits for the litigants. The number of trees that can be planted by Minnesota growers who are not members of Next Big Thing was increased from 50,000 to 150,000 in total, and from 1,000 to 3,000 by any individual grower. The increase takes place in three steps in the years from 2014 to 2017.
Orchards that are not members of Next Big Thing may not pool their crops to sell them to wholesalers, but remain, as before, limited to selling them at their own farm markets or at farmers’ markets and local stores.
Lisa Lamm Bachman, the Minneapolis attorney representing the growers who sued, said the purpose all along was to lift the restrictions on wholesale marketing of SweeTango by growers in Minnesota. “That was not in the cards, so my clients made the decision to obtain greater access and in that they did succeed. It was an accomplishment under the circumstances.
“Circumstances,” she said, include “the current state of the law.” She still maintains that it is not right for a government entity—the publicly supported University of Minnesota—to enter the market, create a monopoly, and claim immunity from antitrust law. An appeal to a higher court was not something her clients could afford, in either time or money, she said.
While it was not set forth in the settlement, Bachman said she believes the University of Minnesota is in the process of reviewing its release policies for future varieties—not only of apples but of any kind of plant.
Dennis Courtier, owner of Pepin Heights Orchard in Lake City, Minnesota, said his group was willing to allow more Minnesota growers to share SweeTango, as long as they abided by the rules. While 85 growers in Minnesota have so far elected to plant some SweeTango trees, few have planted their full allotment and only two besides Pepin Heights opted to join Next Big Thing, which also includes growers in Wisconsin, Michigan, New York, and Washington states, and the Canadian province of Nova Scotia.
Courtier said in a statement that Pepin Heights and the University of Minnesota always maintained the lawsuit was groundless. “Pepin Heights won the license to bring this new and exciting variety to the market in a fair head-to-head competition with one of the plaintiffs. After the license was granted to Pepin Heights, the plaintiffs behind this case tried to use the courts to accomplish what they couldn’t in the open marketplace.”
Tim Byrne, sales manager for Pepin Heights and president of Next Big Thing, told Good Fruit Grower the judge did not order the settlement. Earlier, he had thrown out parts of the suit and ordered mediation, which ended without a settlement. In July, the growers approached Pepin Heights looking to settle the case.
“We’d talked earlier with members of the Minnesota Apple Growers Association about making more trees available to Minnesota growers, that 1,000 trees may not be enough for any one grower,” Byrne said. “This seemed an appropriate time to do that.”