Feb 16, 2011

Judge orders mediation for SweeTango dispute

The two parties in the SweeTango legal dispute have been ordered to mediate their differences.

On Feb. 4, Judge Lloyd Zimmerman of Minnesota’s Fourth Judicial District dismissed most of the claims filed against Pepin Heights Orchard and the University of Minnesota last June, when the farm and land-grant institution were sued by two dozen plaintiffs, most of them apple growers based in Minnesota. In his ruling, the judge also upheld a few of the plaintiffs’ claims and gave both sides 60 days to resolve them in mediation.

The plaintiffs sued over access to the SweeTango apple – a much-hyped variety recently released by the University of Minnesota’s breeding program. According to the lawsuit, the university granted Pepin Heights Orchard, Lake City, Minn., an “exclusive license to grow, have others grow on its behalf, and sell SweeTango.”

In turn, Pepin Heights made an agreement with growers in several other states and Canadian provinces that structured how the new variety would be grown and marketed. But that structure gave growers in SweeTango’s home state limited access to what might be an extremely lucrative apple – even though the apple was developed by a publicly funded institution that must, first and foremost, work for the benefit of Minnesota residents. In their lawsuit, the plaintiffs sought equal access to SweeTango and wanted to void the exclusive agreement between the university and Pepin Heights.

Judge Zimmerman, however, ruled that the agreement is legal – Minnesota’s antitrust and monopoly laws do not apply to its land-grant university.

In his ruling, he said the plaintiffs “raise genuine and impassioned questions about why a public university should be allowed to create a monopoly favoring one seller of apples over many other orchards, without a fair chance to compete.”

But he also sympathized with the defendants: “The university rejoins that it, too, is trying to survive in challenging economic times, when its own funding is imperiled, and that it has made a carefully considered and reasonable decision.”

If the remaining claims aren’t resolved in mediation, the lawsuit could still go to trial.

– Matt Milkovich