Assemi Brothers score wins against Wonderful Pistachio & Nuts. But lawsuit’s not over
The Assemi Brothers, one of the region’s leading nut growers, scored a legal victory last week in their lawsuit against the biggest player in the industry, Wonderful Pistachios & Almonds.
The Fresno County family, which supplied almonds and pistachios to Wonderful for years, sued the agricultural giant in September 2019, alleging breach of contract after the company refused to pay them in full for their 2018 pistachio crop. The amount owed could be in the millions of dollars.
The Assemis accuse the Wonderful company of retaliating against them, after the family decided to become competitors and launch their own brand of pistachios: Touchstone.
The lawsuit offers a rare peak into the high-stakes and ultra-competitive world of growing, selling and processing nuts. As the founders of the Wonderful brand of products that includes almonds, mandarins, pomegranates, pistachios and sweet grapefruit, Stewart and Lynda Resnick have become agricultural powerhouses.
And anyone who tries to compete with them, will be in for a fight, the lawsuit illustrates.
Attorneys for the Assemis were reached, but they declined comment.
Recent court decisions
Wonderful officials have denied the Assemis’ allegations while also challenging accusations contained in amended complaints filed by the Assemis.
Wonderful’s lawyers filed a motion to try and get Fresno County Superior Court Judge Kimberly Gaab to agree that the Assemis — Farid, Farshid and Darius — did not have proof that Wonderful “engaged in any unlawful, fraudulent or unfair conduct.” They also allege the Assemis’ legal team was wrong in their interpretation of the state rules for removing board members from an agricultural cooperative.
The Assemis’ lawsuit states Darius and Farshid Assemi were illegally kicked off the Wonderful Almond Cooperative board after they requested financial information about the company. They also allege the Wonderful company has waged a war to try and destroy them as business competitors.
In a strongly worded six-page ruling, the judge denied both requests from Wonderful. Gaab said it was clear the Wonderful company took steps to not only punish the Assemis, but also send a message to other growers.
“When plaintiffs tried to disrupt the pistachio market by breaking from Wonderful to process and market their own pistachios, Wonderful threatened them and took decisive steps to try to ‘crush’ them and prevent them from becoming a viable competitor. Resnick wanted to ‘destroy’ the Assemi family for trying to establish their own operation, as he did not want a more competitive market,” Gaab wrote in her ruling.
Wonderful denies allegations
A spokesperson for The Wonderful Company reached out to The Bee, saying the company strongly denies the allegations included in Gaab’s ruling and the lawsuit. “(Wonderful) looks forward to responding more fully in court,” the spokesperson said.
According to information in Gaab’s ruling., when the Assemis were looking for a home for their pistachios, Wonderful had its lawyers send letters to other pistachio processors threatening to sue them if they accepted their pistachios. One processor turned the Assemis down, but two others agreed to take their nuts.
Wonderful made good on its threats and sued the processors, but later withdrew the legal action, according to court documents. Wonderful also filed suit to accelerate repayment of a loan it had made to the Assemis, even though they were not in breach of the terms of the loan, Gaab wrote in her ruling.
After the Assemis launched their new brand, Touchstone, and succeeded in gaining accessto the lucrative Chinese market, Wonderful falsely told a set of powerful Chinese brokers that the Assemis treated their pistachios with hydrogen peroxide, an indication that the nuts were of lower quality, according to information in Gaab’s ruling.
“Plaintiffs’ allegations show that defendant was attempting to punish them and make them an example in order to deter other growers and processors from challenging Wonderful’s position as the dominant player in the pistachio processing industry. Preventing any new competitors from entering the processing industry would allow Wonderful to maintain its profits, as well as control over the industry as a whole,” Gaab said in her ruling.
The judge also found the removal of the two Assemi brothers from the Wonderful Almond Cooperative was improper. The Food and Agricultural Code requires several steps before removing a cooperative board member, including having a member bring charges for removal by filing them in writing with the secretary of the association, together with a petition signed by 5% of the members requesting their removal as directors.
“Plaintiffs were not informed in writing of the charges against them prior to the meeting, nor were they allowed to be heard at the meeting or to be present witnesses. These actions and omissions violated Food & Agricultural Code, section 54150,” according to the lawsuit.
The breach of contract lawsuit is scheduled for a case management hearing on March 4.
This story was originally published October 30, 2020 at 5:00 AM.
