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September 14, 2016

Leaving a Tart Taste in One Processor’s Mouth: Court Dismisses Claims of a Plaintiff Subject to the Tart Cherry Order

Agricultural law can often be complicated, but it is not always this "tart." Burnette Foods, a tart cherry processor in Michigan, has found itself in an ironic position: it is subject to a law that was enacted with significant industry support and designed to treat all tart cherry processors and growers equitably, but Burnette believes that the law should not apply to them because of the detrimental effect on their company.

Burnette Foods, Inc. v. United States Department of Agriculture, Case No 1:16-cv-21, is a case that arises out of Burnette Foods' request to the USDA to be exempt from the USDA-created "Tart Cherry Order." The Tart Cherry Order was enacted with an overwhelming majority support of tart cherry growers and processors in order to stabilize marketing and prices for cherries due to the assessment that tart cherries are a fragile commodity with volatile production. Pursuant to the Tart Cherry Order, an administrative board, the Cherry Industry Administrative Board, sets the "optimum supply level" of tart cherries to be introduced into the market. If a handler of tart cherries has more inventory than the optimum level, the handler is required to withhold some of its product from the market.

As a result of the Tart Cherry Order, Burnette Foods has about $3 million worth of inventory that it cannot sell. Burnette Foods thus filed a complaint in the Western District of Michigan to challenge an administrative judge's finding that Burnette Foods must adhere to the Tart Cherry Order. Although Burnette Foods asserted various claims as to why the administrative judge was incorrect, Judge Quist's opinion finds that Burnette Foods' challenge only has one claim that can continue forward: whether the administrative judge had sufficient evidence to find that the composition of the Cherry Industry Administrative Board violates the Tart Cherry Order. Judge Quist granted the USDA's 12(b)(6) Motion to Dismiss all other claims.

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