Judge sets ruling date on seed suit motion

Judge David Frazier Tuesday promised attorneys to give an oral opinion next Wednesday after an hour-plus hearing Tuesday on whether or not Scotts Seed can seek damages on a cross claim in the giant civil suit involving Kentucky Bluegrass production in the Tekoa and Pomeroy areas

Pullman Attorney Tim Esser, representing Seeds, Inc., of Tekoa, and Matthew Turetsky of Seattle, representing the Scott Company, presented their arguments.

The judge noted Tuesday’s hearing was similar to a session in November when the topic was first argued in court.

Seeds, Inc., and Scotts are co-defendants in a suit which has been filed by Kentucky Bluegrass producers.

Turetsky in a 67-page motion Dec. 23 detailed Scotts contentions of stuffing, an allegation that grass seed purchased on the open market by Seeds in 2006 and 2007 was sold to the company as seed produced under advance contracts which had committed the company to pay higher prices.

The allegations filed last week contends Scotts sustained damages of more than $4.6 million by paying higher prices for the unauthorized open market seed sold to it under contract prices. An alternate damage tabulation of more than $2.25 million was alleged based on Scotts’ alleged damages when the seed sold at an alleged loss.

Esser Friday filed a response which contends the Scotts attorneys filed pages and pages of factual assertions knowing they are in dispute. He cited what he said was undisputed evidence which refutes Scotts argument that it sold seed it hadn’t requested. Scotts knowingly paid for the seed at open market prices because it was betting the market for Kentucky Bluegrass seed would rebound, Esser contended. He submitted copies of an e-mail and an invoice which he said backed his argument.

Tuesday’s court hearing was attended by some of the area growers and others.

Esser again stated Scotts executives in the seed operation sought to purchase open market seed at lower prices outside of the contracts because they were betting the Kentucky Bluegrass market would go up. He argued Scotts was seeking damages because in some instances they had purchased seed at $1.20 a pound and were seeking a way out because the market dropped to 73 cents a pound.

Esser argued inclusion of 2007 seed purchases on 2008 billings had been approved by Scotts and were obvious because the volumes included the 2008 projected production from the seed contracts with another volume of more than three million pounds from purchases on the open market on Scotts behalf in the previous year.

“Where else could it have come from?” Esser asked.

He also argued under applicable seed association rules, Scotts executives would have been obligated to file any objections to the billings within 45 days because they were dealing with a product which was subject to rapid price changes.

Esser also argued Scotts executives were offered an opportunity to inventory their lot holdings at Seeds, Inc., to check on the seed stocked for them under what he said was the approved arrangement for open market purchases.

Scotts, a year ago, was ordered by Judge Frazier to make more than $7 million in overdue payments called for under the contracts in a partial summary judgment awarded to Seeds, Inc. The judge then ruled the contracts, made under supply agreements which were made after negotiations to purchase Seeds by Scotts collapsed in the spring of 2007, clearly obligated Scotts to pay for harvested seed on three-payment deadlines beginning Sept. 10.

CORRECTION: The growers’ civil suit against Scotts, Seeds Inc., and Dye Seed ranch at Pomeroy has been scheduled over a month in June. Last week’s report incorrectly said it was slated for a week.