Chiquita Brands International may have suffered major losses on Wall Street in recent days, but the downtown-based produce giant scored a victory in a federal suit over a pricing dispute that saved the company at least $8 million and possibly more. A pair of Honduras-based melon farms had sued Chiquita in U.S. District Court for what they claimed was unfair pricing on their product at the end of the growing season.
But on Feb. 13, an eight-person jury found in favor of defendant Chiquita on all 11 claims. "Even though the plaintiffs threw a 'kitchen sink' of specious claims at Chiquita - like fraudulent inducement and violations of the Perishable Agricultural Commodities Act - the jury quickly saw them for what they were: desperate attempts to extort more money from the company," said Michael Cioffi, chief trial lawyer for law firm Blank Rome LLP, which represented Chiquita in the case argued in Cincinnati.
Chiquita's stock has been battered since late last week, when it reported a fourth-quarter loss of nearly $412 million. Chiquita shares closed at $5.60 Monday, down $1.67 or 23 percent.
The suit hinged on a marketing agreement between Chiquita and the two farms signed in 2001. Chiquita sold the remnants of that growing season for less than the original market price as stipulated in that contract, company officials said.
The farms said the fruit was worth full price, and sued in October 2002 for at least $8 million in compensatory damages, legal fees and interest, as well as unspecified punitive damages and a refund of Chiquita's profits from the sales. The total value of the melons for that season was $33 million, and Chiquita resold the fruit in U.S. markets on behalf of the farms for a 7 percent commission.
The case finally went to trial this month.
Source: news.cincinnati.com
Publication date: 2/25/2009
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