Over the objections of farmers, a federal judge has stayed a lawsuit that accuses a bank of unlawfully interfering with the sale of radish seed.
Earlier this year, the Radish Seed Growers’ Association — which represents nearly 40 Oregon farms — filed a complaint seeking $6.7 million in lost crop value and added storage costs from Northwest Bank of Warren, Pa.
Northwest Bank had claimed about 7.4 million pounds of radish seed as collateral for a loan taken out by Cover Crop Solutions, a financially defunct seed broker.
However, the company’s attempt to take ownership of seed in the farmers’ possession was rejected by a federal judge in 2016. That ruling is now being challenged before the 9th U.S. Circuit Court of Appeals.
The growers allege that Northwest Bank filed meritless liens, pursued a meritless lawsuit and discouraged potential buyers from buying the seed they’d grown for Cover Crop Solutions.
However, the bank counters that these actions were permissible under the “absolute litigation privilege” of its complaint, even if the legal action has so far proven fruitless.
During a court hearing in September, the company asked a federal judge to dismiss the farmers’ lawsuit.
“It’s clear the bank had a good faith basis to assert a security interest in the seed,” said Peter Hawkes, the bank’s attorney. “They had a right to go to court and have that adjudicated.”
Paul Conable, attorney for the growers, argued that Northwest Bank wasn’t protected by the absolute litigation privilege because the meritless liens and interference with customers occurred before the lawsuit.
“You don’t immunize yourself from the effects of your actions by later filing a lawsuit,” he said.
However, U.S. District Judge Ann Aiken will postpone any decision on these matters until Northwest Bank’s original lawsuit is resolved in the 9th Circuit, based on legal precedents.
“In addition to being consistent with the weight of authority, waiting for the resolution of the pending appeal has obvious benefits: it minimizes the risk of conflicting judicial decisions, conserves judicial resources, and will aid the court in reaching the correct result in this case,” Aiken said.
The farmers had opposed the stay, arguing they’d suffered million of dollars in losses by having to wait years to sell the radish seed due to Northwest Bank’s unlawful actions.
“This lawsuit is their only means to recoup those losses,” Conable said in a court brief. “Forcing them to wait another significant period of time for this litigation to proceed would be unfairly prejudicial.”