Business / Economy

San Benito Foods to close Aug. 8 if it does not pay $2.5 million operations fee

Attorney argues the cannery’s closure would cause ‘irreparable harm to the community’ by eliminating 450 local jobs.
Thousands of cans wait to be filled with processed tomatoes the morning of Aug. 6. Photo by John Chadwell.
Thousands of cans wait to be filled with processed tomatoes the morning of Aug. 6. Photo by John Chadwell.
Superior Court Judge Omar Rodriguez said at the Aug. 5 hearing that the case between the city of Hollister and San Benito Foods was not about the community, but about harm done to the cannery. He did not think there was irreparable harm done. Photo by John Chadwell.
Superior Court Judge Omar Rodriguez said at the Aug. 5 hearing that the case between the city of Hollister and San Benito Foods was not about the community, but about harm done to the cannery. He did not think there was irreparable harm done. Photo by John Chadwell.

The San Benito Foods tomato cannery in Hollister has been ordered to shut down operations by Aug. 8 unless it pays $2.5 million owed to the city. The cannery is currently in the midst of its season.

San Benito County Superior Court Judge Omar Rodriguez was not swayed by the arguments on behalf of Neil Jones Food Company, owner of the tomato cannery, during an Aug. 5 hearing on the company’s lawsuit alleging the city of Hollister had violated the California Environmental Quality Act (CEQA), as well as the Brown Act, committed a breach of contract, and was asking for declarative and injunctive relief.

At the heart of the argument, said the city’s attorney David Prentice of Prentice Young, was San Benito Food’s inability to pay the $2.5 million fee to remove sludge that had built up over 70 years from the cannery’s operations.

San Benito Foods attorney David Weiland of Fresno-based Coleman & Horowitt LLP argued that the fee was illegal and that the burden might force the closure of the cannery, which would cause “irreparable harm to the community” by eliminating 450 local jobs. Weiland also pointed out that there was a verbal agreement between the city and cannery that San Benito Foods would pay $25,000 for the annual permit, which had been paid the previous three years.

Rodriguez said the issue was not the community, but that it was that irreparable harm would be done to the cannery itself by having to pay the fee.

“I’m not persuaded that there is that amount of irreparable harm,” he said. “We’re talking about money, for the most part, and the city demanding a large sum of money for the permit that the petitioner has to apply for year after year. The fact remains that the petitioner still submitted an application annually to receive that operating permit and now they are being asked by the city to pay $2 million for that permit.”

He also said the company had not sufficiently prepared to argue violations of the Brown Act and CEQA regulations. He said he had hoped to hear more arguments about the Mitigation Fee Act, which provides the requirements for development impact fees, and if it applied. He said there was no discussion in case law that would lead him to believe the “permit at issue is anything but a permit to operate,” and added, “I don’t believe that the petitioner has met its burden that the city is bound by the $25,000 permit.”

Rodriquez said a temporary restraining order signed June 22 by retired Superior Court Judge Thomas Breen that allowed the cannery to begin operations would expire immediately.

“I guess we’re going to find out if the plant gets shut down and 450 people lose their jobs,” Weiland responded. “It could happen as early as tomorrow.”

When the judge started to address the quantifiable harm, Weiland interrupted, “How are you going to quantify the harm to 450 employees?”

Rodriguez reminded him, “The employees are not part of the case.”

Weiland responded, “It’s the actions of the city that are at issue.”

“And the harm done to the petitioner,” Rodriguez said. “There’s an allegation that there’s monetary harm being done to the petitioner. The petitioner is saying they can’t pay this fee. In order to obtain a preliminary injunction irreparable harm has to be shown and part of what irreparable harm means something is difficult to be quantified numerically. Well, lost profits can be quantified numerically. Damages from the city can be quantified. As I said, there needs to be shown damages not to the community, but to the petitioner, and the burden was not met.”

Within an hour after Rodriguez’ finding, interim City Manager Brett Miller sent a letter to Sam Humphrey, plant manager at the tomato cannery, that on advice of the city’s counsel, the city would issue the 2020 operating permit. However, the city demanded that payment be made by “noon Friday, Aug. 7 in order to continue operating under the discharge permit.”

“Should you decide not to issue the payment, you are ordered to cease your non-permitted discharge into the city of Hollister’s collection system by noon Saturday, Aug. 8,” Miller wrote, followed by, “As you are aware the water board has been following this closely and we have been given unofficial notice that they are preparing a Notice of Violation for the water chemistry.”

Hollister Mayor Ignacio Velazquez spoke to BenitoLink by phone after the hearing.

“As I’ve said over and over again, it’s not that we don’t want to work with San Benito Foods, but we just need to make sure they’re not going to hurt our water table and are following the laws of the state of California,” he said. “We want to make sure we’re protecting our water.”

Humphrey, who was present at the hearing, declined BenitoLink’s request for comment, and Weiland did not respond to BenitoLink’s request for a comment about the company plans.

 

BenitoLink is a nonprofit news website that reports on San Benito County. Our team is working around the clock during this time when accurate information is essential. It is expensive to produce local news and community support is what keeps the news flowing. Please consider supporting BenitoLink, San Benito County’s news.

 

John Chadwell

John Chadwell is a BenitoLink reporter and an author. He has many years experience as a freelance photojournalist, copywriter, ghostwriter, scriptwriter and novelist. He is a former U.S. Navy Combat Photojournalist and is an award-winning writer who has worked for magazine, newspapers, radio and television. He has a BA in Journalism and Mass Communications from Chapman University and underwent graduate studies at USC Cinema School. John has worked as a script doctor and his own script, God's Club, was released as a motion picture in 2016. He has also written eight novels, ranging from science fiction to true crime that are sold on Amazon. To contact John Chadwell, send an email to: johnchadwell@benitolink.com.