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Sriracha-Based Lessons For Manufacturers

Mon, 12/23/2013 - 12:43pm
Mitch Carrel, Partner, Real Estate Practice Group and Food Industry Team, Freeborn & Peters

Interview with Mitch Carrel, Partner, Real Estate Practice Group and Food Industry Team, Freeborn & Peters

The battle between Sriracha-maker Huy Fong Foods and the city of Irwindale, Calif., has fired up in recent weeks, highlighting the importance of food companies maintaining a positive relationship with their surrounding community. Mitch Carrel spoke with Food Manufacturing about the case, what considerations food manufacturers should make when choosing a new plant site and how a facility’s location plays an important role in its ability to do business.

What are your thoughts on the Los Angeles County Superior Court's decision to deny the city of Irwindale's request for a temporary restraining order? Will this set a precedent for other similar cases?

Carrel: The moving party for a temporary restraining order (TRO) generally must show a likelihood of prevailing on the cause of action and irreparable harm without an adequate remedy at law.  The court in the case of Huy Fong Foods determined that the city’s request for a TRO on 24-hour notice was “too radical.” In lieu of ruling, a hearing was scheduled within a very short time frame.

After subsequently hearing the evidence, the court found that the city was likely to prevail on the public nuisance claim and that irreparable harm may occur. The court also found that the Mitigated Negative Declaration connected with the initial Facility Permit requires the company to reduce the potential for odors if strong odors are verified off-site. Because of these facts and findings, the company was ordered to immediately make changes in its site operations to reduce odors and the potential for odors–consistent with its initial permit. However, the court declined to enjoin the “operating or using of the property generally,” as requested by the city in its complaint.

While this ruling may provide a road map for those similarly situated for what may constitute reasonable efforts and measures necessary to avert a finding of a public nuisance, TROs are fact-specific and each case is evaluated on its own merits.

 

In your opinion, how well is Huy Fong Foods handling this situation, and why? How might this company improve its community relations?

Carrel: Based on news reports and the facts alleged in the city’s complaint, there may be opportunities to improve communications between the parties. The reports suggest that the parties were originally cooperative, but that efforts slowed or halted possibly in response to the city’s suggestion of the installation of an expensive filtration system.

Often, poor communications lead to unnecessary and costly litigation. Instead of allowing communications to falter, maintaining open and timely communications between the local government and company decision-makers is essential. Such efforts not only apprise all parties of the efforts being taken, but also build trust — which is essential to a long-term, collaborative and mutually beneficial relationship.

An action plan should also be developed and implemented. This allows the company to understand the available solutions. Once the options are determined, they should be explored and a final solution diligently pursued. Taking appropriate and timely action also leads to improved community relations.

 

Keep reading for Mitch's thoughts on how new plants can prevent the same problems by being aware of community standards before they begin to build.

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