Jalapeño grower secures $23.3 Millions in fiery disagreement with Sriracha producer

Jalapeño grower secures $23.3 Millions in fiery disagreement with Sriracha producer

After the dissolution of an almost three-decade collaboration with the producer of the globally renowned Sriracha sauce and a lawsuit worth millions of dollars against the said company, Craig Underwood continues to have faith in the peppers from his farm.

Underwood Ranches was recently granted $23.3 million by a jury following a contentious legal battle with Huy Fong Foods Inc., the creator of the extremely well-liked Sriracha housed in its characteristic green-topped bottle. The family-run Underwood farm had previously been the sole provider of the chile peppers essential to Huy Fong’s rooster-branded sauces.

The court proceedings, initiated in early June, concluded last week when a civil jury concluded that Huy Fong, located in Irwindale, violated its agreement with the chile farmer and engaged in fraud by deliberately misstating and withholding information.

“It’s definitely not in our character to surrender. We believed we had been treated unjustly, so we hoped to rectify that through legal means,” expressed Underwood, the manager of the farm located in Camarillo. “There was abundant rejoicing when the verdict was announced. We celebrated at lunchtime. We rejoiced during dinner. And the celebrations continued into the following day.”

Underwood conveyed that it was a moment filled with emotion since the termination of the association with Huy Fong had severely impacted the financial situation of the grower.

By January 2017, the relationship had deteriorated to such an extent that the entities ceased collaborations.

In the following month, Huy Fong Foods initiated a legal battle in Los Angeles County Superior Court, which subsequently was relocated to Ventura County, the location of Underwood’s enterprise. The grower responded with a counterclaim in February 2018, asserting that Huy Fong was responsible for the rupture in the alliance, leading to over $20 million in losses for Underwood Ranches.

In delivering a verdict for Underwood Ranches, the jury allocated $14.8 million for the financial setbacks experienced in 2017 and 2018. The $1.5 million excess payment claimed by Huy Fong was subtracted and conceded to the Sriracha creator. Additionally, Underwood was granted $10 million in punitive damages.

Michael Martin, an attorney for Huy Fong, communicated that the producer’s legal counsel intends to contest the resolution.

“We obviously contest the judgment. We intend to dispute it through post-trial motions and then, if necessary, through an appeal,” stated Martin. “Regarding the verdict’s financial implications on the client, the company plans to maintain its regular business operations.”

Underwood mentioned that, with the litigation concluded, his crew is eager to restore normalcy to the farm.

“The repercussions of the separation have been strenuous. Suddenly, we were left with 1,700 acres and no crops to cultivate,” Underwood recounted, noting that the farmer had to dismiss 45 individuals. “We’ve received considerable support from our suppliers, our financial backer, and our employees. Without this, we couldn’t have persevered.”

Moving forward, Underwood Ranches continues to strategize around its peppers being the farm’s lifeline.

“When our collaboration with Huy Fong disintegrated, we were uncertain about our next steps on the farm. However, growing peppers is our specialty,” stated Underwood. “So, eventually, we pondered, ‘Why not develop our unique range of sauces?’”

These sauces—encompassing Underwood’s rendition of Sriracha—began appearing for sale around a month ago at farmers markets in Ventura County, as the farm transitions its emphasis from production to distribution.

David Tran, the founder of the Sriracha producing company who escaped from Vietnam, asserted that Underwood’s new sauce range is a ploy to drive his company to closure.

“Regrettably, trial restrictions hindered Huy Fong from adequately informing the jury of these facts,” Tran expressed in a statement.

In the interim, Huy Fong Foods has shifted to procuring its chiles from different cultivators in California, New Mexico, and Mexico, as conveyed by Donna Lam, a company executive.

Conversely, at Underwood Ranches, areas once dedicated to growing peppers for Huy Fong Foods are now teeming with onions, cilantro, basil, and various other crops.

Underwood, whose lineage has been engaging in agriculture in Ventura County since 1867, affirmed that these peppers would eternally represent his proudest produce. They symbolize his staunchest battles and are what he aspires will spearhead the farm’s progress.

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