Oregon farm wins radish seed dispute
A favorable ruling won by an Oregon farm in a legal dispute over radish seed may have positive consequences for other operations involved in the lawsuit.
Several farms in Oregon are fighting a legal complaint filed by Northwest Bank of Warren, Pa., that claims it has a security interest in radish seed they grew in 2014.
The bank claims the radish seed serves as collateral for a $7 million loan taken out by Cover Crop Solutions, a seed company that contracted with Oregon growers to produce a proprietary variety.
Radish seed is used as a cover crop in the Midwest, but weather in 2014 reduced demand among farmers in that region and resulted in an oversupply.
Northwest Bank’s lawsuit contends that its security interest in the radish seed has priority over that of the growers, but a federal judge in Portland has disagreed with that argument in regard to at least one farm.
U.S. Chief District Judge Michael Mosman has found that Hawman Farms of Hermiston, Ore., agreed to grow roughly $180,000 worth of seed and has a “possessory lien” on the crop that takes precedence over the security interest held by the bank.
Under a possessory lien, a party can retain possession of property until a debt has been paid.
Northwest Bank claimed the contract between Hawman Farms and Cover Crop Solutions invalidated all such liens, but Mosman decided that it only barred liens against the licensed radish cultivar — which was owned by another company — and not the physical seed crop.
Sanford Landress, attorney for Hawman Farms, said Mosman’s opinion may also be consequential for other farms, which claim they have possessory liens on the seed.
Hawman Farms grew, cleaned and stored the radish seed, which puts the company in a different legal position than growers who had another firm clean and store the crop, Landress said.
“People with continuous possession of the seed, like Hawman, are going to beat the bank,” he said.
Several other farms that also possessed the radish seed without interruption have filed similar motions citing the Hawman Farms ruling and asking the judge to declare that their possessory liens have priority.
Farms that did not retain possession of the seed still have other valid legal arguments aside from a possessory lien, Landress said. “The jury is still out as to whether they will prevail or not.”
Capital Press was unable to reach James Ray Streinz, the attorney representing Northwest Bank, for comment.