By KEVIN WALKER
Michigan Correspondent

LANSING, Mich. — Agricultural stakeholder groups are applauding a decision by the state Supreme Court last month upholding their interpretation of the law creating the Michigan Apple Committee and other commodity groups.

The case started several years ago when Appletree Marketing, a former apple distributor, withheld grower funds that were to be held in escrow and paid to the Michigan Apple Committee (MAC), one of the groups created under a state law called the Agricultural Commodity Marketing Act (ACMA). There are 15 such groups in Michigan.

Appletree withheld the funds for 2004 and 2005, as it was supposed to do, but instead of paying the money to MAC they used it for their own purposes and ended up going out of business. The withheld money amounted to just over $55,000.

“MDA (Michigan Department of Agriculture) and MAC firmly believe grower assessment fees must be used to market Michigan products helping to grow the state’s $71.3 billion agri-food sector, not to pay personal or other debts,” said Don Koivisto, MDA’s director in a statement. “We are pleased the Michigan Supreme Court upheld the Act that has worked so well to help Michigan’s farmers market their products around the country and the world, as well as perform critical research making Michigan’s agricultural commodities even better.”

According to the opinion handed down by the Michigan Supreme Court March 10, 2010, the main issue at hand was whether or not the MDA and MAC could go after Appletree’s owner, Steven Kropf, for the money he was supposed to have paid to the committee through his ownership and management of Appletree Marketing. Two lower courts had ruled that they couldn’t, arguing that ACMA provided for a relatively narrow course of action against the company and that ACMA in effect nullified their ability to take any action against the owner personally.

Last month the supreme court disagreed, stating in its opinion, “the plain language of the statute does not limit the remedies the (MDA) director may pursue. Contrary to defendants’ argument that the ACMA provides the exclusive remedies, the language provides that “any other remedies” may be pursued “in addition” to those explicitly described.

In the conclusion, the court wrote, “we further hold that Steven Kropf may be held personally liable for any intentional torts he is proved to have committed in the course of operating his business.” The opinion notes that none of this is proof that Kropf did anything wrong, only that the MDA has a right to try and prove that in a lower court.

“We’re very happy with the results, but this isn’t over yet,” said Denise Donahue, executive director of the Michigan Apple Committee. “The significant points are, we can go after treble damages and court costs and we can go after the corporate officers and owners. That has been the practice for 30 years.”

Donahue said this particular case has been going on for several years. In this case, she said, the problem was that a lower court decided the MDA and MAC could only collect the unpaid assessment dollars.

“We decided that, although the company was bankrupt, we just couldn’t let the precedent stand,” she said.

Donahue added that the people involved in this who decided not to pay the assessments are still in the apple packing business. The real “teeth” in the ACMA law, she said, is the ability to collect more than just unpaid assessments.