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Another Chapter Closes For The Nolan’s And Ocean Spray While A Scholarship Fund Opens Doors For Others

Jim Prevor’s Perishable Pundit, March 5, 2010

We have extensively chronicled the legal dispute, the issues of business ethics at stake and the moral courage shown by Jim and Theresa Nolan, as they and their company, The Nolan Network, sought justice in the courts in their dispute with Ocean Spray.

Pundit sister publication, PRODUCE BUSINESS, stood up in this matter with two seminal pieces both written by industry veteran Bill Martin:

Ocean Spray Sued By Longtime Associates

Are Any Lessons Learned From Ocean Spray Trial?

After a defeat in the courts, Ocean Spray decided it wanted to settle and a settlement was reached. Bill Martin tells the tale:

Settlement Ends Long Legal Battle
Between Jim and Theresa Nolan And Ocean Spray

Scholarship in Jim Nolan’s Name is Planned

Jim Nolan was always for openness and fairness in his business dealings, and on several occasions Ocean Spray Cranberries Inc. grew tired of Jim airing his concerns over possible violations of anti-trust violations as he refused to sign confidentiality agreements with his former employer. Thus, what would Jim, who died of heart disease two years ago come March 2nd, think of his wife, Theresa Nolan, who has “mutually resolved the lawsuit with the dismissal of all appeals from the judgment” and would have no comment as to any questions regarding a settlement?

The agreement finally ended a legal battle involving Jim and Theresa and their sales and marketing company, The Nolan Network, and the huge fruit cooperative based in Middleboro, Massachusetts..

“Jim would be happy he was vindicated by the decisions of the jury and judge at the end of the trial and that those rulings still stand,” said Theresa on February 26, eight days after a settlement was formally reached between the parties.

Theresa is referring to a jury, where on May 29, 2009 at least 11 of the 13 members in Superior Court, Plymouth, Massachusetts, found Ocean Spray liable for unfair and deceptive business practices. The Nolan Network lost most of its business subsequent to the fallout of events leading up to the Nolan’s filing the civil suit. Following the decision, Theresa was awarded over $2.8 million in damages, legal fees and interest in the case.

At the heart of the matter were the Nolan’s concerns of the cooperative issuing a set price for fruit before the fresh cranberry season started, but later offering cheaper fruit and special deals on transportation costs to some competitors over others. These anti-trust issues reared their ugly head throughout last year’s trial, although they were never addressed in the court’s final ruling. At the center of the allegations were Ocean Spray’s James Lesser, who has since left the organization, as well as Richard O’Brien, who worked directly with Jim Nolan and The Nolan Network.

This case had to be costing Ocean Spray a proverbial arm and a leg in more ways than one. Goodwill and trust must have been jeopardized with customers, such as Sam’s Club and BJ’s, which found out the co-op was giving better deals to Costco. Ocean Spray’s litigation costs had to be hefty. Add to this, the Superior Court ruled Ocean Spray must pay interest and legal fees while both sides went through the appeals process. We could be talking millions.

In an e-mail to Ocean Spray, comment was sought to whether the co-op had taken steps to correct its unfair and deceptive business practices, and does it acknowledge any wrong-doing in this case? After many days, we finally received a brief statement from John Isaf of Weber Shandwick, a public relations firm Ocean Spray has retained:

Ocean Spray and Nolan Network, Inc. have mutually resolved all litigation matters with the dismissal of all appeals from the judgment. The settlement is not an admission of liability of any kind by any party.

We will not provide any further comment on any additional details of the settlement.

In a sense, there are no winners in a tragic story such as this. Jim Nolan in essence was a whistle-blower who decided long ago it would be worth the stress, and ultimately losing his health and life, to protect the interests of Ocean Spray customers and its growers. He put a career’s worth of goodwill, trust and integrity on the line fighting for Theresa, The Nolan Network and himself.

Although Jim is gone, he will not be forgotten. “I am establishing a charitable trust to fund a scholarship in Jim’s name so this experience will have a lasting meaning that benefits others,” Theresa says. “I want my dearest industry friends to know their love and support sustained me through Jim’s death and our legal battle, and I am deeply grateful.”

Nobody can blame Theresa for finally settling. Continuing to fight is expensive, emotionally draining and, whatever the righteousness of one’s cause, risky because judges and juries are not completely predictable.

There comes a time in most battles when it is better to declare victory and go on with one’s life than to allow one’s life to be consumed by the battle. This was that moment for Theresa, and we have no doubt Jim would have endorsed her decision to settle.

It is not clear that Ocean Spray’s travails are over. We raised the question here as to whether Ocean Spray violated PACA regulations and, if so, there may be actions yet to come.

What Ocean Spray has also not disclosed is what price it has paid to settle the matter with its various customers. It is simply inconceivable that Sam’ Club wouldn’t demand that it be given the same prices, retroactively, that Costco got — in accordance with the Robinson–Patman Act. Wal-Mart, Safeway and other retailers that competed with HEB surely demanded the same recompense — at a minimum. More likely these retailers also demanded compensation for the loss of business, profit and brand value that came from their being uncompetitive on cranberries due to Ocean Spray’s pricing concessions to Costco and HEB. This would be many millions of dollars.

For the industry at large, the case has raised many important ethical issues from the value of truth-telling — does one acquire legal and ethical obligations when one issues a price list — to what is a reasonable expectation of an employee. Can one expect an employee to lie? To remain silent in the face of a lie by management? And finally there’s the simple question of how to treat people. For many, the most horrid part of the story is the whiff that certain people really wanted to destroy the Nolan’s, personally and professionally, when they could not control them.

There was one wonderful thing that came out of this… individuals in the industry, some with plenty to lose, stood up for what they thought was right, and stood up for their friends. That is what Theresa is talking about when she speaks of “love and support” that sustained her.

The scholarship in Jim’s name will continue to give a gift, but Theresa, a paragon of patience, and Jim, a man who simply knew no other way than to proceed with what he believed in, have given us all a shining example of living a life of unwavering moral standards and fighting the good fight with grace under pressure. Theresa’s thanks are kind but, in truth, we owe the Nolans more than they owe us.

With best wishes for Theresa in the days… and decades… to come.

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