The Arkansas Rice Research Promotion Board (RRPB) met Nov. 12 to discuss, among other things, the class action lawsuit regarding “check-off” funds. At the meeting, Arnold Jochums, from the Arkansas attorney general's office and representing the RRPB, reported that additional first-point rice buyers had joined the suit asking for refunds of money collected by the board between 1996 and 1999.
Currently, there are 14 members of the class asking for just over $1.2 million.
The suit was ruled a class-action last March after the Arkansas Supreme Court heard arguments made by representatives of Carwell Elevator in Cherry Valley and Poinsett Rice and Grain in Waldenburg (who had based their suit on one filed earlier by Gulf Rice Arkansas). After agreeing with the companies that, essentially, the money collected amounted to unfair taxation, the court sent the case back to Little Rock Circuit Court Judge Collins Kilgore.
“We're waiting on a court hearing to find out how the (RRPB) is supposed to pay these companies,” says George Dunklin, RRPB president. “Since they won the class action suit, the board needs to know where we're supposed to get money to pay them. We don't have any money (in escrow) to pay them, so I suppose it will come from future earnings.”
Dunklin says Jochums believes the hearing will take place quickly — “maybe in the next month or so.”
For now, the board isn't planning to hold money coming in from the latest crop. “We haven't been told to do that,” says Dunklin. “Until the court tells us what to do, we'll continue with the obligations we've already made. That's all we can do. Who knows what the judge will rule?”
On another front, several months ago the Arkansas Rice Growers Association filed an intervention to stop any RRPB research money being spent on class-action refunds. That intervention recently resulted in a formal agreement to exclude research dollars from the pay-back fund.
“Actually, there was never any intention to use research money to pay for this suit. It was never an issue to begin with,” says Dunklin.
Recent court decisions have placed other commodity “check-off” funds in precarious states. Many observers are concerned some may have to be retooled or done away with. Dunklin says he's been watching developments keenly.
“It's like a cloud over our heads. We don't know where it's going. It's worrisome, and there's no telling how (these other commodities' programs) will be resolved through the courts.
“(Regarding the RRPB), we certainly hope nothing happens to the research and promotion dollars in this system because we believe in the program. It's very beneficial for the rice industry to have this program. We can't do anything about these other check-off funds, but we're certainly keeping a close eye on them.
“(The first-point buyers) won this suit, and I accept that. We accept the legal system. Obviously, we'd like this money going to promotion — that's our job. But this is something coming from outside our board. The board is just responding to a legal ruling. We now need direction from the court as to how to handle it from here.”
(Editor's note: for in-depth background on this story, please see, “Arkansas ruling giving rice industry the jitters” at www.deltafarmpress.com)