San Benito Foods takes City of Hollister to court

Company claims violation of CEQA, Brown Act

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San Benito Foods employees sprayed the driveway to clean any excess tomatoes that fell to the ground. (Juan Reyes)

The feud between San Benito Foods and the City of Hollister may have to be settled in court as the tomato cannery filed a lawsuit in San Benito County Superior Court, alleging the city violated the California Environmental Quality Act and the Brown Act.

The company is also claiming the city committed a breach of contract and asked for declaratory and injunctive relief.

In a court filing, San Benito Foods, which is owned by the Neil Jones Food Company based in Vancouver, Wash., accused the city council of “extortion of fees” for removing sludge from pond No. 2 at the city’s industrial wastewater treatment plant. The cannery uses the pond to dispose of its wastewater.

David Weiland, attorney at Fresno-based Coleman & Horowitt LLP, who is representing San Benito Foods, said the city council originally told the company they would have to pay $4.5 million to use the city’s discharge permit. He said they reduced the number to $2.5 million but the negotiation process fell through several times.

“If I could characterize these negotiations I would describe them as bizarre,” Weiland said. “We have asked the city repeatedly to be able to meet and to sit down and discuss these issues with them face to face and we have been rebuffed at every turn.”

A hearing before Judge Steven Sanders was scheduled for July 20 and 23 but were delayed because Sanders cited a personal conflict as a city resident who uses its water and sewage systems, according to Weiland. The case will go before Judge Omar Rodriguez on Aug. 5 at 1:30 p.m. at the San Benito County Courthouse. 

Weiland said the city violated the Brown Act after the city council met in closed sessions to discuss and make changes prior to litigation. He said the only way San Benito Foods learned about changes was digging through information provided from past meetings. 

“Under the Brown Act, the city council just simply could not do that in closed session,” he said.

San Benito County Superior Court granted San Benito Foods a temporary restraining order that prohibits the city from hindering the company’s operation this season and keeps the terms of the company’s 2019 operating permit intact.

San Benito Foods has been located in Hollister since 1937. The company employs 90 workers year-round and as many as 445 from July to October.

Mike Chambless, the city’s Management Services Director, said San Benito Foods produces solid waste that gets hauled away from their downtown Hollister site. But some of it is left behind and washes down the storm drain, which winds up at the industrial waste water treatment plant.  

“In the past we’ve had equipment fail and tomatoes down there that San Benito Foods had to go fish out of the ponds,” he said. 

The city currently holds the discharge permit but Chambless said they want to hand it off to San Benito Foods in 2021. He said the company refuses to reply to their request and take over the permit.

“They obtain a temporary restraining order against us and the court has said, ‘the City of Hollister, until we can sort this all out, you have to take their waste,’” he said.  

Chambless said they have seven ponds and pond No. 1 has about four to five feet of water cap on top of the sludge. He said it’s not a critical emergency to dredge the pond, but it’s starting to get to the threshold where there isn’t enough water to keep the material suspended long enough to allow the bacteria to eat as much as it can before it starts to build up.

“As you start diminishing your capacity, more and more sludge will build up quicker because you’re getting less digestive material settling to the bottom of the pond,” he said.  

Sludge is a semi-solid slurry produced by various industrial processes, including water treatment, wastewater treatment or on-site sanitation systems.

Chambless said the sludge becomes an issue because of its pathogen content, making it a potential health and environmental hazard. The contaminants can then percolate into the groundwater basin.

Chambless said they’re working on a project that will transform Pond No. 2 to filter all of the storm water to five microns, equivalent to a grain of sand, before it goes into the river. 

“There are some expensive devices that we’re going to have to install all over town to do this,” he said. 

Chambless said the removal of sludge in Pond No. 2 isn’t the only issue. The city has also been fined several times by the Central Coast Regional Water Quality Control Board. 

Chambless said they’ll soon be hit with a notice of violation regarding total dissolved solids. 

“That’s a source of water issue with the cannery and they need to address it,” he said. “Their well water is almost at the legal limit for total dissolved solids when it comes out of the ground.” 

He mentioned that the water from the cannery’s well contains excessive levels of total dissolved solids and nitrogen. San Benito Foods needs to have its own reverse osmosis system at the cannery in order to comply with CEQA regulations, according to Chambless.

Weiland said the quality of the water was never mentioned to anybody at San Benito Foods.

“That issue has never been discussed in any of the emails or negotiations to which I have been privy over the last three or four months,” he said.  

Weiland added that the city is also not following the proper CEQA guidelines for the project they are trying to implement at the wastewater treatment plant. 

Weiland said San Benito Foods received an email on April 15 from a consultant to the city who was a private engineer, advising that the city council wanted additional conditions added to the discharge permit. He said included in those conditions was a demand that the company pay the city $4.5 million.

“Attached in the revised draft of the permit was all of the conditions, and the conditions were significantly different than what had been discussed after that point,” Weiland said. 

Weiland said he contacted City Attorney Jason Epperson and had a brief conversation with him. In June, the city attorney sent Weiland a letter stating that San Benito Foods wouldn’t be able to get an operating permit if they didn’t agree with the city council’s demands, including the payment of $2.5 million.

“That was a line in the sand,” Weiland said. “At that point we had no choice but to seek court intervention because it was obvious that we were not going to be able to get a permit and we were running out of time.”