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Walnut Growers Say|Diamond Foods Cheats

STOCKTON, CALIF. (CN) - In a class-action complaint, the Walnut Producers of California, a 1,700-member co-op, says Diamond Foods cheated them and breached contract after a 2005 merger by failing to offer a fair price, failing to offer any price for the 2006-07 harvests, but making bad-faith, take-it-or-leave it offers for growers' entire crops.

The nonprofit co-op merged into Stockton-based Diamond Foods in 2005, after a 95-year history. This claim in San Joaquin County Court says the 1,700 members of the former co-op grow 42 percent of the walnuts in California, which grows most of the walnuts in the United States.

Plaintiffs claim 95 percent of the 1,700 growers accepted Diamond's multi-year offer to buy their crops at a fair price, for an average term of 5 years, but that Diamond breached contract by failing to make good faith offers, giving growers no choice but to sell their entire crop at unfair prices or let the nuts rot on the ground.

They claim Diamond's dispute resolution process is unconscionable.

They demand an injunction, restitution, disgorgement and attorneys' fees.

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