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Published June 30, 2014, 10:41 AM

American Crystal, CEO Berg fighting to stay out of lawsuit

The country’s largest beet sugar producer is fighting to stay out of a federal lawsuit between the sugar and corn industries. American Crystal Sugar Co. and its CEO, David Berg, have both been subpoenaed by corn processors whose claims that high-fructose corn syrup (HFCS) is natural and nutritionally equal to table sugar have been called misleading.

By: Kia Farhang, Forum News Service

MOORHEAD, Minn. — The country’s largest beet sugar producer is fighting to stay out of a federal lawsuit between the sugar and corn industries.

American Crystal Sugar Co. and its CEO, David Berg, have both been subpoenaed by corn processors whose claims that high-fructose corn syrup (HFCS) is natural and nutritionally equal to table sugar have been called misleading.

The processors, including Archer Daniels Midland, the Corn Refiners Association and Cargill, want information from American Crystal regarding genetically modified sugar beets and whether they meet a specific definition of “natural.”

American Crystal has called on the U.S. District judge handling the case in the Central District of California to throw the subpoena out, claiming the information sought is either irrelevant or can be obtained elsewhere.

The defendants subpoenaed Berg late last month. In correspondence with his attorneys, they said they wanted to find out whether American Crystal believes it has been damaged by their marketing of HFCS as “like sugar.”

Berg is fighting that subpoena, saying that while he believes it’s wrong for companies to imply HFCS is the same as sugar, his company hasn’t done any sort of analysis on whether it’s been hurt by those claims.

The defendants also seek to ask Berg why his company left The Sugar Association, one of the plaintiff trade groups, before the suit was filed.

In an affidavit filed earlier this month, Berg said the company pulled out of the association to avoid the suit.

“We were concerned that this case would be very lengthy, expensive and burdensome,” his affidavit said.

Berg’s hunch wasn’t far off. The lawsuit has stretched on for three years, and there’s no end in sight.

Originally scheduled for trial last week, the case has languished in the discovery phase, when parties gather evidence to use at trial.

The sheer number of documents both sides are requesting from each other is gumming up the process, said lead plaintiffs’ attorney Adam Fox.

Both parties are currently close to finishing their depositions, he said. Berg’s subpoena came later than most, and Fox said he doesn’t think it will be enforced.

“It’s frankly beyond me why they would want to bother the CEO of a company who’s got no dog in this fight, but that’s the strategy they’ve elected to take,” Fox said.

Attorneys for the defendants could not be reached for comment.

A complex case

The case essentially turns on whether there are any significant nutritional and compositional differences between sugar and high fructose corn syrup, and whether it’s misleading for corn processors to equate the two.

Plaintiffs in the case, including the Western Sugar Cooperative and the Wahpeton, N.D.-based Minn-Dak Farmers Cooperative, have three objections to how the defendants market HFCS.

They argue it’s false and misleading to say the product is natural and nutritionally the same as table sugar, and they’re fighting a rebranding of the product as “corn sugar.”

The plaintiffs say in court documents that the marketing “harms consumers, harms the makers of real sugar and harms any dialogue based on the truth.”

But Wanda Koszewski, a dietetics professor at the University of North Dakota, said the two products are essentially the same thing, despite subtle differences.

HFCS came on the market in the late 1960s. It typically costs less than sugar, Koszewski said.

And Koszewski said she considers both products natural, even though the plaintiffs argue HFCS is man-made because it must be synthesized from corn.

In the lawsuit, the plaintiffs cite scientific studies linking the rise in HFCS consumption in the U.S. to rising obesity rates.

Koszewski said both products can cause obesity.

“Sugar is sugar,” she said. “The bottom line is, we eat way too much of either one of them.”

A new trial date will likely be set for the case at a hearing in November.

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