Another Lawsuit Filed In Potato Controversy Idaho Firm Alleges Mislabeling, Seeks $10 Million From N.Y. Packer

A legal ruckus over the alleged mislabeling of potatoes as having been grown in Idaho has taken another turn as the state’s largest potato-growing operation has sued a Long Island, N.Y., vegetable packer.

Larsen Processing and Larsen Farms filed a $10 million suit Friday in U.S. District Court in Pocatello, Idaho, claiming Hapco Farms has violated an agreement that it would not make disparaging comments about a case that went before the Idaho Potato Commission last year.

Settling a trademark-violation case, Hapco paid a $200,000 fine to the commission, plus $65,446 in legal costs, while Larsen paid a $10,000 fine and more than $65,000 in legal fees.

Both parties were allowed to avoid admitting wrongdoing in the case, which alleged that bags and cartons of potatoes had been mislabeled at an Atlanta warehouse and that Midwestern potatoes had been shipped to the Florida-based Publix chain in containers bearing the Idaho trademark.

On March 27, Hapco filed a $25 million suit against the accounting firm of Deloitte & Touche, claiming it had provided a distorted report to the Idaho Potato Commission that falsely exonerated Larsen at the expense of Hapco’s reputation.

Hapco alleges Larsen tried to steal its customers and “secretly staged and videotaped its own employees repacking (non-Idaho) potatoes.”

Larsen’s suit against Hapco charges those statements are false and violate their settlement.

Hapco began subleasing Larsen’s Atlanta warehouse space in June 1995, repacking Idaho potatoes for Publix.

Hapco ran the day-to-day operation.

Larsen’s attorney, Winston Beard, said Larsen began hearing of suspicious activity and videotaped the shipping line.

Larsen’s crews reported a Hapco supervisor had ordered them to bag non-Idaho potatoes for sale to Publix, a Larsen official said.

A Larsen employee made the videotape, which Hapco claims was staged.