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Aguilar v. Pennsylvania Apple Marketing Program

January 19, 2006


The opinion of the court was delivered by: Yvette Kane United States District Judge


Before the Court are motions to dismiss filed by Defendants Pennsylvania Apple Marketing Program, John Rice, Kay E. Hollabaugh, Larry Wright, Steven Linvill, H. Lee Showalter, Jack Bream, Gordon Post,*fn1 Kenneth N. Dries, Brenda Briggs, Rice Fruit Company, and R&L Orchard Company. (Doc. Nos. 8, 9, and 10.) The motions have been fully briefed and are ripe for disposition.

I. Background*fn2

On March 11, 2003, Plaintiff Diana Aguilar was hired as Executive Director of the Pennsylvania Apple Marketing Program ("PAMP"). As Executive Director, Aguilar controlled PAMP's budget, devised and executed apple marketing events, and participated in cooperative marketing arrangements with the Apple Marketing Boards of other states and with programs promoting the nationwide exportation of apples overseas.

PAMP is a corporate and political body, exercising powers granted to it by the Commonwealth of Pennsylvania. PAMP's activities and ability to generate revenue are governed by Pennsylvania's Agricultural Commodities Marketing Act, 3 Pa. Cons. Stat. § 4501 et seq. (2005). PAMP generates revenue by taxing Pennsylvania apple producers pursuant to its statutory authority. PAMP is required to conduct all promotions "without reference to any particular firm's or individual's brand or trade name." 3 Pa. Cons. Stat. § 4505 ("Marketing Order").

Shortly after Aguilar began working with PAMP, she found there was pressure exerted on her to give preferential treatment to the largest apple producer in the Commonwealth, Rice Fruit Company. John Rice, a major stockholder and officer in both Rice Fruit Company and R&L Orchard Company served as a member of the Board of PAMP during Aguilar's employment. In addition to Defendant Rice, Kenneth Dries, Jack Bream, Kay Hollabaugh, Larry Wright, H. Lee Showalter, and Gordon Post also served as members of PAMP's Board during Aguilar's employment.

In October of 2004, Rice forwarded Aguilar an e-mail from Costco. Costco had plans to arrange a cookbook based on recipes from its vendors. At the time of Costco's solicitation, a team of apple producers and suppliers consisting of Rice Fruit Company and New York Apple Sales ("NYAS") supplied apples to Costco. On behalf of Rice Fruit Company, Rice committed to half of a $40,000 advertisement to be shared with NYAS. Subsequently, Rice sent Aguilar an e-mail requesting PAMP to pay for half of his $20,000 share for the advertisement.

When PAMP's Board deliberated on whether to contribute PAMP funds to the Costco advertisement, Aguilar voiced budgetary reasons for not giving Rice $10,000 to support the advertisement as $10,000 was more than 10% of PAMP's total fall budget.However, PAMP's Board voted to support the advertisement and on January 25, 2005, PAMP sent Rice Fruit Company a check for $10,000. Although the Costco cookbook did not blatantly market any specific brand, throughout the cookbook, John Rice's name is mentioned and the Eastern Apple logo is used.*fn3

As Executive Director of PAMP, Aguilar was charged with planning two annual cause-related promotions of Pennsylvania apples with Wal-Mart stores located in Pennsylvania. PAMP had been performing such promotions prior to Aguilar's employment with PAMP. During Aguilar's planning of PAMP's promotion with Wal-Mart early in 2005, Rice Fruit Company was the sole Pennsylvania apple distributor under contract with Wal-Mart. Sometime during the planning of the promotion, Brenda Briggs, an account manager with Rice Fruit Company made representations that the promotion was a joint promotion between Rice Fruit Company and PAMP and insisted on maintaining direct involvement with the promotion. Briggs represented that the promotion was a joint PAMP/Rice Fruit Company promotion in her business plan for Wal-Mart and had requested to speak about it at Wal-Mart corporate meetings. Moreover, Briggs demanded to be the point person for the promotion and attempted to have all PAMP-Wal-Mart communication directed by her, continued to determine the winners of the promotions by using her vendor software, and made frequent demands on Aguilar to increase funding for the promotion.

Beginning in February of 2005, Aguilar felt that her power to promote Pennsylvania apples in compliance with the Marketing Order was being overridden by the actions of Rice and Briggs who were using PAMP as a marketing and funding tool to promote Rice Fruit Company. On March 1, 2005, in response to messages from Aguilar that she needed to resolve areas of conflict with Briggs and Rice Fruit Company, Rice sent an e-mail to Aguilar outlining how the Wal-Mart promotion was important to Rice Fruit Company. In the e-mail, Rice also explained that Aguilar's job performance was fine with the exception of her problems with Rice Fruit Company's sales agent.

On March 2, 2005, Aguilar sent Rice an e-mail specifically outlining the actions of Rice and Briggs with regard to the Wal-Mart promotion which were violative of the Marketing Order.Also, on March 2, 2005, Aguilar sent an e-mail to Richard Hite, the buyer from Wal-Mart in charge of the promotion, seeking guidance on the proper roles for PAMP and private suppliers in the promotion. Rice was copied on Aguilar's e-mail to Hite.

Later on March 2, 2005, Rice responded to Aguilar's e-mail message to Hite stating, "Perhaps we are dealing with an incipient nervous breakdown here. Do you think Richard is going to respond to this?" Hite also responded to Aguilar's e-mail of March 2nd, stating his desire to make sure that "nothing can be looked back upon this as being supplier supported in anyway."

On March 4, 2005, Aguilar received a phone call and e-mail from Wright stating that through a unanimous vote by PAMP's Board of Directors, she was being placed on administrative leave of absence with pay for two weeks commencing immediately. On March 7, 2005, Aguilar received a phone call from PAMP's Acting Chair, Hollabaugh, requesting that she resign from her position with PAMP under an agreement that she would receive an additional two weeks of pay if she complied by Friday, March 18, 2005. Aguilar declined this offer.

On March 17, 2005, Aguilar received a fax from Showalter indicating that she was to be formally terminated by PAMP as of the close of business on March 18, 2005. Aguilar never received notification from PAMP or its Board of Directors as ...

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