Grower faces July 10 deadline in lawsuit

DA's office accuses Monterey Mushrooms of diverting waste off Morgan Hill property

Santa Clara County’s lawsuit against a national mushroom grower accused of dumping toxins into a creek in north Morgan Hill is still working its way through the courts.

The defendants—Monterey Mushrooms and company CEO Shah Kazemi—have until July 10 to respond to the initial complaint that was filed by District Attorney Jeff Rosen’s office in December 2018. The defendants were given extra time to respond to the DA’s accusations because in January a Superior Court judge ruled the lawsuit a “complex case,” Deputy DA Melanie Griswold explained.

The DA’s lawsuit alleges that Monterey Mushrooms’ growing facility on Hale Avenue violated multiple Fish and Game and Business and Professions laws from 2012 to 2017. Specifically, the DA’s office states the facility allowed its farm production waste and other wastewater to flow into Fisher Creek and its tributaries, which border the north Morgan Hill facility.

Fisher Creek flows into Coyote Creek, which flows into the San Francisco Bay. Coyote Creek is home to steelhead trout, California tiger salamanders and California red-legged frogs, notes the DA’s lawsuit.

The DA’s lawsuit is seeking $67 million in damages from Monterey Mushrooms.

Monterey Mushrooms, which is based in Watsonville and owns growing facilities all over North America, did not respond to a request for comment this week. A company spokesman has previously denied that the north Morgan Hill facility intentionally allowed wastewater to flow off the property, and incidents cited in the DA’s complaint were the result of torrential rainstorms in 2016 and 2017.

After Monterey Mushrooms’ July 10 deadline to submit a response to the DA’s lawsuit will begin “the formal discovery process,” or evidence sharing between the defendants and plaintiff, Griswold said. Then the parties are expected to return to court in October, possibly to set a trial date.

Rosen’s complaint alleges the environmentally harmful and unfair business practices have been deliberate and pervasive at Monterey Mushrooms’ Morgan Hill site. The lawsuit is asking the Santa Clara County Superior Court for $67 million in damages for Monterey Mushrooms’ alleged repeated violations of the state laws.

The lawsuit describes how Monterey Mushrooms has allegedly manipulated the Morgan Hill property to divert the farming operation’s harmful production waste to flow into Fisher Creek. The DA’s office accuses the company of committing the violations in order to cut operation costs.

Some of Monterey Mushrooms’ facilities in other counties have also come under scrutiny in recent years, according to authorities. The Central Coast Regional Water Quality Control Board has accused the company of diverting or pumping wastewater into creeks from sites it operates in Santa Cruz and San Luis Obispo counties.

At its facilities in Watsonville and Royal Oaks, Monterey Mushrooms has been working with RWQCB regulators to clean up the properties. “We have our technical staff working them to upgrade their systems so they don’t have (unpermitted) discharges in the future,” said Thea Tryon, RWQCB Supervising Engineering Geologist.

But at the same time, the Central Coast authorities are in the process of taking enforcement action against Monterey Mushrooms in relation to the allegations in Watsonville and Royal Oaks, Tryon said. She declined to reveal details of the pending enforcement.

“They’ve done a lot to try to fix their issues,” Tryon added.

The facilities in Watsonville and Royal Oaks fall outside Santa Clara County’s jurisdiction.

Griswold said while the Santa Clara County case hasn’t reached a negotiation phase, an out-of-court settlement is “always on the table.”

“We’re going to keep an open dialogue and see if we can achieve a resolution without the need for a trial, but it’s probably premature” to begin such discussions, Griswold said.

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