U.S. District Court Enjoins Secretary of Agriculture from Spending Monies Assessed Joseph Gallo...

SACRAMENTO, Calif.--(BUSINESS WIRE)--July 27, 1996--Following a hearing held on July 12, 1996, District Court Judge Edward J. Garcia granted the request of Joseph Gallo Farms to enjoin future expenditures of the funds assessed against Gallo Cattle Company based on its milk production.

The

ruling requires the Secretary of Agriculture to escrow and hold all funds received from Gallo by way of assessments, amounting to several hundred thousand dollars annually which is used to support the California Milk Advisory Board's generic advertising and other promotional activities. The defendants argued strenuously against granting this injunction and requested an opportunity to offer further evidence which was refused.

Regarding this ruling, John Whiting, general counsel for Gallo stated: "This ruling, based on the extensive evidentiary declarations made by both sides, indicated that the judge felt that Gallo was likely to prevail at the trial of the case on the merits at which time Gallo will seek a permanent injunction against enforcement of the assessments on the grounds that the enforcement of the underlying marketing order violates Gallo's free speech and fourteenth amendment rights."

Further, the court ruled that the CMAB because it was not an independent public entity it was not a proper party to the action and that the state was immune from this action, however the court ruled that Gallo could maintain the suit for prospective relief against Secretary Veneman in her official capacity as Secretary of the Department and granted leave for Gallo to sue Veneman individually for other relief sought in the action.

"Our complaint will be amended and the matter will now proceed full speed ahead to trial," Whiting added.

CONTACT: The Londre Company, Inc. (for Joseph Gallo Farms)

Patti Londre, 213/851-8230, ext. 105