Becker & Poliakoff

Tariffs, Tomatoes, and How Litigation Resolved the Dispute

Tariffs, Tomatoes, and How Litigation Resolved the Dispute

Becker & PoliakoffLitigation involves all different types of disputes. Take the fight over tariffs involving tomatoes where the United States Supreme Court was asked to determine if a tomato is actually a fruit or a vegetable.

This story starts years ago when a tariff was passed that imposed a tax on all imported vegetables, but not on fruit. The question whether a tomato was considered a fruit or a vegetable had serious financial repercussions on produce sellers.

John Nix & Company was one of the largest produce sellers in New York when this tariff was passed. The company wanted to avoid paying a 10% tax on tomatoes and therefore filed a lawsuit challenging this tariff, arguing that a tomato is a fruit, not a vegetable.

John Nix & Company relied on the definitions of a “fruit” and “vegetable” as found in the dictionary during the trial. They also presented expert witness testimony distinguishing the difference between a fruit and vegetable.

It turns out that the critical distinction between a fruit and a vegetable focuses on the existence of the seeds. A fruit is the seed bearing structure of the plant, whereas a vegetable can be just about any part of the plant that is consumed.  Generally speaking, if it has seeds it should be considered a fruit.

Consequently, since tomatoes have seeds, John Nix & Company argued that it should be considered a fruit and excluded from the tariff on imported vegetables.

This dispute made its way all the way to the United States Supreme Court, where our nation’s highest court was ultimately asked to decide whether or not a tomato is a fruit.

The Supreme Court concluded that a tomato is a vegetable and subject to the tariff.  In doing so, the court acknowledged that tomatoes meet the technical definition of a fruit. However, and even though a tomato is technically a fruit, the court went on to conclude that tomatoes are not regarded as a fruit in everyday use in our society. The court noted that “in the common language of the people, whether sellers or consumers of provisions, [tomatoes] are vegetables.”

This case illustrates how a piece of legislation could directly impact the bottom line for business. Understanding the flow and impact of legislation on your business is vital for any industry, especially industries that are highly regulated by either our state or federal government. One generally needs to take a proactive approach during the legislative process to help prevent legislation from being passed that is potentially harmful to your bottom line. But, if you can’t do that then you can certainly turn to the courts to try to undo that damage.

Litigation can certainly be time-consuming and expensive, but with the appropriate strategy the right results could reap significant benefits and rewards. Indeed, litigation can be an effective tool used to expand your business as well as to protect your market share. If your business is challenged by a piece of legislation then you may need to litigate to challenge the validity of the law that was passed.

Contact me if you wish to discuss this case or if you are experiencing an issue similar to that of John Nix, which resulted in his filing of a lawsuit to challenge the tariff imposed on his business.