Two powerful farming companies are locked in a multi-million legal battle in Fresno County Superior Court. Credit: Image by Von Balanon/Special for Fresnoland

What's at stake:

When the Assemi family parted ways with Stewart Resnick four years ago, they were worried about a $15 million crop bonus.

Now, hundreds of millions of dollars are at stake in a court battle over a backroom deal Resnick made in 2015.

Four years ago, two of the biggest farmers in California sent messages to each other regarding the biggest farmer in America: Stewart Resnick.

What the messages made clear is that Resnick’s personal relationship had started to fray with Farid Assemi, a pistachio grower and home builder who had immense acres on the west side of Fresno County. Who was stepping in as peacemaker: it was none other than John Vidovich, the second biggest grower in the state, who had a reputation for feuding over land and water with other big growers.

The subject matter at hand was whether Assemi had betrayed his friendship with Resnick. In the previous months, Assemi had threatened Resnick by taking steps to build the state’s biggest pistachio processing facility in west Fresno County – a facility even bigger than the one Resnick had outside of Lost Hills in Kern County. Resnick, a man who controlled 60-65% of California’s pistachio supply, perceived this as a direct challenge to his reign.

The two men were not only friends, but they also had past business relationships, including loans to Assemi for tens of millions of dollars. In spring 2018, Assemi wanted an extension on a $75 million loan Resnick had made in 2014. When Resnick made it clear that he had no interest in Assemi’s proposal, negotiations to extend their business partnership crumbled. Hot on rejection, Assemi came out to his former business partner with the idea for a rival facility to begin operation in 2020, after his existing contract with Resnick expired.

Vidovich told Farid not to challenge Resnick’s throne, and only use the plans as a bargaining chip. “Only one person can be king here,” Vidovich told Farid in a text message. “Stewart is taking this personally, and you have to let him have this one.”

“He is the king of pistachios and you cannot cross history. Draw up the plan but DO NOT START CONSTRUCTION.”

Farid’s bluff didn’t work, and he and his son, Kevin Assemi, never backed off their plans.

Now, the Assemi family is in a billion-pound pistachio stand-off with Resnick in Fresno County’s Superior Court.

The case wending its way through the legal system over the coming month offers a peek into a great California drama, a rare look into two empires of agriculture.

It brings to light everything from the details of genetic engineering, to backroom handshake deals, to heirs to farming empires and one Fresno family’s quest to take on arguably the most successful agricultural mega-company in history.

It also pits two families from starkly different backgrounds, one Muslim who emigrated in the 1970s during the fall of the shah in Iran, and a Jewish family who migrated to California from New Jersey in the 1950s. Both clans went on to acquire great wealth and influence.

At the heart of the case is a breach of contract claim brought forward by the Assemi family in the final months of 2019, when Farid’s son, Kevin, withheld the family’s pistachio crop from Resnick’s nut co-op, Wonderful, because of fear of sabotage from America’s wealthiest farmer.

The jury will have to decide whether Resnick’s actions in the lead up to Kevin’s stoppage were truly a breach of contract – in which case Resnick could be on the hook for tens of millions of dollars – or whether Farid’s son sunk the family ship. If Resnick’s lawyers can convince the jury of the latter, the Assemis might be liable for five years of crops owed to him – perhaps worth as much as $170 million.

One of the through-lines of the Assemi case is how Resnick wields unprecedented power in the California almond and pistachio industry: by rewarding his friends and punishing his enemies.

Eight years ago, according to testimony from the case, Resnick gave Farid, the biggest pistachio grower in Wonderful, a blank check to a secret weapon – a market advantage nobody had, on a scale enjoyed not even by Resnick himself. In a delicate balancing act Resnick had created in the pistachio market, it was an attempt to stave off a rival for another decade.

But when Farid used that goodwill to seed a new empire, friend turned to foe. And within that frame, Resnick claims he played by the rules of the game. The Assemis miscalculated, Resnick’s lawyers claim, and they are now simply facing the wrath of the king. 

Super trees and a $75 million loan at center of Resnick’s lawsuit with Assemis

In the opening arguments on Oct. 16, a picture emerged over how two powerful friends could fall so far. Farid Assemi was one of the first partners in Resnick’s Wonderful nut co-op, built in the mid-90s and early 2000s.

Since 1988, the Assemis have been pistachio farmers. Farid had been the first in his family of Iranian merchants to settle in the San Joaquin Valley, where they initially started in home-building and clothing stores in the middle of Fresno’s suburban boom. 

By 2004, when Resnick was starting what would become the biggest nut company in the world, the Assemi family owned thousands of acres of pistachios. Their processing plant at the time, however, was in disrepair.

The Assemi-owned plant had eight water discharge violations, according to a Nov 1, 2004, email from Farid to Resnick. Farid estimated it would cost $1 million to repair the plant. 

So that year, Farid made an agreement with Resnick to get out of the pistachio processing business and start marketing the family’s pistachios through Resnick for 10 years, until 2013. The Assemi family entrusted Resnick’s Wonderful nut co-op to bring their raw pistachio crop to market. Resnick’s vertically integrated company hulled and roasted and salted and bagged and marketed the nuts along the way. 

By the time that contract had expired, a close personal relationship had developed between Resnick and Farid Assemi. Contract disputes between the Assemi family and Wonderful were to be settled, man-to-man, between Farid and Stewart, according to confidential agreements shared at the trial.

In 2014, the family extended its relationship with Wonderful for another five years, until 2019. As part of that agreement, Resnick loaned the Assemis $75 million.

“Absent this loan, I don’t think we would have committed to a multi-year contract,” said Jon Reiter, who at the time was CEO of Maricopa Orchards, the Assemi’s major agricultural holding company. 

Resnick wanted more – to lock in the family for another decade. So in April 2015, he made the Assemi family one of the world’s most productive pistachio growers.

Over the course of the late 2000s and early 2010s, a little-known lab owned by Resnick collected data on the nut yields of individual pistachio trees in his 100,000-acre empire. Resnick identified the most productive trees and cloned them, according to his lawyers. The nut yields of the trees were more than 25% higher, Wonderful’s scientists estimated.

Just as these super trees were finally being perfected, Resnick didn’t use them for himself. Instead, he told his top tree scientists to give Farid “all the trees he requested.” Resnick gave Assemi the super trees without even having negotiated a price, according to his lawyers.

The super tree deal was so beneficial for the Assemis that Resnick thought he had bought their loyalty. He had a shared understanding with his friend that when the contract ended, the Assemis would ink another 10-year deal with Wonderful for the 2020s.

“No contract was needed, no lawyers required,” said Rick Shackelford, a top attorney at Greenberg Traurig who is leading Resnick’s lawsuit against Assemi.

It was the peak of Farid and Stewart’s relationship. “And the trust is with you, and I, I can just shake hands with you and go,” Farid said to Resnick in an April 28, 2014, call that Farid surreptitiously recorded.

Millions on the line in Resnick’s lawsuit against Assemi

In the spring and fall of 2015, Assemi planted 101,000 of some of the world’s first super pistachio trees.

But he planted those trees on land owned by a family LLC, called Sageberry, that wasn’t in Resnick’s empire. With the world’s most productive orchards nearly wholly owned by Assemi, the family had a massive competitive advantage, a market edge that could seed their own pistachio processing empire, which they soon called Touchstone.

Over the next two years, Farid planted even more super trees and encouraged Resnick “not to sell the trees to anyone else,” according to Shackelford.

As negotiations about how to extend the contract into the 2020s began in February 2017, Resnick thought he had paved the way for the agreement with the super trees. As the agreement went forward, deliveries to Assemi would eclipse 400,000 super trees. 

But soon after, the friendship began to fray, and the agreement came apart too. Farid wanted a renegotiated loan from Resnick, using expanded production estimates from the super trees as the financial “platform” that justified the extension. As the trees started bearing fruit, Assemi thought they could nearly double the productivity of their pistachio kingdom by the mid-2020s, according to confidential crop forecasts shared at the trial. After securing the super trees, the Assemis planned on increasing their pistachio production by 140%. 

With super trees on land whose nuts were going to processors other than Resnick, Resnick concluded that Farid had double-crossed him, breaking their handshake deal from three years before. 

“Once he had the trees…he kept trying to get more,” said Shackelford. “After delivering on his end of the bargain, Mr. Resnick did not want to renegotiate.”

Assemi’s money was ‘very, very tight’

After the negotiations fell apart, the relationship began to change. The biggest shake-up, Resnick’s lawyers claim, is that Farid’s son, Kevin Assemi, took over. After rising through the ranks of the family’s business as a tax lawyer, Kevin got involved in talks with top Assemi handlers to open a rival pistachio processing plant, said Jon Reiter, the ex-CEO of Maricopa Orchards. With contract talks stalled with Wonderful, Shackelford said the son came up with an “undercooked” plan to bring the family back into the pistachio processing business at the end of 2019. 

The Assemis argued that Resnick’s unique control of the California pistachio market afforded him a monopoly that gave him the power to set prices across the industry, court documents show.

Resnick ruled over the pistachio industry in a singular way even beyond the control he exerted with almonds, clementines, bottled water, or pomegranates. The Assemis claimed Resnick used his monopoly to “set the grower price based on how much profit it could retain from processing.”

And text messages show that this price-setting power had huge stakes. Kevin Assemi estimated that the family could make an additional 50 cents per pound by processing their own pistachios – up to $25 million more a year just by processing the family’s pistachios alone. If the family picked off even a third of Resnick’s pistachio market share, the family could make over $100 million annually.

On Aug. 10, 2018, Farid emailed Resnick telling him the family’s “intent to build a pistachio processing plant for the 2020 crop year.”

Within days of the email, Resnick made a final attempt to convince Assemi otherwise. In August 2018, in one of their last meetings to get a new pistachio deal done, Resnick met with Assemi’s team to persuade Farid not to build the rival plant – a 160,000 square foot behemoth. 

“There were efforts for over a month to persuade Mr. Assemi” to stop preparations on the plant, said James Bennett, a top lawyer at The Norton Law Firm who is representing the Assemi family.

Resnick’s pleas to his old friend didn’t work and he decided not to give the Assemis a new loan. At a Wonderful meeting in Visalia six months later, Resnick said anyone who wanted to rock the boat in the state’s pistachio business was barking up the wrong tree. 

“As I stand here, I ain’t going to let that happen,” Resnick told an audience of growers. “So if people think they’re going to do it, we’re going to fuck them.”

The Assemi family, however, had more immediate problems with Resnick. The Assemis were already overleveraged, said Shackelford, which made an undertaking like the huge pistachio plant nearly impossible.

The family needed to pay back Resnick’s $75 million loan by 2021, according to court documents. In July 2019, Farid emailed his brother, Darius, that if a few lenders didn’t come through, the family’s situation would deteriorate. 

“Our cash is very, very tight,” Farid told Darius. “I am scrambling.”

With 50 cents more per pound to be made on pistachio processing, however, Kevin Assemi told his dad in an August 2019 text “this is the dark before the dawn of amazing things.”

Five days later, Kevin sent an email to Wonderful that would start the lawsuit. 

As the last nut crop the Assemis were to hand over to Wonderful was being harvested, Kevin asked Andy Anzaldo, Resnick’s head of grower relations, if the family would get their annual nut bonus. 

That nut bonus had been held up by Wonderful for their friend, Jon Reiter, the ex-CEO of the Assemi agriculture holding company who had left a few months prior to tend to his tiny pistachio estate on 70 acres of old Assemi land. The family was worried Resnick was out to “destroy” them in their cash-strapped state by withholding their bonus as well. 

If Resnick withheld the 2019 crop bonus, it was a $13-15 million hit to the family, according to court filings. “We couldn’t afford that loss,” said James Bennett.

“We’ll pay you what you’re entitled to,” Anzaldo told Kevin in the email. “It’s up to Stewart.”

Craig Cooper, Wonderful’s general counsel, told Kevin that his demand for “adequate assurance” on the crop bonus was “a sham and an obvious subterfuge.”

Cooper gave the Assemis a warning: “Stewart isn’t afraid of battling in the legal front.”

Within days of Kevin’s email, the Assemis held up their 2019 crop, and filed the lawsuit against Resnick in the Fresno County Superior Court, alleging a breach of contract in the last year of the five-year deal. 

Jury’s choice: Resnick’s blunder or Assemi’s ploy?

The Assemis haven’t given their pistachio crop to Resnick since 2019, which Resnick claims in a countersuit violates the 2015 handshake agreement that gave Farid early access to the super trees. 

But the Assemis are trying to convince the jury that Resnick’s handshake deal never existed. The transfer of the trees was a separate business deal with no strings attached, Assemi’s lawyers said. The “definitive proof” is that the contract the family signed for the trees never mentions a 10-year extension between the Assemis and Resnick’s Wonderful. The verbal agreement was only first mentioned by Resnick starting in February 2020, in an email during lawsuit negotiations. 

Starting in 2020, “it was our right under our contract to process our own pistachios,” said James Bennett. “We were free to do what we wanted.”

Resnick’s lawyers, however, say a visionary businessman who built the pistachio industry from the ground up in a matter of a decade would have never sold his prized trees to Assemi without an assurance between friends that when the trees matured in the early 2020s, Assemi’s nuts would be processed by Wonderful. A similar handshake deal was made around the same time, said Resnick, with Leland Parnagian, another Fresno power broker and a friend of Farid.

Resnick’s legal team has laid out a choice for the jury. What’s more likely – that Resnick would make such a catastrophic blunder to his nut empire, or that Farid, a would-be rival, would deny the handshake ever happened?

Instead, Resnick’s lawyers are trying to convince the jury that what explains the collapse of the business partnership – and its ensuing legal cross fire – wasn’t Resnick’s breach of contract, but instead the rise of Farid’s son, Kevin Assemi. 

Kevin “hatched a plot,” Resnick’s lawyer said, to spoil Resnick’s good will. And when the family’s ploy to get a better loan from Resnick floundered, the family had no other plays left. As Resnick’s argument goes, the 2019 hold-up of the pistachio crop was therefore a fait accompli.

Kevin “looked at everything from short-term, cash flow perspective. He thought he could run everything from impersonal analysis,” Resnick’s lawyer said. “The next generation of the Assemis wanted more.”

In Resnick’s words, Kevin was a “naive young man who doesn’t know what he thinks he knows.”

“Farid’s attempt to pass the baton to Kevin ended with some bad results,” Resnick’s lawyers added. “His biggest disaster was convincing his father to build a pistachio processing plant.”

As for Kevin Assemi, he left in 2020. The Assemis never created a blueprint, nor architecture plans, for the pistachio plant. They only did an excavation in April 2019. Resnick’s legal team has put the plant in a morass of lawsuits ever since.

In July 2020, Darius and another Assemi brother, Farshid, were removed from Wonderful’s board of directors.

With super-trees turned against him by an old friend, and the threat of the pistachio plant on the horizon, Resnick told Darius to never cross the king. Now, the Assemi dynasty is on the line. 

“I’m going to fuck you,” Resnick allegedly said, according to an Assemi court-filing. “You’re fucked.”

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Gregory Weaver is a staff writer for Fresnoland who covers the environment, air quality, and development.

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