Unlicensed "Food Co-Operative"
Battling Government Authorities

Stephen Barrett, M.D.

John and Jacqueline Stowers, who operate Manna Storehouse in LaGrange, Ohio, have asked their county court to stop the county health department and state agriculture department from regulating their business [1]. Manna Storehouse describes itself as an "organic and natural foods cooperative" that sells a variety of food and grocery items. The Stowers claim that the co-op is a "members only" operation, not a retail establishment, that is exempt from licensing laws.

Manna Storehouse began operating in the mid-1990s as a small ordering group called the Stowers Co-op and assumed its current name in 2004. Eventually it expanded from three families to over 60 regular customers and began ordering on a weekly basis, splitting cases for customers and selling the leftover items at retail. Since 2004, when it adopted its current name, it has been operating as a food cooperative and retail shopping area [2], but it also solicited orders through the Internet. The current Web site states that membership dues are $10 to join and $5 per year for renewal. To join, prospective members must submit an application and be interviewed. They must also agree not to discuss the co-op with any government agency, testify against the company, or sue the company for any reason:

NON DISCLOSURE AGREEMENT. Members agree that by joining Manna Storehouse you state that you are not an undercover employee of any federal, state or local government agency. Any transaction, communication or observations by you and/or anyone with you cannot be reported or communicated in any way to any federal, state or local government agency; nor used in a court of law against Manna Storehouse or any member of the Stowers family. 

LIABILITY WAIVER. Members voluntarily release, forever discharge, and agree to indemnify and hold harmless Manna Storehouse and any individual of the Stowers family including any property in connection with Manna Storehouse and any individual of the Stowers family from any and all claims for any damages to member, members persons, or members property. Members agree to indemnify and hold harmless Manna Storehouse and any member of the Stowers family including any property in connection with Manna Storehouse and any member of the Stowers family from any responsibility from any transactions or spoken words, suggestions or assistance in any way regarding nutrition, health and healing [3].

Members acknowledge that they are completely responsible for any damages to anyone, including but not limited to children, friends, family acquaintances or individuals brought by the member. Members understand they have waived their right to maintain a lawsuit against Manna Storehouse and any individual of the Stowers family including any property in connection with Manna Storehouse and any individual of the Stowers family [3].

It is not clear whether these provisions were part of the membership agreement before the trouble began or were added afterward,

Documents in the case indicate that in 2007, the Lorain County Health Department investigator tried to inspect the premises but was refused. Mrs. Stower subsequently sent a letter stating that the co-op was not a retail food establishment and that the would take legal action if another unannounced inspection was attempted [4]. In 2008, after being asked to help, the Ohio Department of Agriculture (ODA) conducted an undercover investigation in which an agent visited the store, completed a membership application, paid a $5 membership fee, and purchased some eggs. After determining that the company was operating an unlicensed retail food establishment (a misdemeanor criminal offense), the officials obtained a search warrant [5]. On December 1, 2008, the search was carried out and records and computers were seized.

About two weeks later, the Stowers filed suit, claiming that the search was improperly conducted and that their business should be exempt from regulation [1]. The original defendants were the Lorain County Health District, Ohio Department of Agriculture, and Ohio Attorney General. After the case was transferred to federal court, the Attorney General was dropped as a defendant. An attorney for the Stowers has stated that Manna Storehouse should be exempt from regulation because it merely places bulk orders that are shared among its members. Ohio law defines "retail food establishment" as "a premises or part of a premises where food is stored, processed, prepared, manufactured, or otherwise held or handled for retail sale" [6]; and those that sell perishable products must be registered and/or licensed [7].

In February 2010, the Lorain County Court of Common Pleas dismissed the Stowers' lawsuit against the state and county. The judge ruled that the Storehouse not only sold food retail, but marked it up to make a profit and is subject to the same regulation as any store. The judge also ordered the seized food to be returned as long as it is not sold. After the ruling, a county official said the county will take no further action unless it hears about sales continuing at the farm. The Stowers have filed a notice of appeal [8].

References

  1. Complaint for declaratory and injunctive relief. Stowers et al. vs Ohio Department of Agriculture et al. Lorraine County Court of Common Pleas, Case No. 08CV159968. Filed December 17, 2008.
  2. About us. Manna Storehouse Web site, archived Dec 27, 2005.
  3. Rules, regulations & policies. Manna Storehouse Web site, accessed May 2, 2009.
  4. Stowers J. Letter to Dorothy D. Kloos, Dec 10, 2007.
  5. Affidavit and search warrant, Nov 26, 2008.
  6. § 3717.01. Definitions.
  7. Ohio Title 37, §3717.22. Exclusions and exemptions.
  8. O'Donnell P. Manna Storehouse in Lorain County still battles over food license, inspection after judge tosses lawsuit. Metro -cleveland.com, March 13, 2010.

This article was revised on May 26, 2010.