Duarte Nursery Sold Pistachio Growers Thousands of Defective Trees. A Judge Ruled Its Fine Print Couldn’t Limit What It Owed.

A pistachio orchard is a long bet. One grower’s damages model in this case assumed a small first harvest in an orchard’s sixth year and a much bigger one in its seventh, with yields still climbing after that. University of California economists model a pistachio orchard’s life at 40 years. Much of that bet rides on the rootstock, the root system onto which the nut-bearing variety is grafted. If the rootstock fails, the grower loses the trees and the years spent waiting for them.

What went wrong

For years, Duarte Nursery sold one of the most sought-after rootstocks in California: cloned UCB-1, which growers regarded as the “gold standard,” the court noted. Many of the trees it delivered between 2011 and 2014 turned out to be defective “off-types,” a problem that became known as pistachio bushy top syndrome. According to the court, the affected trees had poor root systems, gnarled trunks, and bushy tops, and produced far fewer nuts than healthy trees of the same age. Some trunks snapped when shaken at harvest; wind knocked some trees down. For growers, the defects showed up only after planting. The nursery stopped selling the rootstock in June 2014.

The lawsuits

Growers began suing in 2015. Their cases were combined as J. Marchini & Son Inc. v. Duarte Nursery Inc. in Stanislaus County Superior Court, and by 2022, 18 growers and farming companies were plaintiffs. The 2022 ruling cites at least $8.8 million in grower losses. The largest single buyer had ordered 409,500 trees.

The first suit, filed in January 2015 by J. Marchini & Son, a Merced County farming company, named John Duarte personally as a defendant. Marchini’s amended complaint accused him and the nursery’s sales manager of fraud and sought punitive damages. It alleged that at a June 2014 meeting, John Duarte said he had known about the problems since September 2013, and that the two men had in fact known since March 2012, when another grower reported problems.

Another suit, filed in Kern County in February 2015, grew to 11 growers who farmed about 1,600 acres of pistachios in Kern, Fresno, Kings, and Madera counties. Their complaint says they paid Duarte more than $1 million for trees ordered between 2010 and 2013. It alleges that the nursery multiplied the rootstock by cloning, a method the complaint calls “untested and experimental” for the variety, while other nurseries grew it from seed. It also alleges that when Duarte took their orders, it had already heard that trees delivered to other growers were showing “unusual symptoms,” which it “dismissed as being related to weather conditions or post-delivery factors” and did not tell them about. (The complaint blames a bacterium; the 2022 court decision traced the problem to a genetic mutation at the nursery.) In early 2015, the complaint says, the growers canceled their orders for trees not yet delivered and asked for their deposits back, and the nursery refused.

In a September 2020 settlement brief, the lawyer for four of the Kern County growers wrote that the nursery had begun hearing from growers in 2011 or 2012 that trees on its rootstock “were not performing,” and that by 2013 or 2014, “according to John Duarte,” the number of irregular trees was “exceptionally high.” Those four growers put their damages, including lost profits, at about $5.9 million.

The fine print

Each grower in the case had signed Duarte’s standard contract. Paragraph 14 on its back disclaims any implied warranty that the trees are fit for their purpose and caps any recovery at the purchase price. Under that clause, a grower who lost an entire orchard could recover no more than the price of the trees. The growers argued that it left them with “illusory and nonexistent remedies.” A 2019 mediation failed, and the first phase of trial was devoted to whether the clause could be enforced.

The ruling

Judge John Freeland heard that phase without a jury in August and September 2021. In a Statement of Decision filed March 28, 2022, he ruled that the warranty disclaimer and the damages limit were both “unconscionable and, therefore, unenforceable.” He found that the defects were hidden until after planting, and widespread: “This was not a case of a handful or even hundreds of trees failing; it was in the thousands for each plaintiff.” It was not commercially reasonable, he wrote, “for farmers to have to shoulder the entire burden of such a large loss when the cause was completely in the hands of DNI.” According to the decision, one grower that pulled out all its Duarte trees spent more than $2.85 million to replace and replant, and another lost its entire $4 million investment in 409,500 trees.

Among the facts the judge relied on: John Duarte acknowledged that the genetic mutation occurred at the nursery; the nursery knew about the defective off-types, which it called “Chinos,” in 2013 and set up a culling process to try to sort them out; and, citing testimony from the nursery’s own expert witness, “Defective trees were knowingly delivered to growers.” The decision also describes what happened when growers asked for their money back, which we cover in a separate story. It did not decide the fraud claim or how much the nursery owed; those questions were left for later phases.

How it ended

The case went on for three more years. In a 2024 brief, growers’ lawyers quoted John Duarte’s 2019 deposition: “I was embarrassed that we shipped as many off-type under-performing trees as we had.” In October 2024, the judge held a supplemental trial on the warranty disclaimer for one group of growers. Testimony showed that more than 90% of the nursery’s trees in two of that group’s plantings failed; a new orchard typically loses less than 1%. In a December 2024 tentative decision, the judge again found the disclaimer unconscionable, writing that “John Duarte made it clear that he would not negotiate the waiver of implied warranties in the DNI form contract.” The same clause was at the center of Duarte Nursery’s defense in a 2025 lawsuit by a lemon grower.

That group of pistachio growers settled in January 2025. According to its later court filing, Duarte Nursery agreed to pay it $700,000, backed by a security agreement, within 30 days after both sides signed a final agreement. As of June 2025, the growers said, the nursery had not signed it, and no money had been paid. Duarte’s lawyers responded that the growers’ account contained “misrepresentations” and that the delay stemmed from the growers’ draft security agreement, which they said sought an interest in property the nursery did not own. They also wrote that the security agreement was “of no value to plaintiffs” because it was “subordinate to the secured interests of at least one third party.” The court records we reviewed do not show whether the payment was made. Other growers, including the Kern County group, dismissed their claims with prejudice in March, April, and November 2025, meaning they cannot be refiled. Those filings do not say whether the growers were paid.

Alexandra Duarte, a Republican, is running for California State Senate District 4 on the Nov. 3, 2026 ballot. She is married to former Rep. John Duarte, who has served as the nursery’s president.