A federal court judge has tossed Delta Produce LP's $100 million lawsuit alleging H-E-B is to blame for the company's demise.

Delta, however, isn't giving up on its quest to hold H-E-B financially responsible for its downfall after more than 30 years in business. The one-time produce supplier last month filed a notice that it will appeal the ruling.

“H-E-B is confident that if Delta Produce pursues an appeal, the (U.S.) District Court's ruling will be affirmed,” H-E-B spokeswoman Dya Campos said in an email.

Delta closed its doors early last year, entered bankruptcy and filed its lawsuit claiming that for decades H-E-B prevented it from selling tomatoes, avocadoes and other produce to the grocer's competitors.

Delta alleged the restriction created financial problems when H-E-B increased its produce purchases from other sellers and reduced its orders from Delta.

H-E-B ultimately lifted the sales restriction in 2008, according to Delta. But Delta claimed it was unable to find new customers.

In its complaint, Delta alleged the prohibition from selling to H-E-B's competitors was a violation of the Sherman Act, a federal law prohibiting anticompetitive business practices.

H-E-B filed a motion to dismiss the lawsuit. For the purposes of the motion, under federal court rules, Senior U.S. District Court Judge Harry Lee Hudspeth had to assume Delta's allegations were true.

“Taking Delta's allegations as true, the court finds it has antitrust standing” on the claim that it was restricted from selling to other grocers, Hudspeth said in his January order.

“H-E-B's restriction on trade caused Delta to lose business and ultimately fail, which is the very injury that the Sherman Act intended to prevent,” Hudspeth added.

However, Hudspeth dismissed the claim because Delta essentially waited too long to bring the lawsuit.

A four-year statute of limitations governs actions to enforce the Sherman Act, Hudspeth wrote. Delta alleged

H-E-B first imposed the sales restriction in 1988 and then again in 2002 — in both instances, long before the company filed suit.

Delta argued there were exceptions to the statute of limitations, including that it could not determine the extent of its damages until the business failed and it filed for bankruptcy. But Hudspeth wasn't swayed.

“While the amount of damages may have been speculative, the injury itself, assuming Delta's allegations are true, was not,” Hudspeth wrote.

Randall Pulman, a lawyer for Delta, said

H-E-B representatives never denied the allegation that it imposed the sales restriction on Delta.

“So we feel pretty good about the fact that, yeah, there was a Sherman Act violation here,” Pulman said. “It's unfortunate that (Delta principal)

Mr. (Scott) Jensen was between a rock and hard place. It was either sue them and go out of business, or go out of business and sue them.” Pulman is with the firm Pulman, Cappuccio, Pullen & Benson LLP.

Delta and a sister company employed about 225 people before shutting down. Delta operated from an 118,000-square-foot refrigerated facility at 2001 S. Laredo St.

Surlean Foods, a custom food service manufacturer, recently disclosed that it would relocate its corporate headquarters to the former Delta facility and add up to 65 jobs.

pdanner@express-news.net