Judge denies California town's request to halt hot sauce production

By Dana Feldman

LOS ANGELES (Reuters) - A Los Angeles suburb that sued to curb the strong, spicy odor emitted from a chili-processing plant lost its initial bid for a court injunction against the makers of the popular Sriracha-brand hot pepper sauce on Thursday.

Los Angeles Superior Court Judge Robert O'Brien denied a motion from the small city of Irwindale for a temporary restraining order against Huy Fong Foods, calling the request "rather edgy."

"You're asking for a very radical order on a 24-hour notice," O'Brien said during the brief proceedings.

The judge instead set a court hearing for November 12 to consider further arguments on whether there were grounds to issue a preliminary injunction against the chili factory while the court reviews the merits of a lawsuit brought against the company.

Irwindale, east of Los Angeles, filed suit on Monday saying the company has refused to take sufficient action to abate noxious fumes emanating from the plant strong enough to cause eye and throat irritation in nearby residents.

The suit says some residents have complained of headaches and others have been forced to remain indoors, or even to temporarily flee their own homes, to get relief from the smell of locally grown jalapeno chili peppers being crushed at the plant.

John Tate, an attorney for the company, said in court that the company has installed a filtration system to take care of excessive odor. He acknowledged that it does not resolve the problem completely but had "certainly improved the situation."

"The company purchased additional filters and installation was complete Tuesday," he said, adding that more time was needed to see how well the new system works before the end of chili-harvesting season in November, when production would be halted in any case until next year.

"If you shut us down now, we won't know if the system works and we'll be in the dark for nine months," he said.

According to the Los Angeles Times, Huy Fong Foods produces up to 200,000 bottles of hot sauce a day and sold more than $60 million worth last year.

The red-colored Sriracha Hot Chili Sauce, sold in clear squeezable plastic bottles with a green cap and trademark rooster logo, has become one of the top-selling condiments in the United States.

Celebrated in Bon Appetit magazine as the ingredient of the year for 2010, Sriracha, pronounced (sir-RAH-chah), has inspired cookbooks, a food festival and a movie documentary.

The company was founded 33 years ago by David Tran, an ethnic Chinese immigrant from Vietnam, who was quoted in the Los Angeles Times earlier this week as defending the pungent nature of the chilies used in his sauce.

"If it doesn't smell, we can't sell," he said.

(Writing by Alex Dobuzinskis; Editing by Steve Gorman and Mohammad Zargham)

BusinessLos Angeles Superior CourtHuy Fong FoodsLos Angeles

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Boom in energy production sends US shipyards into overdrive

The Great American Energy Boom is having a major ripple effect on the shipbuilding industry, which thanks to a 1920s maritime law, is busier than it has been in decades.

Some ten supertankers are currently under construction at U.S. shipyards, with orders for another 15 in the pipeline. That may not seem like a huge number, but considering there are only about 75 such tankers plying American ports now, it represents a genuine boat-building boom.

“We haven’t seen something like this since the 1970s,” Matthew Paxton, president of the Shipbuilders Council of America said to FoxNews.com. “The movement of more oil has built up a real commercial shipbuilding renaissance.”

“We haven’t seen something like this since the 1970s.”

- Matthew Paxton, president of the Shipbuilders Council of America

The renaissance comes despite an economy that continues to struggle. It's because of a specific sector of the U.S. economy that is also booming: natural gas production. The fuel must be transported, even within the country, either by rail, pipeline or ship. And if it is by ship, the ship must be American-made and American-manned, according to the 1920s Merchant Marine Act, also known as the Jones Act.

Paxton said that it is projected that up to 3.3 million barrels will be shipped out daily from the Gulf Coast by 2020, destined for ports along the east and west coasts, causing huge demand for tanker ships.

“It could be higher as more and more tankers are built,” he said.

With record amounts of gas and oil being extracted from shale by the process of fracking, the U.S. has seen an energy boom in recent years that has proponents calling it the Saudi Arabia of natural gas. Much of the fuel is being exported, but most is staying here, being distributed around the nation for domestic use.

The Aker Philadelphia Shipyard recently announced that it invested a total of $115 million to construct four tanks and plans to build eight in total.

“The shale revolution is creating industrial opportunities throughout the United States and specifically here in Philadelphia,” Kristian Rokke, President & CEO of AKPS, said in a recent statement. “This strategic opportunity allows us to capitalize on the increased demand for Jones Act tankers in a way that will transform APSI in the years ahead.”

Constructing one tanker, which could be more than 600 feet long and nearly 200 feet wide, can cost upwards of $100 million. Once they are up and running, the ships more than earn their keep. Transport companies pay up to $100,000 per day over a five-year contract to lease them.

Currently, the shipping industry contributes $36 billion to the economy.

“We need another shipyard or two,” said Bob Flynn, president of shipbroker MJLF & Associates in Stamford, Conn., at the recent TradeWinds Jones Act Shipping Forum in New York.

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