FRESNO, Calif. - They grew their fortune in the California sun, turning pedestrian fruits and nuts into a vast and varied empire that secured their place in Hollywood.
Stewart and Lynda Resnick's flashy bottles of Fiji Water and POM Wonderful are now coveted across the globe. Their donations keep the lights on in art museums across the country. And Gov. Arnold Schwarzenegger and Arianna Huffington count them among their dearest friends.
But as their marketshare rises worldwide, one of the billionaires' competitors is fighting back, accusing the Western power couple of profiting at the public's expense, court records and interviews show.
Now, as drought-stricken California weighs whether to give private companies more control in managing its scarce water supplies, a new lawsuit claiming the Resnicks violated utilities law by making money from a vast, taxpayer-funded underground reservoir is causing a stir in the state Capitol.
"Water is a public resource, owned by the people," said Democratic Assemblyman Jared Huffman of San Rafael. "We shouldn't be giving away public funds to private sector interests, let alone choosing winners and losers in the business world."
The Resnicks, who live in a Beverly Hills mansion and have a second home in Aspen, Colo., are among the nation's largest corporate farmers and are generous philanthropists and political donors, giving $536,000 to Democratic and Republican California governors in the last decade.
The Los Angeles Business Journal estimates the couple's empire is worth $1.5 billion. It includes about 120,000 acres in California's Central Valley - where they say they own more fresh citrus, almond and pistachio trees than anyone else in the country - and a facility akin to the Fort Knox of water.
That kind of success, Lynda Resnick said in a telephone interview, can inspire jealousy, and likely motivated this most recent "nuisance" lawsuit. Her husband declined to be interviewed.
After growing up working class in Highland Park, N.J., Stewart Resnick started a business waxing floors while in law school at the University of California, Los Angeles. The couple bought farmland in the 1980s as a hedge against inflation, gaining access to water contracts attached to those parcels.
As drought has hammered the region, leading farmers to abandon their dry fields, the Resnicks' 48 percent stake in the Kern Water Bank, an underground pool that stores billions of gallons of freshwater, has become increasingly valuable.
Court records show that in early 2007, the Resnicks' companies' combined water holdings reached 755,868 acre feet - more than twice the size of San Francisco's Hetch Hetchy reservoir. In 2007, that volume would have qualified as California's 11th largest reservoir, but the firms' water holdings have diminished significantly since, company officials said.
That cache provided enough to nourish the Resnicks' orchards, but it also offered another benefit. From 2000 to 2007, records show the state paid the Resnicks an additional $30.6 million for water previously stored there as part of a program to protect fish native to the ecologically fragile Sacramento-San Joaquin Delta.
Lynda Resnick's marketing savvy helped build cachet around her otherwise obscure brands, such as POM Wonderful pomegranate juice, Cuties mandarins and Teleflora floral bouquets.
Revered among advertisers as the "Pom Queen," she has hired medical scientists to bear out health claims that their fruits and nuts help fight disease and extend life expectancy. Last year, following a nationwide recall of pistachios over salmonella fears, she hired Levi Johnston, the teen father of Sarah Palin's grandson, to promote the snack nuts. The domestic business grew by 40 percent over the last crop year.
"We've done more for the pistachio than anyone ever since it was planted in the Garden of Eden," she said in the phone interview. "My husband should be canonized for all the work he's done."
Others in agribusiness see it differently.
Ali Amin, a Persian immigrant who owns a competing processing plant, filed a lawsuit in late March in Fresno County Superior Court claiming the Resnicks violated California public utilities laws because they turned a profit by selling water to farmers who weren't members of their Bakersfield-based water company, Westside Mutual Water Co.
"You feel like David fighting Goliath," Amin said. "If they're allowed to keep doing this, the rest of the independents and small growers won't be able to compete."
Amin's lawsuit alleges he lost $22 million in revenue when growers lured by water supplies sold their nuts to the Resnicks' plant, which processes almost two-thirds of the nation's pistachios. Amin controls about 5 percent of the market.
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