Adkins v. Cagle Foods Jv, LLC, 04-11447.

• Citation: 411 F.3d 1320
• Decision Date: 30 June 2005
• Docket Number: No. 04-11447.,04-11447.
• Parties: Lucius ADKINS, Jill Adkins, Plaintiffs-Counter-Defendants-Appellants, v. CAGLE FOODS JV, LLC, d.b.a. Cagle-Keystone Foods, Defendant-Counter-Claimant-Appellee, Cagle's, Inc., Cagle's Farms, Inc., Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (11th Circuit)

411 F.3d 1320

Lucius ADKINS, Jill Adkins, Plaintiffs-Counter-Defendants-Appellants, v. CAGLE FOODS JV, LLC, d.b.a. Cagle-Keystone Foods, Defendant-Counter-Claimant-Appellee Cagle's, Inc., Cagle's Farms, Inc., Defendants-Appellees.

No. 04-11447.

United States Court of Appeals, Eleventh Circuit.

June 13, 2005.

As Corrected June 30, 2005.

James G. Lingle, H. Clay Fulcher, Lingle & Fulcher, PLLC, Rogers, AR, Cynthia Noles Johnson, Johnson Law, P.C., Cohutta, GA, for the Adkins.

Howard A. Rosenthal, Gary D. Fry, Malcolm S. Gould, Philadelphia, PA, J. Anderson Davis, C. King Askew, Mark M.J. Webb, Brinson, Askew, Berry, Seigler, Richardson & Davis, LLP, Rome, GA, Dawn G. Benson, Watson, Spence, Lowe & Chambless, Albany, GA, for Defendants.

Appeal from the United States District Court for the Middle District of Georgia.

Before EDMONDSON, Chief Judge, and TJOFLAT and KRAVITCH, Circuit Judges.

KRAVITCH, Circuit Judge:

This case involves an interpretation of the Packers & Stockyards Act, 7 U.S.C. § 192(a) and (b), which prohibits live poultry dealers from "engag [ing] in or us[ing] any unfair, unjustly discriminatory, or deceptive practice or device," or "mak[ing] or giv[ing] any undue or unreasonable preference or advantage to any particular person or locality in any respect, or subject[ing] any particular person or locality to any undue or unreasonable prejudice or disadvantage in any respect". The plaintiffs, Lucius and Jill Adkins, are broiler growers under contract with defendant operators of poultry processing facilities. The Adkins claim that the defendants, Cagle's, Inc. ("Cagle's"), Cagle's Farms, Inc. ("Cagle's Farms"), and Cagle Foods JV, LLC ("Cagle JV"), violated federal agricultural statutes, committed state-law fraud and breach of contract, and are liable under other related causes of action.

I.

The plaintiffs, Lucius and Jill Adkins, had been engaged in farming for several years when they decided, in late 1990 or early 1991, to grow broiler chickens in order to diversify their farm income.¹ Lucius² met with Danny Eiland of Cagle's, who provided estimates of typical costs and expenses encountered in the business, derived from industry averages and actual production data on other farms. The estimates included a disclaimer which provided that the projections were for illustrative purposes only and not intended as a forecast of actual performance. The Adkins independently verified the validity of the estimates and proceeded to construct four chicken houses in 1991. The estimates proved reasonably accurate and the operation performed well. The Adkins constructed two additional houses in 1994, and four more houses on a new farm in 1995. On each occasion, the Adkins obtained additional estimates from Cagle JV, which by that time was the only one of the defendant entities conducting business with the Adkins.³

By the time of the 1994 house construction, Cagle JV had responded to market pressures by providing its broiler growers with larger birds, which resulted in a reduction in the number of flocks per year from the 1991 estimated figures. Lucius admitted in a deposition that the Adkins did not suffer any damages as a result of the change, and that Cagle JV's actions in making the change were not fraudulent. Furthermore, Lucius believed the new estimates he received before the 1995 construction to be accurate and reasonable.

The relationship between Cagle JV⁴ and its growers was memorialized in a series of Broiler Production Agreements, which set forth the obligations of Cagle JV to provide the birds, feed, and medications, and to weigh the birds promptly upon harvest. The agreement also set out the pay schedule for the duration of the contract. No contract ever specified the specific number of birds to be placed in each house or the number of flocks per year. All the contracts contained merger clauses.

In 1996, in response to requests from its largest customer, Cagle JV began placing an even larger bird with its growers. In order to preserve the health of the bird, and for other reasons, Cagle JV decreased the number of birds placed in each house. The Adkins made no complaints at the time. The increase in bird size made up for the lower number of birds. Furthermore, Cagle JV's payment per pound increased from 3.95 cents to 4.8 cents between 1997 and 2004.

In May 1996, the Grain Inspection, Packers and Stockyard Administration (GIPSA) found that up until 1995, Cagle JV had used different tractors to take the loaded weight and the tare weight of chicken trailers. Cagle JV therefore recalculated its prior payments to correct for the discrepancy. Cagle JV reimbursed the Adkins and other farmers who had been underpaid, but did not request refunds from farmers who had been overpaid.

Lucius Adkins joined the United Poultry Growers' Association ("UPGA") in 1997, and became the UPGA president in November 1998. At about the same time that Lucius became involved in the UPGA, the Adkins allege that Cagle JV began sending them poor quality birds to raise on their farms. The Adkins also claim that Cagle JV sometimes sent them poor quality feed for the birds or failed to send sufficient feed. Lucius asserts that employees of Cagle JV repeatedly threatened that he should do as the company told him or the company would "break" him. The Adkins claim that these threats were meant to discourage participation in the UPGA.

In May 1999, Cagle JV presented all its growers a new contract which provided for higher payments in exchange for an agreement to arbitrate disputes arising under the contract. The Adkins rejected this proposal and continued to do business under the old contract.⁵

In June 2001, the Adkins filed the present action in the Middle District of Georgia against Cagle JV, Cagle's, and Cagle's Farms. The complaint brought claims for (1) violation of the Packers and Stockyards Act ("PSA"), (2) fraud, (3) violation of the Georgia RICO statute, (4) fraudulent inducement and promissory estoppel, (5) violation of the Agricultural Fair Practices Act ("AFPA"), and (6) breach of contract. In response, Cagle's, Inc., and Cagle's Farms, Inc. filed a motion for summary judgment arguing, inter alia, that they had not had dealings with the Adkins since 1993 and that the Adkins' claims were therefore time-barred. The district court granted the motion. Cagle JV filed a motion for summary judgment on the merits of the Adkins' claims. The district court granted Cagle JV's motion as well. The Adkins appeal both rulings.

II.

A. Standard of Review

We review the district court's grant of a motion for summary judgment de novo. Hinson v. Clinch County, Georgia Board of Education, 231 F.3d 821, 826 (11th Cir.2000). The moving party bears the initial burden of showing that there is an absence of a genuine issue of material fact and that it is therefore entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). If the moving party meets this burden, the non-moving party must show the existence of a genuine issue of material fact that remains to be resolved at trial. Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1115 (11th Cir.1993). The non-moving party must set forth specific facts showing that there is a genuine issue for trial, not merely make a summary denial of the movant's allegations. Fed.R.Civ.P. 56(e).

B. The Adkins' Claims Against Cagle Foods JV

1. Packers and Stockyards Act Claim

The PSA prohibits live poultry dealers from "engag[ing] in or us[ing] any unfair, unjustly discriminatory, or deceptive practice or device," or "mak[ing] or giv[ing] any undue or unreasonable preference or advantage to any particular person or locality in any respect, or subject[ing] any particular person or locality to any undue or unreasonable prejudice or disadvantage in any respect". 7 U.S.C. § 192(a) and (b). The Adkins have alleged that Cagle JV violated this statute when it (1) provided them with inferior birds, (2) provided them with inferior or insufficient feed, (3) improperly weighed birds they had raised, and (4) offered them an unfair arbitration contract.⁶

There is no evidence that the Adkins received a substantial number of inferior birds, much less that Cagle JV intended to provide them with poor quality birds. The Adkins did demonstrate that Cagle JV could choose to send buses of chicks to different farms once they were loaded, but this falls far short of a showing that Cagle JV discriminated against the Adkins by sending them inferior birds. Uncontroverted evidence states that flocks were only sent to a different farm when the original destination farm was not yet ready to receive them. Chick quality is also a complex matter which cannot be determined at a glance, meaning that it would be difficult to judge the quality of a flock when loaded onto a bus for transport. Nothing in the record suggests that Cagle JV ever delivered poor quality chicks to the Adkins or any other broiler growers with any discriminatory purpose.

Nor have the Adkins produced evidence of specific instances where Cagle JV gave them insufficient or inferior feed. The evidence did suggest that some of Cagle JV's broiler farms would run out of feed from time to time while others received too much. But the Adkins did nothing to show that they were ever specifically targeted for insufficient or inferior feed.

The Adkins have also failed to establish any illegal weighing practices. In the earlier years of the Camilla plant's operation, there were discrepancies in the weighing process that might affect the live weight. Cagle JV made reimbursement payments to cover all misweighings prior to 1995, and the Adkins cannot identify any instances where Cagle JV misweighed their birds after 1995.

Beginning in 1999, Cagle JV offered broiler growers a new form of Broiler Production Agreement which contained an arbitration clause. The Adkins allege that these arbitration contracts were unfair....