City of Clinton, Ark. v. Pilgrim's Pride Corp.

• Decision Date: 15 September 2009
• Docket Number: Civil No. 4:09-CV-387-Y.,Civil No. 4:09-CV-386-Y.
• Parties: CITY OF CLINTON, ARKANSAS v. PILGRIM'S PRIDE CORPORATION.
• Court: U.S. District Court — Northern District of Texas

Page 669

653 F.Supp.2d 669

CITY OF CLINTON, ARKANSAS v. PILGRIM'S PRIDE CORPORATION.

Civil No. 4:09-CV-386-Y.

Civil No. 4:09-CV-387-Y.

United States District Court, N.D. Texas, Fort Worth Division.

September 15, 2009.

Mark C. Brodeur, Brodeur Law Firm, Christopher J. Moser, Quilling Selander Cummiskey & Lownds, I. Richard Levy, Law Office of I. Richard Levy, Dallas, TX, for Plaintiff.

Clayton E. Bailey, Exander M. Brauer, David William Parham, Baker & McKenzie LLP, Dallas, TX, for Defendant.

ORDER GRANTING MOTION TO DISMISS

TERRY R. MEANS, District Judge.

Pending before the Court is the Motion to Dismiss (doc. #20) filed by defendant Pilgrim's Pride Corporation ("Pilgrim's"). After review, the Court concludes that plaintiff City of Clinton, Arkansas ("the City"), does not have standing to pursue claims under § 192(a), (b), and (e) of the Packers & Stockyards Act, 7 U.S.C. § 181, et seq ("PSA"). The Court further concludes that the City's complaint fails to state a claim for promissory estoppel or fraud. Consequently, Pilgrim's motion to dismiss will be granted.

I. Background

Pilgrim's, one of the world's largest growers and processors of chicken, is also the successor in interest to Con Agra Foods, which was a competing poultry producer. Con Agra owned and operated facilities for growing and processing poultry in the City. Pilgrim's acquired these facilities as part of its purchase of Con Agra's operations and assets.

According to the City, beginning in 1985, Con Agra represented that if the City would make certain capital expenditures and expand certain of its facilities, Con Agra would continue to operate its facilities in the City and provide employment to local residents. Pilgrim's has allegedly made similar representations, and has threatened that unless the City expanded its water and waste-water facilities it would cease its operations there.

In October of 2008, Pilgrim's announced that it was "idling," or closing, at least temporarily, its facility in the City. According to the City, Pilgrim's did so in an effort to manipulate the price of chicken upward by reducing supply. The City contends that this is in violation of the PSA, and that it suffered injury in the form of lost employment with related negative effects on the local economy. The City further insists that Pilgrim's representations that it would continue its operations in the City in exchange for the expansion of city facilities to support such operations were fraudulent and should be enforced through promissory estoppel.

II. Discussion

A. Standard for Dismissal Under Rule 12(b)(6)

Federal Rule of Civil Procedure 12(b)(6) authorizes the dismissal of a complaint that fails "to state a claim upon which relief can be granted." This rule must, however, be interpreted in conjunction with Rule 8(a), which sets forth the requirements for pleading a claim for relief in federal court. Rule 8(a) calls for "a short and plain statement of the claim showing that the pleader is entitled to relief." FED. R. CIV. P. 8(a); see also Swierkiewicz v. Sorema N.A., 534 U.S. 506, 508, 122 S.Ct. 992, 152 L.Ed.2d 1 (2002) (holding Rule 8(a)'s simplified pleading standard applies to most civil actions). As a result, "[a] motion to dismiss for failure to state a claim is viewed with disfavor and is rarely granted." Kaiser Aluminum & Chem. Sales v. Avondale Shipyards, Inc., 677 F.2d 1045, 1050 (5th Cir.1982) (quoting 5A WRIGHT & MILLER, FEDERAL PRACTICE AND PROCEDURE § 1357 (1969)). The Court must accept as true all well-pleaded, non-conclusory allegations in the complaint and liberally construe the complaint in favor of the plaintiff. Kaiser Aluminum, 677 F.2d at 1050. The Court must also "limit [its] inquiry to the facts stated in the complaint and the documents either attached to or incorporated in the complaint." Lovelace v. Software Spectrum, Inc., 78 F.3d 1015, 1017-18 (5th Cir.1996)

The plaintiff must, however, plead specific facts, not mere conclusory allegations, to avoid dismissal. Guidry v. Bank of LaPlace, 954 F.2d 278, 281 (5th Cir.1992). Indeed, the plaintiff must plead "enough facts to state a claim to relief that is plausible on its face," and his "factual allegations must be enough to raise a right to relief above the speculative level, ... on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007).

B. Claims Under the PSA

The PSA creates a private cause of action for violations of its provisions. Specifically, § 209 provides:

"If any person subject to this Act violates any of the provisions of this Act, or of any order of the Secretary under this Act, relating to the purchase, sale, or handling of livestock, the purchase or sale of poultry, or relating to any poultry growing arrangement or swine production contract, he shall be liable to the person or persons injured thereby for the full amount of damages sustained in consequence of such violation."

7 U.S.C. § 209(a). According to the City, it is a person that has been injured by violations of the PSA committed by Pilgrim's and, therefore, may bring suit against Pilgrim's under the PSA.

Pilgrim's argues that the City does not qualify as a person within the meaning of the PSA. Under § 182, "[t]he term `person' includes individuals, partnerships, corporations, and associations." 7 U.S.C. § 182(1). Pilgrim's points out that, in its complaint, the City characterizes itself as a "municipality" and a "locality," as opposed to any of the entities listed in § 182(1).

The City counters that it is a municipal corporation, chartered under the laws of the State of Arkansas. But, as noted by Pilgrim's, this fact is not pleaded in the City's complaint. And although the City offers to submit documentation of its charter, the Court's inquiry is limited to the facts pleaded in the complaint and documents attached to or incorporated in the complaint. Lovelace v. Software Spectrum, Inc., 78 F.3d 1015, 1017-18 (5th Cir.1996).

Even assuming that the Court could take notice of or consider the City's municipal-corporation form, the City does not qualify as a person within the meaning of the PSA. An issue of statutory construction is a question of law for the Court to decide. Chandris, Inc. v. Latsis, 515 U.S. 347, 369, 115 S.Ct. 2172, 132 L.Ed.2d 314 (1995). Of course, "in any case of statutory construction, [the] analysis begins with the language of the statute." Hughes Aircraft Co. v. Jacobson, 525 U.S. 432, 438, 119 S.Ct. 755, 142 L.Ed.2d 881 (1999); see also Engine Mfrs. Assn. v. South Coast Air Quality Management Dist., 541 U.S. 246, 252, 124 S.Ct. 1756, 158 L.Ed.2d 529 (2004) ("Statutory construction must begin with the language employed by Congress and the assumption that the ordinary meaning of that language accurately expresses the legislative purpose") (internal quotation marks omitted). When a statute specifically defines a term, a court is bound to apply that definition. See Stenberg v. Carhart, 530 U.S. 914, 942, 120 S.Ct. 2597, 147 L.Ed.2d 743 (2000). But when a term is not defined, it is given its ordinary meaning. See Watson v. United States, 552 U.S. 74, 128 S.Ct. 579, 583, 169 L.Ed.2d 472 (2007) ("With no statutory definition ... the meaning of [a term] has to turn on the language as we normally speak it ....") (citations omitted). And where the terms of the statute are unambiguous, the "judicial inquiry is complete." Rubin v. United States, 449 U.S. 424, 430, 101 S.Ct. 698, 66 L.Ed.2d 633 (1981).

There is a significant amount of case law addressing the issue of whether a municipal corporation is a person under statutes defining "person" as including corporations. See 62 C.J.S. Municipal Corporations § 5 (2009). Surprisingly, neither party addresses this case law. Nevertheless, many cases conclude that, in ordinary usage, the term "corporation" does not refer to a municipality. See Wilcox v. City of Idaho Falls, 23 F.Supp. 626, 629 (D.Idaho 1938) ("Ordinarily the word `corporations' does not include `municipal' corporations unless such construction is made imperative from the context of the statute."); State v. Central Power & Light Co., 139 Tex. 51, 161 S.W.2d 766 (1942) ("[A]s a general rule the word `corporation' is construed to apply only to private corporations and does not include municipal corporations, unless the statute expressly so provides."); City of Webster Groves v. Smith, 340 Mo. 798, 102 S.W.2d 618, 618 (1937) (noting that "[i]n common parlance, towns, cities and other municipal organizations are not known as corporations") (quoting Lineham v. City of Cambridge, 109 Mass. 212, 213 (Mass. 1872)); Donahue v. City of Newburyport, 211 Mass. 561, 98 N.E. 1081, 1082 (Mass. 1912) ("[I]n common speech it is rarely that a city or town is referred to merely as a corporation.").

Some cases conclude that a municipal corporation is a corporation and, therefore, a person within the meaning of various statutes. See City of Lincoln, Neb. v. Ricketts, 297 U.S. 373, 374-75, 56 S.Ct. 507, 80 L.Ed. 724 (1936) (bankruptcy code definition of "person," which includes corporations, held to include municipal corporations); City of Virginia Beach v. Flippen, 251 Va. 358, 467 S.E.2d 471, 473-74 (1996); City of Little Falls v. State, 198 A.D. 488, 489-492, 190 N.Y.S. 807 (N.Y.App.Div.1921) (concluding municipal corporation is person under New York's Canal Law, which defined person to include corporations). But these cases rely on the "dual identity" of a municipal corporation—that a municipal corporation is both a political body and a corporate body—in concluding that a municipal corporation should be treated as a person when performing private functions. See City of Virginia Beach, 467 S.E.2d at 473-74. Such dual treatment of government entities and distinctions between governmental and proprietary functions of a government entity has been done away with in the...