In re Roxford Foods Litigation

• Decision Date: 07 October 1991
• Docket Number: CV-F-91-009 REC and CV-F-91-010 REC.,No. CV-F-89-846 REC,CV-F-89-846 REC
• Citation: 790 F. Supp. 987
• Court: U.S. District Court — Eastern District of California
• Parties: In re ROXFORD FOODS LITIGATION.

790 F. Supp. 987

In re ROXFORD FOODS LITIGATION.

Nos. CV-F-89-846 REC, CV-F-91-009 REC and CV-F-91-010 REC.

United States District Court, E.D. California.

October 7, 1991.

Malcolm Leader-Picone, Sheppard, Mullin, Richter & Hampton, San Francisco, Cal., for Purina.

D. Gregory Durbin, McCormick, Barstow, Sheppard, Wayte & Carruth, Fresno, Cal., for Poultry Transport.

Timothy Jones, McCormick, Barstow, Sheppard, Wayte & Carruth, Fresno, Cal., for Orlopp Turkey Breeders.

Philip J. Norgaard, Dietrich, Glasrud & Jones, Fresno, Cal., Steven G. Johnson, Norbest Inc., Midvale, Utah, for Norbest.

John P. Eleazarian, Kimble, MacMichael & Upton, John H. Baker, Baker, Manock & Jensen, Fresno, Cal., for John Tutelian.

Howard Alan Sagaser, Jory, Peterson & Sagaser, Fresno, Cal., for Clifford Tutelian.

Douglas Eugene Noll, Lang, Richert & Patch, Fresno, Cal., for Civic Center Square.

Vernon C. Watters, San Francisco, Cal., for Credit Agrico.

Albert J. Berryman, III, Lerrigo, Nibler, Berryman, Coleman & Bennett, Fresno, Cal., for Farm Credit Leasing.

Chris Pilegard, Fresno, Cal., for Jensen & Pilegard.

Dan L. Carroll, Downey, Brand, Seymour & Rohwer, Sacramento, Cal., for Louis Rich.

Stuart M. Gerson, U.S. Dept. of Justice, Washington, D.C., for AGRI.

ORDERS RE MOTIONS

COYLE, Chief Judge.

On October 7, 1991, the court heard Purina Mills, Inc.'s Motion for Summary Judgment, Norbest, Inc's Counter-Motion for Summary Judgment, Norbest, Inc's Motion to Strike Evidence, and the United States Department of Agriculture's Motion for Leave to File Amicus Brief.

Upon due consideration of the written and oral arguments of the parties and the record herein, the court issues its rulings with respect to these motions for the reasons set forth herein.

A. Motion to Strike.

Norbest moves to strike numerous averments in the respective declarations of Mark A. Lakers, Carl Nethers and Malcolm Leader-Picone and certain portions of the deposition testimony of William Rittenhouse, Clifford Tutelian, and James L. Leong, asserting with respect to each objection a mishmash of grounds, many, if not all of which are aptly described by Purina as nitpicking and hypertechnical. The court will add time-wasting and meritless. The court has reviewed the challenged portions of the respective affidavits and depositions and simply cannot agree that they should be stricken.

Consequently, this motion is denied.

B. Motions for Summary Judgment.

The primary issues involved in these motions are whether, under the undisputed facts of this action, Purina comes within the provisions of the Poultry Producers Financial Protection Act of 1987, amending the Packers and Stockyards Act of 1921 (hereinafter referred to as the Act), 7 U.S.C. §§ 182, 197, such that it is entitled to the statutory trust, i.e., whether Purina was a "poultry grower" and whether its contractual arrangement with Roxford was a "poultry growing arrangement".

Resolution of some of these issues will involve the statutory construction of terms used in the Act. The construction of these particular terms present issues of first impression.

The operative statutory provisions at issue in this litigation are set forth in 7 U.S.C. § 197(a) & (b):

(a) Protection of public interest from inadequate financing arrangements

It is hereby found that a burden on and obstruction to commerce in poultry is caused by financing arrangements under which live poultry dealers encumber, give lenders security interest in, or place liens on, poultry obtained by such persons by purchase in cash sales or by poultry growing arrangements, or on inventories of or receivables or proceeds from such poultry or poultry products therefrom, when payment is not made for the poultry and that such financing arrangements are contrary to the public interest. This section is intended to remedy such burden on and obstruction to commerce in poultry and protect the public interest.

(b) Poultry, inventories, receivables and proceeds held by dealer in trust for benefit of unpaid cash sellers or poultry growers

All poultry obtained by a live poultry dealer, by purchase in cash sales or by poultry growing arrangement, and all inventories of, or receivables or proceeds from such poultry or poultry products derived therefrom, shall be held by such live poultry dealer in trust for the benefit of of all unpaid cash sellers or poultry growers of such poultry, until full payment has been received by such unpaid cash sellers or poultry growers, unless such live poultry dealer does not have an average annual sales of live poultry, or average annual value of live poultry obtained by purchase or by poultry growing arrangement, in excess of $100,000.¹

. . . . .

(e) Definition of cash sale

For the purpose of this section, a cash sale means a sale in which the seller does not expressly extend credit to the buyer.

7 U.S.C. § 182 sets forth definitions of various of the statutory terms relevant to the resolution of the motions before the court:

(7) The term `poultry product' means any product or byproduct of the business of slaughtering poultry and processing poultry after slaughter;

(8) The term `poultry grower' means any person engaged in the business of raising and caring for live poultry for slaughter by another, whether the poultry is owned by such person or by another, but not an employee of the owner of such poultry;

(9) The term `poultry growing arrangement' means any growout contract, marketing agreement, or other arrangement under which a poultry grower raises and cares for live poultry for delivery, in accord with another's instructions, for slaughter;

(10) The term `live poultry dealer' means any person engaged in the business of obtaining live poultry by purchase or under a poultry growing arrangement for the purpose of either slaughtering it or selling it for slaughter by another....

1. Poultry Grower.

a. Standards Governing Statutory Construction.

"In construing a statute in a case of first impression, courts look to the traditional signposts of statutory construction: first, the language of the statute itself ...; second, its legislative history ..., and as an aid in interpreting Congress' intent, the interpretation given to it by its administering agency." Brock v. Writers Guild of America West, Inc., 762 F.2d 1349, 1353 (9th Cir.1985).

Thus, the plain meaning of a statute is the starting point for its interpretation. American Tobacco Co. v. Patterson, 456 U.S. 63, 68, 102 S.Ct. 1534, 1537, 71 L.Ed.2d 748 (1982). "A fundamental canon of statutory construction is that, unless otherwise defined, words will be interpreted as taking their ordinary, contemporary, common meaning." Perrin v. United States, 444 U.S. 37, 42, 100 S.Ct. 311, 314, 62 L.Ed.2d 199 (1979). "If the intent of Congress is clear, that is the end of the matter; for the court ... must give effect to the unambiguously expressed intent of Congress." Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-843, 104 S.Ct. 2778, 2781-82, 81 L.Ed.2d 694 (1984). If, however, the plain language of the statute does not lend itself to clear interpretation, the court then examines relevant legislative history to determine Congressional intent, Blum v. Stenson, 465 U.S. 886, 898, 104 S.Ct. 1541, 1548, 79 L.Ed.2d 891 (1984), looking, as noted, to the interpretation given to a statute by its administering agency as an aid in interpreting Congressional intent. Brock, supra. Moreover, because the Act is remedial legislation, it is intended to be construed liberally to effect its purpose. In re G & L Packing Co., Inc., 20 B.R. 789, 808 (Bkrtcy.N.D.N.Y.1982), aff'd, 41 B.R. 903 (N.D.N.Y.1984); Pennsylvania Agr. Co-op. v. Ezra Martin Co., 495 F.Supp. 565, 570 (M.D.Pa.1980).

i. Plain Meaning.

Purina argues that it is a "poultry grower" "engaged in the business of raising and caring for live poultry for slaughter by another" within the plain meaning of Section 182(8). The phrase "engaged in the business of raising and caring" are not defined in the statute.

Purina bases its assertion on the fact that it owned the turkey poults and retained title to the turkeys at all times until they were sold to Roxford for slaughter,² that it contracted with growers to provide the grow-out services, that it retained the authority to approve any prescribed management program recommended by Roxford to the growers, that Roxford, as flock supervisor, provided Purina with weekly field inspection reports informing Purina as to the health and condition of the turkeys, which field inspection reports were reviewed by Purina's in-house poultry experts.

Norbest points out that Webster's New Collegiate Dictionary (1980) defines "raise" in relation to animals as "to breed and bring (an animal) to maturity" and defines "care" to mean "painstaking and watchful attention". Norbest contends that the plain meaning of these terms requires that to be a poultry grower within the meaning of the statute there must be "direct, handson involvement in the actual growing, treating, feeding, and husbandry of the poultry to the point of slaughter".

The court does not agree with either party that the meaning of these terms is so plain that resort to the legislative history is not required. In the court's opinion, Norbest's position ignores the "engaged in the business" portion of the phrase. A statute should be construed so as to avoid making any word superfluous. United States v. Handy, 761 F.2d 1279, 1280 (9th Cir.1985). "In construing a statute, it is the duty of the court to give significance to every word, phrase, sentence and part of an act as a whole, and not to render it partially or entirely void." Matter of Borba, 736 F.2d 1317, 1320 (9th Cir.1984). However, the court also is persuaded that the scope of "engaged in the business" is ambiguous. Therefore, the court will look to legislative history in construing this portion of the Act.

ii. Legislative History.

Norbest argues that...