Jackson v. Swift Eckrich, Inc.

• Decision Date: 28 April 1995
• Docket Number: Nos. 93-3874,93-3971,s. 93-3874
• Parties: Bill JACKSON, Husband; Juanita Jackson, Wife, Appellants/Cross-appellees, v. SWIFT ECKRICH, INC., Appellee/Cross-appellant. Con Agra, successor in interest to Swift Eckrich, Inc., of Huntsville, Arkansas; Dick Wolf Individually and as Agent and Employee of Swift Eckrich, Inc. of Huntsville, Arkansas; Russ May, Individually and as Agent and Employee of Swift Eckrich, Inc. of Huntsville, Arkansas; Paul Prudhomme, Individually and as Agent and Employee of Swift Eckrich, Inc. of Huntsville, Arkansas, Defendants.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1452

53 F.3d 1452

Bill JACKSON, Husband; Juanita Jackson, Wife Appellants/Cross-appellees, v. SWIFT ECKRICH, INC., Appellee/Cross-appellant Con Agra, successor in interest to Swift Eckrich, Inc., of Huntsville, Arkansas; Dick Wolf Individually and as Agent and Employee of Swift Eckrich, Inc. of Huntsville, Arkansas Russ May, Individually and as Agent and Employee of Swift Eckrich, Inc. of Huntsville, Arkansas; Paul Prudhomme Individually and as Agent and Employee of Swift Eckrich, Inc. of Huntsville, Arkansas, Defendants.

Nos. 93-3874, 93-3971.

United States Court of Appeals, Eighth Circuit.

Submitted Nov. 17, 1994.

Decided April 28, 1995.

James G. Lingle, Rogers, AK, argued (Clay Fulcher, on the brief), for appellant.

Charles L. Harwell, Springdale, AK, argued (James E. Crouch, on the brief), for appellees.

Before RICHARD S. ARNOLD, Chief Judge, BRIGHT, Senior Circuit Judge, and McMILLIAN, Circuit Judge.

McMILLIAN, Circuit Judge.

Bill ¹ and Juanita Jackson, husband and wife, appeal from a final order entered in the United States District Court ² for the Western District of Arkansas, granting partial judgment as a matter of law to appellee/cross-appellant Swift Eckrich, Inc., on grounds that the doctrine of primary jurisdiction required the Secretary of Agriculture to determine whether an alleged bargaining practice of Swift Eckrich violated the Packers and Stockyards Act (PSA), 7 U.S.C. Secs. 181-228. Jackson v. Swift-Eckrich, Inc., 836 F.Supp. 1447 (W.D.Ark.1993). For reversal, the Jacksons argue the district court erred in (1) holding the doctrine of primary jurisdiction applied, (2) improperly substituting its judgment for that of the jury, and (3) improperly reducing the judgment. On cross-appeal, Swift-Eckrich argues the district court erred in holding (1) the Sherman Act statute of limitations period applied to claims under the PSA, (2) the doctrine of primary jurisdiction did not apply to all claims brought under the PSA, and (3) Swift Eckrich was not entitled to judgment as a matter of law on the Jacksons' claims of breach of contract and fraud. For the reasons discussed below, we affirm the judgment of the district court.

I. BACKGROUND

This case is about turkey growing. In 1985, the Jacksons signed their first contract to grow turkeys for Swift Eckrich, a poultry processing company with a plant in Huntsville, Arkansas. From 1981-1985, the Jacksons raised turkeys for another company, but they decided to switch to Swift Eckrich because of a desire for greater profits. Swift Eckrich, unlike most poultry processors, is not a totally integrated enterprise. Swift Eckrich had a practice of selling young turkeys, poults, to independent growers who would raise the turkeys and then sell them back to Swift Eckrich (approximately seventeen to nineteen weeks later) when the turkeys reached a marketable size. Swift Eckrich's sale and re-purchase of the turkeys was provided for in the same contract. The contract also contained terms regarding the manner in which the turkeys were to be raised. There were, however, two versions of the growing contract which Swift Eckrich offered to independent growers, a "floor" contract and a "performance" contract. Each type of contract had a one-year term. The Jacksons signed a series of six one-year floor contracts with Swift Eckrich between 1985 and 1991.

The floor contract was a market-related contract. The price per pound Swift Eckrich paid the growers was a function of the grain and turkey markets. Growers had to pay feed costs themselves, but they had the potential to make more money under the floor contract because of the possibility of favorable market movements. The risk of loss was higher with this contract than with the performance contract. The performance contract was a cost-plus contract. Under the performance contract, a grower was reimbursed for his or her actual costs of raising the turkeys, plus so much based on performance. In 1985, the Jacksons had a choice of a performance contract or a floor contract. They chose the floor contract. They maintain, however, they were initially told they would have the opportunity to choose each year the type of contract under which they would grow turkeys.

The Jacksons continued to grow turkeys for Swift Eckrich under a floor contract until, according to Bill Jackson's testimony, they requested a performance contract for the 1989 growing year. Swift Eckrich's procurement manager, Dick Wolf, testified that he could not recall such a request from the Jacksons. Wolf further testified that Swift Eckrich had reached a point where it was only offering performance contracts to producer growers, i.e. those growers who had their own feed mills, or could otherwise control the cost of their feed. Because the Jacksons did not have a feed mill or could not otherwise control their feed costs, their request for a performance contract was denied. On August 19, 1988, the Jacksons signed a floor contract for the 1989 growing year. Bill Jackson also testified that Swift Eckrich denied his request for a performance contract in 1990 as well. The Jacksons nonetheless signed floor contracts in 1990 and 1991. The Jacksons argue that Swift Eckrich's failure to offer them a choice of contracts constituted a violation of the PSA provisions which prohibit unfair, unjustly discriminatory, or deceptive practices, and undue or unreasonable preferences. See 7 U.S.C. Sec. 192(a), (b).

In this lawsuit, filed in August 1992, the Jacksons also alleged that a number of Swift Eckrich's turkey-handling practices violated both the contracts and the PSA. For example, Swift Eckrich's weighmaster, Dean Bartlett, was not aware of, and did not comply with, certain federal regulations that governed the timing of turkey-weighing, even though he had earlier signed an affidavit agreeing to comply with such regulations. Swift Eckrich also failed to properly record truck identification numbers when the turkeys were weighed. Such information was important because the turkeys were weighed in the trucks; therefore, in order to obtain an accurate weight for the turkeys, the proper truck weight, the "tare" weight, had to be deducted from the gross weight. The Jacksons presented expert testimony at trial that the weighing system employed by Swift Eckrich resulted in underweighed turkeys. The Jacksons also contended that Swift Eckrich improperly charged an excessive number of dead-on-arrival birds (DOAs) to them, even though Swift Eckrich's "catch-and-haul" crews, employees who retrieved and transported the turkeys, may have caused some of the fatalities by mishandling the turkeys. Moreover, instead of using a contract formula for deducting condemned turkey carcasses, Swift Eckrich used an average-live-weight calculation. Swift Eckrich later admitted that condemned turkeys (rejects) were typically smaller than average. Although a typical Swift Eckrich turkey weighs about 26 pounds, Swift Eckrich admitted that some weight tickets showed condemned turkeys weighing over 80 pounds. Finally, the Jacksons alleged that Swift Eckrich improperly charged them for bird downgrades. The grading of turkey quality affected the price Swift Eckrich paid the growers. The Jacksons maintained that many of the bruised birds which were downgraded by Swift Eckrich received injuries as a result of the way Swift Eckrich catch-and-haul crews handled the birds.

The Jacksons brought this action under a variety of legal theories, some overlapping, which included alleged violations of the PSA, breach of contract, fraud, breach of the implied warranty of merchantability, and negligence. The negligence claim was not submitted to the jury. The jury found that Swift Eckrich violated the PSA, breached its contracts with the Jacksons, and committed common law fraud. The jury found in favor of Swift Eckrich on the breach of the implied warranty of merchantability, a claim which was premised on the Jacksons' allegation that Swift Eckrich sold them bad poults. The jury awarded the Jacksons $251,000 for Swift Eckrich's failure to offer performance contracts to the Jacksons for 1989, 1990, and 1991. It also awarded $50,000 to the Jacksons for "other violations" of the PSA, and $40,000 for breach of contract and fraud.

Following the verdict, Swift Eckrich filed a motion for judgment as a matter of law, maintaining that the doctrine of primary jurisdiction should have precluded the issues regarding the alleged PSA violations from reaching the jury. The district court granted the motion in part, holding that the allegation of a PSA violation based upon Swift Eckrich's practice of offering different contracts to various growers was more appropriately addressed by the administrative agency, i.e. the Packers and Stockyards Administration (a division of the Department of Agriculture), charged with oversight of the PSA. See 836 F.Supp. at 1450-56. As a result, an amended judgment was issued, reducing the damages award by $251,000. The district court left intact that portion of the award based on "other" PSA violations, holding that the expertise of the Secretary of Agriculture was not necessary to determine whether such acts or practices violated the PSA. Id. at 1457. The district court also held that, if it were wrong on the primary jurisdiction question, it would nonetheless grant judgment as a matter of law to Swift-Eckrich with regard to its failure to offer performance contracts because, as a matter of law, the failure to offer performance contracts did not violate the PSA. Id. at 1456. The Jacksons filed a notice of appeal from the partial grant of judgment as a matter of law on November 23, 1993, and on December 7, 1993, Swift Eckrich cross-appealed from the district court's denial of the rest of its motion for judgment as a matter of law. At the request of this court, the United States filed a brief, as amicus curiae, on the issue of primary jurisdiction.

II. DISCUSSION

A.

Primary jurisdiction...