LITVAK MEAT COMPANY v. DENVER UNION STOCK YARD COMPANY

Decision Date26 May 1969
Docket NumberCiv. A. C-1060.
Citation303 F. Supp. 715
PartiesLITVAK MEAT COMPANY, a Colorado corporation, Plaintiff, v. The DENVER UNION STOCK YARD COMPANY, a Colorado corporation, Defendant.
CourtU.S. District Court — District of Colorado

Feder, Morris & Kortz, by Harold A. Feder, Denver, Colo., for plaintiff.

Dawson, Nagel, Sherman & Howard, by Winston S. Howard, Raymond J. Turner and George A. Sissel, Denver, Colo., for defendant.

MEMORANDUM OPINION AND ORDER

ARRAJ, Chief Judge.

This matter is before the Court on defendant's motion to dismiss the complaint for failure to state a claim upon which relief can be granted and for lack of subject matter jurisdiction. By previous order ruling on the motion was reserved pending defendant's answer and the answer has now been filed. Defendant grounds the motion on the doctrine of primary jurisdiction, contending that plaintiff's claims must first be submitted to the Secretary of Agriculture who is given regulatory powers over stockyards by the Packers and Stockyards Act, 7 U.S.C. §§ 181 et seq.

Plaintiff invokes the jurisdiction of this Court on the basis of the federal stockyards act and the general federal question statute.1 Under 7 U.S.C. § 209 damage suits may be brought in the federal district courts for violations of certain sections of the stockyards act. Among the provisions enumerated are 7 U.S.C. §§ 206 and 208, on which the complaint purports to be primarily based. Inasmuch as the action is asserted to be one arising under the federal stockyards act and the amount in controversy exceeds $10,000, reliance is also placed on 28 U.S.C. § 1331. The complaint reveals a lack of diversity of citizenship, both parties being Colorado corporations.

In substance, plaintiff alleges that defendant is subject to the provisions of the stockyards act and has violated 7 U.S.C. § 206 prohibiting unjust, unreasonable or discriminatory rates or charges for stockyard services and 7 U.S.C. § 208 prohibiting unjust, unreasonable or discriminatory regulations and practices regarding the provision of stockyard services. The complaint asserts that these provisions have been and are being violated by a contractual situation which exists between the parties. Additionally, relief is sought, in apparent reliance on state law, on the basis of lack of or illegality of consideration, unjust enrichment, economic duress and contract interpretation.

The core of plaintiff's complaint is a January 1, 1960 contract (exhibit B to the complaint) executed by it and defendant which provides that until December 31, 1969 or until defendant ceases doing business as a public stockyard, plaintiff will pay to defendant a sum equal to fifty per cent of the regular scheduled yardage charges on all livestock which plaintiff acquires and on all livestock slaughtered or processed on plaintiff's premises as constituted within the vicinity of defendant's yards. Livestock purchased at the yard on which the seller has paid yardage are excepted and a reduced sum is due on up to 3,000 head per year which come to plaintiff's plant from being fed by plaintiff at a feedlot.

This agreement was executed to replace one of January 29, 1957 (exhibit A to the complaint) under which defendant promised to have built at its expense a railroad spur track for plaintiff's non-exclusive use and plaintiff agreed to pay a $1.00 per year rent and a sum equal to the regular scheduled yardage charges on all livestock acquired by it or slaughtered or processed on its premises, excepting livestock purchased by plaintiff at the yard on which yardage had already been paid. Defendant was to have the track built and pay the expenses of construction and rights of way (estimated to be $70,000), maintain the track at its expense and pay all taxes on the tracks and rights of way. Plaintiff asserts that this agreement was made as a result of economic duress.

It is also alleged that in conjunction with the 1960 agreement, plaintiff leased (exhibit C to the complaint) certain cattle pens to defendant for ten years for $1,000 to be paid in annual installments of $100 and that defendant simultaneously licensed (exhibit D to the complaint) these same pens back to plaintiff on identical terms. Defendant has initiated state court proceedings to, among other things, retake possession of these pens. While the spur track cost approximately $70,000, it is averred that payments of over $375,000 have been made under the contracts with no stockyard services having been provided in return. It is further alleged that other area packers entered into contracts with defendant similar to the 1960 agreement and, in support of allegations of discrimination, that as to one other packer a new contract has been made (exhibit E to the complaint) abating the payment of yardage charges under the prior contract in return for a lump sum payment.

In view of this alleged situation, plaintiff seeks the following relief: 1) a declaration that defendant is no longer operating as a public stockyard within the meaning of 7 U.S.C. § 202 or the 1960 contract;2 2) a declaration that the 1960 contract, lease and license are void; 3) an order abating payment of future yardage charges under the contract; 4) money damages for violations of the stockyards act; and 5) a money judgment for the amount of yardage charges paid under the contracts over the cost of the spur track.

Against this, defendant has presently invoked the doctrine of primary jurisdiction. Under this well established principle, preliminary resort to an administrative officer or agency may be required when a court action raises matters within the authority of that officer or agency. See generally 3 K. Davis, Administrative Law Treatise §§ 19.01-19.09 (1958); Jaffe, Primary Jurisdiction, 77 Harv.L.Rev. 1037 (1964).

The presently relevant officer is the Secretary of Agriculture, some of whose powers and duties regarding stockyards are as follows: The Secretary is to determine which stockyards come within the purview of the act and post them as such. 7 U.S.C. § 202. He is given various powers and duties regarding market agencies and dealers operating at such stockyards. 7 U.S.C. §§ 203-205. Rates and charges for stockyard services and rules or regulations affecting them are to be filed with the Secretary and he, either upon complaint or his own initiative, may hear and determine their legality. 7 U.S.C. § 207. Damage liability for violation of certain sections of the act, including sections 206 and 208, or regulations of the Secretary may be enforced by complaint to the Secretary in accordance with the provisions of 7 U.S.C. § 210. 7 U.S.C. § 209. Further, the Secretary may investigate and determine such violations on his own motion. 7 U.S.C. § 210. Whether inquiry be initiated by complaint or by the Secretary himself, if any rate, charge, regulation or practice for or in conjunction with the provision of stockyard services is found to be unjust, unreasonable or discriminatory, he may determine what will be the just, reasonable, and nondiscriminatory rate, charge, regulation or practice and order that the violation not be continued and that the rate, charge, regulation or practice established by him be adhered to. 7 U.S.C. § 211. The Secretary is to prescribe rates and practices where necessary to prevent discrimination between intrastate and interstate commerce. 7 U.S.C. § 212. Finally, he is empowered to prevent unfair, discriminatory or deceptive practices. 7 U.S.C. § 213. The regulations of the Secretary issued under these and other sections of the Packers and Stockyards Act are found in 9 C.F.R. §§ 201 et seq. (1968).

We have no doubt that the doctrine of primary jurisdiction is generally applicable in actions under the Packers and Stockyards Act. It appears that in every reported decision to consider the question, the conclusion has been in favor of the doctrine even though 7 U.S.C. § 209(b) provides for complaint to the Secretary or suit in the federal district courts. Kelly v. Union Stockyards & Transit Co., 190 F.2d 860 (7th Cir. 1951) (attack on removal from open order list); Sullivan v. Union Stockyards Co., 26 F.2d 60 (8th Cir. 1928) (attack on rates and charges); Shannon v. Chambers, 212 F.Supp. 620 (S.D.Ind.1962) (attack on practices regarding furnishing of stockyard services); United States v. Castner, 116 F.Supp. 475, 479 (N.D.Ill.1953) (doctrine generally applicable but not in criminal cases); Schmidt v. Old Union Stockyards Co., 58 Wash.2d 478, 364 P.2d 23 (1961) (attack on change in method of sale). While application of the doctrine was refused in an action against a stockyard based solely on the antitrust laws, Denver Union Stockyard Co. v. Denver Live Stock Commission Co., 404 F.2d 1055 (10th Cir. 1968), it has been found relevant in suits founded on both the anti-trust laws and the stockyards act. Crain v. Blue Grass Stockyards Co., 399 F.2d 868 (6th Cir. 1968); McCleneghan v. Union Stock Yards Co., 298 F.2d 659 (8th Cir. 1962).

In view of Texas & Pac. Ry. v. Abilene Cotton Oil Co., 204 U.S. 426, 27 S.Ct. 350, 51 L.Ed. 553 (1907), we accord with the position that the doctrine of primary jurisdiction is potentially applicable in suits under the stockyards act despite the wording of 7 U.S.C. § 209(b). Notwithstanding statutory provisions which, like section 209(b), provided that damage recovery could be by complaint to the ICC or suit in federal district court and that existing common law and statutory remedies were not altered or abridged, the Court in Abilene held that a reparations suit based on unreasonableness of a rate could not be entertained absent preliminary resort to the administrative agency.3

Though the doctrine of primary jurisdiction is thus potentially applicable in suits under the stockyards act, each case must be examined to determine whether the doctrine should be applied. It must be determined whether the preclusion of court jurisdiction in the particular case will serve the purposes...

To continue reading

Request your trial
1 cases
  • United States v. Navajo Freight Lines, Inc., Civ. A. No. C-2468.
    • United States
    • United States District Courts. 10th Circuit. United States District Court of Colorado
    • 3 Abril 1972
    ...to veto power equals "some measure of control" in violation of § 5(4)). Chief Judge Arraj's decision in Litvak Meat Co. v. Denver Union Stock Yard Co., 303 F.Supp. 715 (D.Colo.1969), that the Secretary of Agriculture should have primary jurisdiction to determine whether certain practices we......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT