Marshall Durbin Farms, Inc. v. National Farmers Org., Inc.

• Decision Date: 09 July 1971
• Docket Number: No. 30251.,30251.
• Citation: 446 F.2d 353
• Parties: MARSHALL DURBIN FARMS, INC., et al., Plaintiffs-Appellees, v. NATIONAL FARMERS ORGANIZATION, INC., et al., Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

446 F.2d 353 (1971)

MARSHALL DURBIN FARMS, INC., et al., Plaintiffs-Appellees, v. NATIONAL FARMERS ORGANIZATION, INC., et al., Defendants-Appellants.

No. 30251.

United States Court of Appeals, Fifth Circuit.

July 9, 1971.

Robert S. Vance, Birmingham, Ala., Lee D. Sinclair, Washington, D. C., Rowley & Scott, John P. McKenna, Washington, D. C., Worth Rowley, Washington, D. C., for defendants-appellants; Jenkins, Cole, Callaway & Vance, Birmingham, Ala., of counsel.

L. Drew Redden, Sirote, Permutt, Friend & Friedman, Birmingham, Ala., Collier, Shannon, Rill & Edwards, James F. Rill, Washington, D. C., Caddell, Shanks, Harris & Moores, Decatur, Ala., Thomas, Taliaferro, Forman, Burr & Murray, Birmingham, Ala., Robert H. Harris, Jon H. Moores, Decatur, Ala., C. V. Stelzenmuller, Birmingham, Ala., John A. Fraser, St. Louis, Mo. (Special Counsel for Plaintiff Ralston-Purina Company) for plaintiffs-appellees; Rogers, Howard, Redden & Mills, Birmingham, Ala., Harry E. Jennings, Jr., Washington, D. C., William H. Mills, Birmingham, Ala., James L. Permutt, William G. West, Jr., Birmingham, Ala., of counsel.

Before THORNBERRY and GODBOLD, Circuit Judges, and BOOTLE, District Judge.

GODBOLD, Circuit Judge:

National Farmers Organization (NFO)¹ and several of its members appeal from the District Court's order granting a preliminary injunction against them in an action alleging violations of §§ 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1-2. We reverse.

The fourteen plaintiffs² are processors of broiler chickens and operators of feed mills. They have large numbers of plants and facilities located in numerous different towns in many counties of North Alabama. Generally speaking, the growing of broilers is contracted out to farmers, each of whom feeds and cares for chickens owned by a processor, using feed and supplies the processor sells him, until the chickens are ready for processing. NFO is active in North Alabama, and many of its members in the area are farmers who grow broilers under such contracts with processors.

In April, 1970 NFO began in the North Alabama area what it terms a "holding action" pursuant to which, NFO says, its members refused to grow broilers for plaintiffs until such time as the processors entered into new contractual arrangements sought by NFO. Pickets were set up at some of plaintiffs' plants. On June 8 picketing began on a round-the-clock basis.

On June 18, 1970 the plaintiffs filed suit, charging NFO and some of its Alabama officers and members with conspiring to restrain trade, conspiring to monopolize, and attempting to monopolize. Plaintiffs charged that the defendants had effectuated the alleged offenses in three general ways: conspiring with and inducing producers not members of NFO to refrain from growing broilers under contracts with plaintiffs; interfering with plaintiffs' businesses, plant operations, and sales; and picketing at plaintiffs' plants to induce employees and Department of Agriculture inspectors to refrain from entering.

The lengthy complaint alleges more than 50 specific incidents or activities in which it was charged that NFO had engaged in threats, intimidation, harassment, acts of violence and destruction of property, to effectuate the alleged antitrust offenses. The locations of most of the incidents were not alleged. More than 50 persons were named as victims of the incidents charged. The largest number were broiler producers who did not belong to NFO, and members of their families. Their places, or even counties, of residence were not specified. A substantial number of the alleged victims were said to be employees of plaintiffs, but, as to most of them, the complaint does not reveal of which plaintiff.

The complaint was verified by the affidavit of an officer or managerial employee of each plaintiff. Each verification was the same, stating only that the averments of the complaint were true and correct according to affiant's knowledge, information and belief.

Simultaneously with the filing of the complaint plaintiffs filed a motion for a preliminary injunction, relying upon the verified complaint and nine attached affidavits. Several of the affidavits described specific threats of violence and of destruction of property, and such occurrences as the burning of two chicken houses with evidence of arson, unexplained rifle shots fired in the vicinity of an affiant, and the unexplained death of a cow. Two affidavits concerned suggestions to persons by NFO members not to accept chicks for growing. One affidavit related the unexplained presence of unidentified persons near the butane gas tanks of a processing plant. Some of the affidavits concerned incidents not alleged in the complaint.

On the date of filing, June 18, the court set the motion for hearing at Birmingham, Alabama, on June 25, stating in its order that the parties could present evidence at the hearing by affidavit and oral testimony if they desired. The complaint, motion for injunction (with the nine affidavits), and order were served on the defendants at various times from Friday, June 19 to Tuesday, June 24. NFO's agent for service of process was served on the 19th. On June 23, defense counsel moved for a continuance of the hearing, and it was denied.

At the commencement of the hearing on the morning of June 25, defense counsel renewed the motion for a continuance on the grounds, inter alia, that the issues were complex and that counsel had not had an opportunity to confer with the witnesses. Counsel requested time to prepare adequately. The court denied the motion, stating:

Of course that request is not unreasonable in the light of the facts. On the other hand today is the only day before the first of October that I have open and for that reason I just can\'t continue the case. I do not consider the request unreasonable.

Defense counsel renewed the request for a postponement pointing out the substantial impact of the proceedings on what counsel described as "thousands of Alabama farmers," and asked that the matter be set prior to October 1 before whatever district judge might be available. The court declined.

Plaintiffs opened their case by introducing, over objection by the defendants, approximately 77 affidavits, including the nine attached to the motion. Of the approximately 68 affidavits theretofore unrevealed, defendants were handed copies of approximately 47.³ Plaintiffs did not have copies of 21 affidavits to furnish to defendants.

The defense then introduced 14 affidavits, all but one of them executed prior to June 25. The court recessed for slightly less than an hour to afford it and counsel an opportunity to examine the affidavits. When court reconvened the trial judge announced that he had read all of the defendants' affidavits and, of those submitted by plaintiffs, more than half selected at random from each category (i. e., those describing threats, violence, etc., to non-member producers, those describing interference with plaintiffs' business operations, and those relating to picket line activities.) Plaintiffs then put on the live testimony of the Alabama manager for plaintiff Pillsbury, who described the facilities of the plaintiffs in North Alabama and the general operation of the broiler business. At the conclusion of his testimony (the most lengthy of the day), the court announced that it would only have until 4:30 of that afternoon to receive live testimony, and at 4:30 it would take the case under submission on the affidavits and the live testimony. The court gave each side half of the time remaining. Plaintiffs put on nine more witnesses, and in the remaining one hour and 45 minutes available to them defendants put on eight.

At the conclusion of the testimony, the court announced that it would grant the injunction. The following day it entered findings of fact, which stated that they were based upon all the evidence presented — affidavits, written exhibits and oral testimony — and conclusions of law. It issued an injunction enjoining defendants from acting in concert to interfere with plaintiffs' business activities; from picketing or assembling at or near plaintiffs' plants and mills; from threatening, intimidating (etc.) employees of plaintiffs and persons contracting with plaintiffs; from interfering with plaintiffs' vehicles; and from interfering with ingress and egress of goods at plaintiffs' plants and mills. A $2,500 bond was required. A motion of defendants to increase the bond to $1,000,000 was denied. On motion of defendants this court modified the injunction pending appeal to eliminate restraints on peaceful picketing.

In reversing, we emphasize that we understand the deep concern of the experienced trial judge arising from the picture presented to him of threats, intimidation and disorder that might reach beyond the interests of the immediate parties, and we give full regard to his discretion in granting or denying injunctive relief. Reversal is, in large part, laid at the doors of the plaintiffs themselves.

Two interrelated rights of the defendants are critical to the case: fair notice and an effective opportunity to controvert the facts adduced in support of plaintiffs' motion. Rule 65(a) requires notice. It does not define what "notice" must be. But we know that it implies a hearing. Miami Beach Federal S. & L. Assn. v. Callander, 256 F.2d 410 (5th Cir. 1958); Hawkins v. Board of Control, 253 F.2d 752 (5th Cir. 1958); Sims v. Greene, 161 F.2d 87 (3d Cir. 1947). "Hearing requires a trial of issues of fact. Trial of issues of fact necessitates an opportunity to present evidence," Hawkins, supra, at 753, and not by only one side to the controversy, Sims, supra.

The right of defendants to present controverting factual data is illusory unless there is adequate notice of plaintiffs' claims. "It goes without saying that the requirements of a fair hearing include notice of the claims of the opposing party and an opportunity to meet them." FTC v. National...