Wheeler v. Pilgrim's Pride Corp., 07-40651.

Decision Date21 July 2008
Docket NumberNo. 07-40651.,07-40651.
Citation536 F.3d 455
PartiesCody WHEELER; Don Davis; Davey Williams, Plaintiffs-Appellees, v. PILGRIM'S PRIDE CORP., Defendant-Appellant.
CourtU.S. Court of Appeals — Fifth Circuit

Kelly Brant Tidwell, Patton & Tidwell, Texarkana, TX, Bradley Carroll Weber, Thomas F. Loose (argued), Christopher Michael Bass, Locke Lord Bissell & Liddell LLP, Dallas, TX, for Plaintiffs-Appellees.

Mark D. Taylor, Clayton E. Bailey (argued), Alexander Max Douglas Brauer, Baker & McKenzie, Dallas, TX, Jennifer Parker Ainsworth, Wilson, Sheehy, Knowles, Robertson & Cornelius, Tyler, TX, for Defendant-Appellant.

Michael S. Raab, Jonathan Heuer Levy (argued), U.S. Dept. of Justice, Civil Div., Washington, DC, for U.S., Amicus Curiae.

Before REAVLEY, JOLLY and GARZA, Circuit Judges.

EMILIO M. GARZA, Circuit Judge:

This appeal presents a single narrow question: whether a plaintiff must prove an adverse effect on competition to prevail in a suit alleging a violation of Packers and Stockyards Act Sections 202(a)-(b), 7 U.S.C. §§ 192(a)-(b), ("PSA"). The District Court answered this question in the negative despite the fact that the great weight of authority in our sister Circuits is to the contrary. Based on a plain-text reading of the PSA, we agree with the District Court. Therefore, we hold that a plaintiff need not prove an adverse effect on competition to prevail under 7 U.S.C. §§ 192(a)-(b). We disagree with those decisions of our sister Circuits that conflict with this holding and acknowledge that in so doing we create a circuit-split on this issue. We AFFIRM.

I

Plaintiffs-Appellees Cody Wheeler, Don Davis, and Davey Williams (together, the "Growers") are chicken farmers who grow chickens known as "broilers" for Defendant-Appellant Pilgrim's Pride Corporation ("PPC"), a chicken processor and dealer referred to as an "integrator" in the chicken industry. The Growers and PPC operate within a contractual relationship whereby PPC provides the Growers with the chicks, feed, and supplies required to raise chickens. In exchange, the Growers care for the chickens until they reach maturity and are returned to PPC. We say "returned" because the chicks, maturing chickens, feed, and medicine remain the property of PPC at all times. This is known as the "grow-out" process. It takes approximately two months to grow-out a flock. The Growers' operations (and the operations of other growers) are geographically clustered into areas called "complexes." PPC compensates the Growers under a "tournament system." In essence, PPC ranks the Growers against one another and against the other growers operating in their complex. PPC then compensates the Growers based on the quality of their broilers, the number that survive the grow-out process, and the amount of feed and supplies the Growers used.

At least one grower operates under a different system than the Growers. Lonnie "Bo" Pilgrim ("Mr. Pilgrim"), PPC's founder and chairman, purchases chicks, feed, and supplies from PPC rather than having them consigned to him. Operating in a different complex than the Growers, Mr. Pilgrim then raises the chickens at his farm ("LTD Farm") and sells them back to PPC. Rather than compensating Mr. Pilgrim under the tournament system, PPC pays Mr. Pilgrim the lesser of a weekly quoted market price or 102% of his costs. According to the Growers, Mr. Pilgrim earns more under his arrangement with PPC than they earn under their arrangements with PPC. The Growers further contend that PPC refused to offer them growing arrangements similar to Mr. Pilgrim's.

The Growers sued PPC under the PSA. Specifically, the Growers alleged that PPC's refusal to afford them an opportunity to operate under the same terms as an insider, is "unfair and unjustly discriminatory" and affords Mr. Pilgrim an "undue or unreasonable preference or advantage" in violation of sections 192(a)-(b).1 The Growers raised additional claims against PPC, as well, that we need not describe in detail for the purposes of the appeal. PPC moved for summary judgment arguing that the Growers did not allege an adverse effect on competition, as required to prevail under sections 192(a)-(b). The District Court found no such requirement in the PSA and denied the motion for summary judgment. Pursuant to 28 U.S.C. § 1292(b), the District Court then entered an order certifying the following issue for appeal: "whether a plaintiff must prove an adverse effect on competition in order to prevail under 7 U.S.C. §§ 192(a)-(b)." We permitted the appeal.

II

We may review an otherwise unappealable order of a District Court pursuant to 28 U.S.C. § 1292(b), if a District Court enters an order stating that it is "of the opinion that such order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation." Id. Under 28 U.S.C. § 1292(b), "it is not merely the controlling question of law which is certified for appeal; it is the entire order entered by the trial court." Ducre v. Executive Officers of Halter Marine, Inc., 752 F.2d 976, 984 n. 16 (5th Cir.1985) (citations omitted). Thus, we may address all issues material to the order in question and are not limited to the "controlling question of law." See id. Indeed, some Circuits have held that we are "obliged to address the order that was certified rather than the controlling question of law framed by the district court." Cipollone v. Liggett Group, Inc., 789 F.2d 181, 187-88 (3d Cir. 1986); see also Capital Temporaries, Inc. of Hartford v. Olsten Corp., 506 F.2d 658, 660 (2d Cir.1974). Here, we constrain ourselves to the question of statutory interpretation that the District Court identified and that the parties briefed because that question controls this appeal. We review an issue of statutory interpretation, such as the PSA's construction, de novo. Comacho v. Tex. Workforce Comm'n, 408 F.3d 229, 234 (5th Cir.2005).

III

The parties raise four issues that may bear on our interpretation of the PSA: first, whether the PSA's plain text requires a plaintiff to prove an adverse effect on competition to prevail in a suit under sections 192(a)-(b); second, whether the PSA's legislative history supports an adverse effect on competition requirement under sections 192(a)-(b);2 third, whether we must defer to the Department of Agriculture's ("USDA") interpretation of the PSA; and fourth, whether the Federal Trade Commission's ("FTC") interpretation of a similarly-worded statute bears on our interpretation of the PSA. If we find that a plaintiff must prove an adverse effect on competition to prevail under sections 192(a)-(b), PPC raises a fifth issue: whether we should dismiss this suit, rather than remanding it, because there is no evidence establishing an adverse effect on competition. Because we hold that the plain text of sections 192(a)-(b) does not require an adverse effect on competition, we need only address the first issue. We do, however, briefly discuss the PSA's legislative history because that is our point of departure from our sister Circuits.

A

We begin, as we should, with the plain text of the statute. See Permanent Mission of India to the United Nations v. City of New York, ___ U.S. ___, 127 S.Ct. 2352, 2356, 168 L.Ed.2d 85 (2007) (citation omitted) ("We begin, as always, with the text of the statute."); Watt v. Alaska, 451 U.S. 259, 266, 101 S.Ct. 1673, 68 L.Ed.2d 80 (1981) (quotation omitted) ("The starting point in every case involving construction of a statute is the language itself."); see also In re Rogers, 513 F.3d 212, 225 (5th Cir.2008). The PSA provides:

It shall be unlawful for any packer or swine contractor with respect to livestock, meats, meat food products, or livestock products in unmanufactured form, or for any live poultry dealer with respect to live poultry, to:
(a) Engage in or use any unfair, unjustly discriminatory, or deceptive practice or device; or
(b) Make or give any undue or unreasonable preference or advantage to any particular person or locality in any respect, or subject any particular person or locality to any undue or unreasonable prejudice or disadvantage in any respect; or
(c) Sell or otherwise transfer to or for any other packer, swine contractor, or any live poultry dealer, or buy or otherwise receive from or for any other packer, swine contractor, or any live poultry dealer, any article for the purpose or with the effect of apportioning the supply between any such persons, if such apportionment has the tendency or effect of restraining commerce or of creating a monopoly; or
(d) Sell or otherwise transfer to or for any other person, or buy or otherwise receive from or for any other person, any article for the purpose or with the effect of manipulating or controlling prices, or of creating a monopoly in the acquisition of, buying, selling, or dealing in, any article, or of restraining commerce; or (e) Engage in any course of business or do any act for the purpose or with the effect of manipulating or controlling prices, or of creating a monopoly in the acquisition of, buying, selling, or dealing in, any article, or of restraining commerce; or
(f) Conspire, combine, agree, or arrange with any other person (1) to apportion territory for carrying on business, or (2) to apportion purchases or sales of any article; or (3) to manipulate or control prices; or
(g) Conspire, combine, agree, or arrange with any other person to do, or aid or abet the doing of, any act made unlawful by subdivisions (a), (b), (c), (d), or (e) of this section.

7 U.S.C. § 192 (emphasis added).

The District Court held that the text of sections 192(a)-(b) "on its face" requires no showing of an adverse effect on competition. PPC contends that the District Court erred in this determination without offering a persuasive alternative interpretation of the text. Indeed, the only textual argument...

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5 cases
  • Wheeler v. Pilgrim's Pride Corp.
    • United States
    • U.S. Court of Appeals — Fifth Circuit
    • December 15, 2009
    ...of this court held that a plaintiff need not prove an adverse effect on competition to prevail under the statute. Wheeler v. Pilgrim's Pride Corp., 536 F.3d 455 (5th Cir.2008). The en banc court granted rehearing and disagrees with the panel and district Judicial History The Supreme Court i......
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    ...all issues material to the order in question and are not limited to the ‘controlling question[s] of law.’ " Wheeler v. Pilgrim's Pride Corp. , 536 F.3d 455, 457 (5th Cir. 2008), rev'd en banc on other grounds , 591 F.3d 355 (5th Cir. 2009).6 As the "may" indicates, whether to do so is a mat......
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    ...United States Trustee, 540 U.S. 526, 534 (2004); United States v. Ron Pair Enters., 489 U.S. 235, 242 (1989); Wheeler v. Pilgrim's Pride Corp., 536 F.3d 455, 458-59 (5th Cir. 2008). The plain language of section 727(e)(2) makes it apparent that, since the Bankruptcy Case was closed in 2005 ......
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    ...volumes less than those established by § 304. To interpret the statute, we begin by looking at its plain text. Wheeler v. Pilgrim's Pride Corp., 536 F.3d 455, 458 (5th Cir. 2008). The DWRRA contains three operative sections, and, because "it is a cardinal rule that a statute is to be read a......
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2 books & journal articles
  • Packers & Stockyards Act Claims
    • United States
    • ABA Antitrust Library Agriculture and Food Handbook
    • January 1, 2019
    ...addressed this precise issue when it held that ‘the purpose of the Packers and Stockyards Act of 29 . 410 F.3d 1295 (11th Cir. 2005). 30 . 536 F.3d 455 (5th Cir. 2008), aff’d en banc , 591 F.3d 355 (5th Cir. 2009). 31 . 604 F.3d 272 (6th Cir. 2010). 32 . Terry , 604 F.3d at 280 (“[I]n order......
  • Table of Cases
    • United States
    • ABA Antitrust Library Agriculture and Food Handbook
    • January 1, 2019
    ...v. Pilgrim’s Pride Corp., 246 F.R.D. 532 (E.D. Tex. 2007), rev’d , 591 F.3d 355 (5th Cir. 2009), 79 Wheeler v. Pilgrim’s Pride Corp., 536 F.3d 455 (5th Cir. 2008), aff’d en banc , 591 F.3d 355 (5th Cir. 2009), 9 1 Wheeler v Pilgrim’s Pride Corp., 591 F.3d 355 (5th Cir. 2009), (en banc) 87, ......

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