Opinion ID: 77005
Heading Depth: 2
Heading Rank: 2

Heading: issues

Text: 27
28 The Londons contend that the district court erred in granting Fieldale's motion for judgment as a matter of law on their PSA termination claim because Fieldale terminated their grower contracts without sufficient economic justification in violation of 7 U.S.C. § 192(a) and (b). Section 192(a) prohibits packers from engaging in or using any unfair, unjustly discriminatory, or deceptive practice or device. 7 U.S.C. § 192(a). Section 192(b) prohibits packers from subjecting any particular person or locality to any undue or unreasonable prejudice or disadvantage in any respect. 7 U.S.C. § 192(b). The statute does not define what constitutes an unfair, unjustly discriminatory, or deceptive practice. The Londons and amicus United States Department of Agriculture (DOA) contend that the plain language of the statute, the purpose of the PSA, and the DOA's interpretation all indicate that in order to prove that any practice is unfair under § 202(a), it is not necessary to prove predatory intent, competitive injury, or likelihood of injury. Fieldale and amicus National Chicken Council counter that the district court properly determined that plaintiffs must show that the unfair, discriminatory or deceptive practice adversely affected competition in order to prevail under the PSA. This is an issue of first impression for our circuit. 29 As in all cases of statutory construction, our task is to interpret the words of the[] statute[] in light of the purposes Congress sought to serve. Norfolk Redevelopment & Housing Auth. v. Chesapeake & Potomac Tel. Co., 464 U.S. 30, 36, 104 S.Ct. 304, 307, 78 L.Ed.2d 29 (1983) (quotation and citation omitted); see also United States v. Gonzalez, 671 F.2d 441, 443 (11th Cir.1982) (noting that this court's task is to construe the statute in light of the purposes Congress sought to serve). Along those lines, courts have construed the PSA against the backdrop of corruption the Act was intended to prevent. Philson v. Cold Creek Farms, 947 F.Supp. 197, 200 (E.D.N.C.1996). The primary purpose of the PSA was to assure fair competition and fair trade practices in livestock marketing and in the meatpacking industry. H.R.Rep. No. 85-1048 at p. 1 (1958) reprinted in 1958 U.S.C.C.A.N. 5212, 5213. At the time of enactment, the chief evil Congress feared was the monopoly of the packers. Stafford, 258 U.S. at 514-15, 42 S.Ct. at 401. The Act was aimed at halting `a general course of action for the purpose of destroying competition.' Armour & Co. v. United States, 402 F.2d 712, 720 (7th Cir.1968) (quoting House Report No. 1297, 66th Cong.3d Sess. (1921), p. 11). 30 Relying upon the PSA's antitrust ancestry, several courts have held that only those unfair, discriminatory or deceptive practices adversely affecting competition are prohibited by the PSA. See Farrow v. Dep't of Agric., 760 F.2d 211, 214 (8th Cir.1985); Pacific Trading Co. v. Wilson & Co., 547 F.2d 367, 369-70 (7th Cir.1976); Armour & Co., 402 F.2d at 722-23; Griffin v. Smithfield Foods, Inc., 183 F.Supp.2d 824, 827 (E.D.Va.2002); Cold Creek Farms, 947 F.Supp. at 200; see also Philson v. Goldsboro Milling Co., 164 F.3d 625, No. 96-2542, 96-2631, 1998 WL 709324, at  (4th Cir. Oct.5, 1998) (finding that the district court did not err in instructing the jury that the plaintiffs were required to prove that the defendants' conduct was likely to adversely affect competition in order to prevail on their claims under the PSA and noting that the plaintiff must establish that the challenged act is likely to produce the type of injury that the Act was designed to prevent). But see Spencer Livestock Comm'n Co. v. Dep't of Agric., 841 F.2d 1451, 1454-55 (9th Cir.1988); Wilson & Co. v. Benson, 286 F.2d 891, 895-96 (7th Cir.1961). 5 We join those circuits that hold that in order to succeed on a claim under the PSA, a plaintiff must show that the defendant's unfair, discriminatory or deceptive practice adversely affects or is likely to adversely affect competition. 31 The Armour decision is instructive on this issue. In Armour, the Seventh Circuit considered the legislative history of the PSA and noted its antitrust roots. The court inferred that the PSA might be broader than antecedent antitrust legislation, but found that there [was] no showing that there was any intent to give the Secretary of Agriculture complete and unbridled discretion to regulate the operations of packers. 402 F.2d at 722. The court reasoned: 32 Section 202(a) should be read liberally enough to take care of the types of anti-competitive practices properly deemed unfair by the Federal Trade Commission (15 U.S.C. § 45) and also to reach any of the special mischiefs and injuries inherent in livestock and poultry traffic. However, in Section 202(a) Congress gave the Secretary no mandate to ignore the general outline of long-time antitrust policy by condemning practices which are neither deceptive nor injurious to competition nor intended to be so by the party charged. 33 Id. 34 Recognizing that Section 202(a) authorize[s] the Secretary of Agriculture to regulate anticompetitive trade practices in the livestock and meat industry, the Eighth Circuit held that [a] practice is `unfair' ... if it injures or is likely to injure competition. Farrow, 760 F.2d at 214. Similarly, the Ninth Circuit has held that, at the very least, Section 202(a) requires a reasonable likelihood that ... the result [of a practice] will be an undue restraint of competition. De Jong Packing Co. v. United States Dep't of Agric., 618 F.2d 1329, 1337 (9th Cir.1980). The Fourth Circuit likewise has held that a Section 202(a) plaintiff must establish at least the likelihood that an arrangement will result in competitive injury. Philson v. Goldsboro Milling Co., 1998 WL 709324, at  (quotation omitted). 35 Policy considerations also weigh in our decision-making. We note that elimination of a competitive impact requirement would subvert the policy justifications for the PSA's adoption. As the Armour court noted, the main Congressional motivation for the PSA's passage was the need for specialized regulation of the many-tiered packing industry, with its unique problems. Armour, 402 F.2d at 721. Thus, Congress selected the Secretary as overseer, but established some restrictions with regard to the Secretary's authority. Congress gave the Secretary no mandate to ignore the general outline of long-time antitrust policy by condemning practices which are neither deceptive nor injurious to competition nor intended to be so by the party charged. Id. at 722. Eliminating the competitive impact requirement would ignore the long-time antitrust policies which formed the backbone of the PSA's creation. Failure to require a competitive impact showing would subject dealers to liability under the PSA for simple breach of contract or for justifiably terminating a contract with a grower who has failed to perform as promised. 36 Moreover, we do not give Chevron 6 deference to the Secretary's interpretation of Section 202(a). This court gives Chevron deference to agency interpretations of regulations promulgated pursuant to congressional authority. NLRB v. United Food and Commercial Workers Union, 484 U.S. 112, 123, 108 S.Ct. 413, 421, 98 L.Ed.2d 429 (1987). The PSA does not delegate authority to the Secretary to adjudicate alleged violations of Section 202 by live poultry dealers. See 7 U.S.C. § 193(a). Congress left that task exclusively to the federal courts. See Jackson v. Swift Eckrich, Inc., 53 F.3d 1452, 1456-57 (8th Cir.1995). The absence of such delegation compels courts to afford no Chevron deference to the Secretary's construction of Section 202(a). See, e.g., United States v. Mead Corp., 533 U.S. 218, 226-27, 121 S.Ct. 2164, 2171, 150 L.Ed.2d 292 (2001) (stating that administrative implementation of a particular statutory provision qualifies for Chevron deference when it appears that Congress delegated authority to the agency generally to make rules carrying the force of law, and that the agency interpretation claiming deference was promulgated in the exercise of that authority). Because Congress plainly intended to prohibit only those unfair, discriminatory or deceptive practices adversely affecting competition, see Philson, 947 F.Supp. at 200, a contrary interpretation of Section 202(a) deserves no deference. See Heimmermann v. First Union Mortgage Corp., 305 F.3d 1257, 1261 (11th Cir.2002) (No deference is to be given to an agency interpretation that is at odds with the plain meaning of the statute being interpreted.), cert. denied, 539 U.S. 970, 123 S.Ct. 2641, 156 L.Ed.2d 675 (2003). 7 37 In conclusion, we hold that in order to prevail under the PSA, a plaintiff must show that the defendant's deceptive or unfair practice adversely affects competition or is likely to adversely affect competition. 8 Therefore, the district court properly granted Fieldale's motion for judgment as a matter of law on the Londons' PSA termination claim because the Londons did not present any evidence at trial that Fieldale's termination of their grower contracts adversely affected or was likely to adversely affect competition. The Londons did not present any evidence as to the total number of chicken growers or buyers in the north Georgia area. The Londons did not present any evidence regarding the percentage of the chicken market Fieldale controlled. Furthermore, the Londons did not present any evidence of their or Fieldale's relative stature within the chicken industry. Accordingly, we affirm the district court's order granting Fieldale's motion for judgment as a matter of law on the Londons' PSA termination claim. 9 38
39 The Londons claimed that Fieldale breached the broiler contracts by providing poor quality and sick birds, failing to weigh the chickens accurately, and failing to provide sufficient medication and vaccinations for the flocks. The Londons did not support their claim with any reference to a specific contract provision that they allege Fieldale breached. At the close of the Londons' case, the district court granted Fieldale's motion for judgment as a matter of law on the breach of contract claim. The district court did not err in so ruling. The broiler contracts only obligated Fieldale to provide to the grower the necessary feed, vaccines, medications, and boot wash supplies for raising the birds to processing age. [Plaintiff's Ex. 36]. Contrary to the Londons' assertion, Fieldale did not have a specific contractual duty to vaccinate the birds for gumboro prior to delivery. In sum, as the district court found, the Londons did not present any evidence to support their breach of contract claim. [R. Vol. 8 p. 468]. 40 The Londons alleged that Fieldale supplied them with settlement statements that Fieldale knew to be false, and they relied on those statements in accepting the sums Fieldale paid for the broilers. The Londons claimed they were damaged as a result of their reliance on these false settlement statements. At the close of the Londons' case, the district court granted Fieldale's motion for judgment as a matter of law on the Londons' fraud claim. The district court correctly found that there was no evidence of an affirmative act or injury to support the Londons' fraud claim. Furthermore, the Londons proffered no evidence from which a jury could calculate any alleged loss with reasonable certainty. See Brooks v. Dime Saving Bank of New York, 217 Ga.App. 441, 457 S.E.2d 706, 708 (1995) (stating that a plaintiff must show that he has been damaged and he must establish the amount of [his] damages by providing the factfinder with evidence from which it can calculate the amount of loss with reasonable certainty). Accordingly, the district court properly granted Fieldale's motion for judgment as a matter of law on the Londons' state law breach of contract and fraud claims. 41
42 The Londons argue that the district court improperly granted Fieldale's motion for summary judgment on their PSA retaliation claim. The Londons contend that they presented sufficient evidence from which a jury could infer that because of Harold's adverse testimony in the racial discrimination case, Fieldale retaliated against the Londons by terminating their grower contracts. The Londons claim that they presented evidence that their flock performance was average prior to Harold's testimony; that after his testimony, their flock supervisors became increasingly critical on their service reports; that the Londons' chick quality declined and Fieldale delivered sick birds; and that the Londons were not Fieldale's worse performing growers when Fieldale terminated their contracts. 43 The district court did not err in granting summary judgment on the Londons' PSA retaliation claim. The Londons failed to provide any evidence of causation: that Fieldale terminated their contracts because of Harold's testimony in the racial discrimination case. First, the evidence shows that for the flocks where the ages of the supplying hens are available, all of the Londons' chicks came from hens between 26 and 66 weeks old, which is within industry age standards. Thus, the Londons had no evidence to support their assertion that Fieldale was purposefully supplying them with substandard chicks. Moreover, the Londons failed to show that they were singled out to receive poor chicks as a form of retaliation. See Philson, 947 F.Supp. at 201-2 (noting that providing low quality birds can violate the PSA when it is done for an illegal reason, but requiring some proof that the illegal reason was the motivation behind the decision to supply the substandard birds). 44 Second, the evidence shows that the Londons' production declined significantly in 1997 and 1998. Of their 35 flocks in that time period, only nine were above average. Thus, the Londons' below average flocks during that time frame support Fieldale's assertion that it terminated the contract with the Londons due to substandard performance. In sum, the Londons did not present any evidence showing a causal connection between the contract termination and Harold London's testimony. Hence, the district court did not err in granting Fieldale's motion for summary judgment on the Londons' PSA retaliation claim. 45
46 The Londons argue that the district court erred in granting summary judgment to Fieldale on their misweighing claims for the loss of fuel weight in transit of the birds from their Green Meadows No. 1 Farm and their Green Meadows No. 2 Farm. The two contracts that cover these farms both provided that the weighing procedure would not include any adjustment for vehicle fuel used during transportation. The Londons do not provide any case law to indicate that two contracting parties would violate the PSA by inserting a provision regarding whether fuel usage would be considered during the weighing process. Instead, they rely on a regulation promulgated by the Grain, Inspection, and Packers and Stockyards Administration, pursuant to the PSA, that requires that poultry growers be paid based on the actual weight of the live poultry. See 9 C.F.R. § 201.55. 47 Congress passed the PSA to protect farmers and growers, but Congress did not intend for the PSA to supplant the traditional principles of freedom of contract. Jackson, 53 F.3d at 1458. The Londons presented no evidence that they did not enter into these contracts voluntarily, and throughout most of their growing relationship with Fieldale, the Londons never complained about the weighing of the birds. Moreover, we find the Londons' reliance on the regulation to be unavailing because that section notes that any adjustment to the actual weight shall be explained on any statements. Fieldale did just that: it inserted contractual provisions in their grower contracts informing the Londons that no fuel adjustment would be made at weigh-in. Accordingly, the district court properly granted summary judgment to Fieldale on the Londons' fuel adjustment claims on their grower contracts for the Green Meadows Farms.