Court Opinion

ID: 9471659
Source: CourtListenerOpinion
Date Created: 2023-08-05 03:38:05.887085+00
Date Added: 2024-06-11T17:42:31.296530
License: Public Domain

BARRETT, Circuit Judge,
concurring in part and dissenting in part:
I agree with the majority opinion holdings that (a) plaintiffs-appellees (Holly Sugar Corp.) have standing to challenge the agreement between the association and its members, (b) the trial court did not commit prejudicial error by consolidating the preliminary injunction hearing with the trial on the merits, and (c) the trial court’s findings are not adequate for purposes of review on significant, dispositive issues. For example, the majority infers (and perhaps properly so) that the district court implicitly found the marketing agreements between the Association and its alleged members to be valid. That, however, was a hotly-contested issue and one pivotal in the case. It requires a definitive, specific finding.
I wish to make it clear that I make no determination involving the merits of the 1983 sugar beet contract dispute between Holly Sugar and the Goshen County Beet Growers Association. It is obvious from the record that “bad blood” has existed because the beet-growing members of the Association were required, under the 1982 contracts, to absorb considerable losses resulting from the sale of beets from an early 1982 frost. ■ The growers and the Association do not believe that Holly Sugar dealt fairly in requiring the beet growers to shoulder the losses. This tension existed when the 1983 contract negotiations commenced. The Association, in an obvious effort to recoup for its members’ losses in 1982, argued that the 1983 proposed contract by Holly Sugar was designed to “shift” a large number of the sugar beet dollars rightfully due to the growers into Holly Sugar’s coffers, amounting to about *571one million dollars. Holly Sugar counters with the contention that identical contracts have been executed by the neighboring Platte County Beet Growers Association and other associations for sales of sugar beets to Holly Sugar plants at Worland, Wyoming, and Sidney, Montana.
The district court made several significant findings which are not controverted. The court found that at the date of the hearing, the hour was late for the growers to plant beets and that “[Hjolly Sugar and the Association have reached an impasse in the 1983 contract negotiations and all attempts at settlement or agreement have been unsuccessful.” [R., Vol. I, p. 42] (emphasis added). Further, the trial court found, inter alia: “The contract which is being offered by Holly Sugar is identical to the Holly contract approved by beet growers in Platte County, Wyoming, the Big Horn Basin in Wyoming and two beet growing areas in Montana. Furthermore, the Holly contract is better for the beet growers than that contract offered by a competing factory in the area.” [R., Vol. I, p. 43].
I must dissent from the majority’s opinion reversing the decision of the trial court and remanding with instructions to dismiss the action. I would remand for further proceedings to determine the validity of the marketing agreements between the Association and its members and the right of the Association members to withdraw from the marketing contract, without penalties, and become, as some beet grower members have become, non-voting members of the Platte County Beet Growers Association. In addition, I cannot agree with the majority’s conclusion that there is no antitrust violation as a matter of law. The law is simply not that open and shut.
The Association contended, and the majority opinion agreed, that Holly Sugar has not alleged conduct or presented evidence at trial which establishes an antitrust violation chargeable to the Association. The record is not sufficiently complete to justify that legal conclusion. I agree that section 6 of the Clayton Act and section 1 of the Capper-Volstead Act exempt agricultural cooperatives from the scope of the antitrust laws except upon proof that the cooperative attempts to monopolize or engages in “predatory practices.” If in fact the Association “members” who entered into contracts with Holly Sugar individually or as non-voting members of the adjoining Platte County Beet Growers Association after the last vote of the Association was taken on May 4, 1983, were not bound by the agreement with the Association because the contracts were not duly executed or otherwise binding on them for passage of time, the Association’s attempt to compel all members to accede to the Association’s 1983 no-contract position with Holly Sugar might constitute an illegal monopoly in restraint of trade. If so, the Association was without power under § 1 of the Capper-Volstead Act, 7 U.S.C. § 291, to fix the price at which its members’ beets are sold. The Association’s actions and practices must not only be legally authorized, but they must also have a legitimate business justification.
Cooperative associations, like the Goshen County Beet Growers Association, have many of the rights and powers of labor unions. See 18 Am.Jur.2d, Cooperative Associations § 21. A basic element of impasse is that it is reached only when a breakdown in bargaining occurs after good-faith negotiations. NLRB v. Crompton-Highland Mills, Inc., 337 U.S. 217, 69 S.Ct. 960, 93 L.Ed. 1320 (1949). Upon impasse, the duty to bargain is suspended. The issue of whether the Association, through its officers and negotiators, fairly represented the interest of the beet grower members involves the same duty as that imposed on labor unions to bargain in good faith on behalf of their members. See Vaca v. Sipes, 386 U.S. 171, 87 S.Ct. 903, 17 L.Ed.2d 842 (1967). Just as an employer in a multi-employer bargaining unit may be justified in withdrawing from the bargaining unit when it is substantially fragmented and the employer is subject to extreme financial pressure, Bonanno Linen Service v. NLRB, 454 U.S. 404, 102 S.Ct. 720, 70 L.Ed.2d 656 (1982), so, too, may the individual beet *572grower members of the Association have been likewise justified in contracting individually with Holly Sugar following the impasse in negotiations. While impasse, per se, is not a legitimate basis for withdrawal from a bargaining unit, Harding Glass Industries, Inc. v. NLRB, 672 F.2d 1330 (10th Cir.1982), the likelihood of extreme financial hardship threatening a member’s existence creates the “unusual circumstances” justifying withdrawal upon impasse.
The right of an individual beet grower member of the Association to freely enter into a contract with Holly Sugar for the sale of his 1983 sugar beets may be justified because the absolute impasse and the refusal of the Association to release him are detrimental to his economic survival. Counsel for the Association acknowledged at the trial court hearing that “at this late date it’s questionable whether we (the Association’s members) could raise profitable beets.” [R., Vol. III, p. 17]. The date, to be sure, was late. To many members, the issue may then have been one of economic survival. To the same extent, Holly Sugar was facing the closure of its Torrington plant. This Court adopted the “unusual circumstances” exception laid down in Bonanno Linen, supra, in NLRB v. Custom Sheet Metal & Service Co., 666 F.2d 454 (10th Cir.1981). We there held that an employer could lawfully withdraw from a multiemployer bargaining unit shortly before a contract was reached in view of evidence that to remain in the bargaining group, following the union’s refusal to modify the unit contract, would subject the company to extreme financial hardship which threatened its existence as a viable business entity-
The member beet growers were faced with the Association’s threat of suit and the possibility of substantial penalties if they independently signed a 1983 contract with Holly Sugar or if they joined the Platte County Growers Association. Failure by some of the members to contract and grow beets may have resulted in the loss of any marketable crop — a personal economic disaster for many member growers. The same economic disaster faced the Holly Sugar plant at Torrington. To effectively operate the plant, Holly Sugar needed a 1983 commitment of some 17,500 to 18,000 acres.
The case should be remanded for further proceedings.