Summary of a Recent
Judicial Development in
Packers & Stockyards Act

Disputed Facts Preclude Summary Judgment on
Packers & Stockyards Act Claim

Walt McCarter
National AgLaw Center Research Associate

Summary of Decision

In Milton Abeles, Inc. v. Creekstone Farms Premium Beef, LLC, No. 06-CV-3893 (JFB)(AKT), 2009 WL 875553 (E.D.N.Y. Mar. 30, 2009), the United States District Court for the Eastern District of New York held that 7 U.S.C. § 192 of the Packers and Stockyards Act did not require a showing of unfair trade practices if a packer's refusal to pay a supplier of meat adversely affects competition, but denied both parties' motions for summary judgment because there were disputed factual issues regarding whether the parties had entered into a joint venture partnership agreement, and thus whether the defendant breached that agreement.

Background and Arguments

Milton Abeles, Inc. ("Abeles") brought this action against Creekstone Farms Premium Beef, LLC ("Creekstone"), asserting claims of breach of a joint venture agreement, breach of contract, breach of fiduciary duty, and quasi-contract, arising from Creekstone's alleged breach of an agreement between the parties. Id. at *1. Abeles alleged that the parties had formed a joint venture partnership wherein Abeles was to promote and sell Creekstone's beef. Id. at *2. It claimed that Creekstone frequently supplied its products late and with significant shortages. Id. at *3. Abeles subsequently learned that Creekstone was selling beef through another distributor, which it claimed was a violation of their agreement, and thereafter discontinued its orders of Creekstone beef and refused to pay for balances outstanding. Id. Creekstone responded that no joint venture or exclusive distributorship agreement existed, and sought to recover for the outstanding balances. Id. Specifically, Creekstone argued that there was no intent to form such a venture, that the parties never agreed to share profits and losses, and that the alleged terms were "so indefinite as to render the contract unenforceable." Id. at *3-4. Both parties moved for summary judgment. Id. at *1.

Analysis and Holdings

The court found some evidence in support of both parties' contentions and several disputed factual issues regarding intent and the alleged terms of the agreement. Id. at *5-8. Therefore, the court denied the parties' cross-motions for summary judgment on Abeles' claims. Id. at *8. The court likewise denied the parties' summary judgment motions on Creekstone's counterclaims for goods sold and delivered because there were several disputed facts, so "[a] reasonable jury could conclude, based on the evidence presented by both parties, that Creekstone breached the contract established by each individual invoice." Id. at *18.

Regarding Creekstone's Packers and Stockyards Act claim, the court held that 7 U.S.C. § 192, which prohibits a packer's refusal to pay a supplier of meat, does not require a showing that failure to pay for meat constitutes a deceptive or unfair trade practice if it also adversely affects competition, and was therefore applicable to the parties' transactions. Id. at *19-21. However, the court denied the parties' motions for summary judgment on that issue as well, because there were "genuine issues of material fact regarding whether Creekstone's allegedly late payments were part of a 'course of dealing' and whether its current outstanding balance [was] offset by damages flowing from the allegedly breached joint venture and/or exclusive distributorship agreement." Id.

The case was decided on March 30, 2009.