Summary of a Recent
Judicial Development in
Production Contracts

District Court Grants Part of Defendant's Motion for Judgment
as a Matter of Law, Denies Request for a New Trial

John Pesek
National AgLaw Center Research Associate

Summary of Decision

In London v. Fieldale Farms Corp., No. Civ. 2:01-CV-202-WCO, 2003 WL 23750660 (N.D. Ga. Dec. 22, 2003), the United States District Court for the Northern District of Georgia held that the defendant was entitled to judgment as a matter of law on the plaintiffs' Packers and Stockyards Act (PSA) termination claim, but denied its motion as to the fuel adjustment and wet bird claims, and also denied the defendant's motion for a new trial.

Background

The plaintiffs brought several claims against the defendant for violations of the PSA, as well as state claims alleging breach of contract and fraud. Id. at *1. At the close of the plaintiffs' evidence, the defendant made a motion for judgment as a matter of law as to the plaintiffs' PSA wet bird claims, PSA fuel adjustment claims, PSA termination claim, and each of their state law claims. See id. The court granted the motion in part and held that the defendant was entitled to judgment as a matter of law concerning the PSA wet bird claims that arose prior to November 20, 1997; each of the fuel adjustment claims related to the J.W. Peck farm; and each of the state law claims. Id. After the close of the evidence, the defendants made another motion for judgment as a matter of law, but the trial judge denied this motion and the case went to the jury. Id. The jury returned a verdict for the plaintiffs in the amount of $164,000 on the PSA termination claim and $257.00 on the improper weighing claims. Id. The defendant appealed. Id.

Arguments

The defendant argued that the court should reverse the trial court's ruling, which allowed several of the plaintiffs' claims to survive, and it asked the court to dismiss the plaintiffs' claims by granting judgment as a matter of law on all claims. See id. The defendant motioned for a new trial. See id. at *4.

Analysis and Holdings

The court denied part of the defendant's motion for judgment as a matter of law for the reasons articulated by the trial judge. See id. at *1. Regarding the plaintiffs' claim for termination, the defendants argued that the plaintiffs should be required to show that the termination had an adverse effect on competition, which the defendant claimed is a prerequisite to the PSA. Id. The plaintiffs relied on two cases to support their proposition that they did not need to show an adverse effect on competition. See id. at *2 (citing Spencer Livestock Com. Co. v. Dep't of Agric., 841 F.2d 1451 (9th Cir. 1988); Wilson & Co. v. Benson, 286 F.2d 891, 895-96 (7th Cir. 1961)). The court explained that termination without economic justification could have an adverse effect on competition. Id. (citing Baldree v. Cargill, Inc., 758 F. Supp. 704, 706-06 (M.D. Fla. 1990)). The court ultimately held that the plaintiffs had not presented evidence to show the competitive effects that would result from the termination without economic justification; therefore, the defendant was entitled to judgment as a matter of law as to the termination claim. Id. at *3. The court then denied the motion with regard to the fuel adjustment and wet bird claims. See id.

The court noted that a new trial may be granted when it is clear that the verdict is against the clear weight of the evidence, the damages are excessive, or when the court determines that the trial was unfair. See id. at *4. The court held that the evidence did not sway in either party's favor enough to warrant a new trial, and there was no concern that if the verdict was upheld that it would result in a miscarriage of justice. Id. Therefore, the court denied the defendant's motion for a new trial. Id.

The case was decided on December 22, 2003.