Summary of a Recent
Judicial Development in
Production Contracts

Summary Judgment Granted in Favor of Cagle Foods
Due to Insufficient Evidence

John Pesek
National AgLaw Center Research Associate

Summary of Decision

In Mims v. Cagle Foods JV, LLC, 148 Fed. App'x 762 (11th Cir. 2005), Mims brought an action against Cagle Foods alleging violations of the Packers and Stockyards Act (PSA), the Agricultural Fair Practices Act (AFPA), and the Georgia Racketeer Influenced and Corrupt Organizations Act (RICO Act). The court granted summary judgment for the defendant on all counts.

Background

Cagle, a provider of boiler chickens, negotiated with Mims to provide all feed and medication in return Mims' care for the boilers during their "grow-out" phase. Id. at 765. Per this contract, the grower was compensated when the fully grown chickens were weighed at Cagle's factory. Id. Mims worked for Cagle from 1994 through 2001. Id. Pursuant to their contract, Mims agreed to build four chicken houses, but the contract did not state the number of chickens, flocks per year, types of birds, or expense figures. Id. In 1998, Mims became active with the United Poultry Growers Association (UPGA) and in 1999, Mims failed to sign a new contract that would have given him a pay increase because the new contract had a provision that all disputes would be settled through arbitration. Id. In 1999, Mims agreed to a contract with Tyson, and Cagle started to send Tyson its service reports, which showed that Mims was not meeting expectations. Id. Mims had an opportunity to respond to these reports but failed to do so. Id.

In 2000, Mims placed his farm on the market for sale, but he planned to continue to work for Tyson. Id. at 766. He contacted a Cagle employee and gave notice that he no longer wished to continue to grow chickens. Id. Mims later changed his mind and wanted to be put back on the placement schedule, and Cagle agreed to put him back on the schedule as long as he made some repairs to his facilities. Id. After the next placement of boilers with Mims, Cagle terminated its contract and then informed Tyson that no more birds would be placed with Mims; therefore, Tyson terminated its contract with Mims. Id.

Arguments

Mims brought an action claiming that Cagle Foods had violated the PSA, the AFPA, and the Georgia RICO Act. Id. at 764. Mims argued that he presented sufficient evidence to show: 1) Cagle had provided him with sick and unhealthy birds in retaliation for joining the UPGA in 1998 and for refusing to sign the arbitration agreement; 2) Cagle delayed feed deliveries in retaliation; 3) Cagle engaged in dishonest weighing practices that damaged the entire course of their relationship; and 4) the arbitration clause offered by Cagle was unconscionable and constituted a "bait and switch." Id. at 766.

Analysis and Holdings

Regarding the first claim, that Mims received several sick birds after he joined the UPGA, the court noted that Mims failed to note any sick birds on his chick delivery report. Id. at 767. Also, the court noted that Mims failed to show by sufficient evidence that Cagle targeted his farm to receive sickly birds. Id. The second argument was that Cagle delayed feed and chick deliveries as retaliation. Id. The only evidence to support this claim was an affidavit from a former feed mill manager who stated that feed credit tickets were changed to either help or hurt growers, and the manager also stated that they would use this tactic to pressure the grower into signing the arbitration clause. Id. The court found that there was no jury question on this issue because the affidavit did not show any evidence of retaliation against Mims. Id. Another problem was that Mims failed to record the number of times in which he ran out of feed, and the only specific instance that he could remember occurred before he joined the association. Id.

The third argument dealt with unfair weighing practices, alleging that Cagle was in violation of 9 C.F.R. § 201.108-1(e)(4), which allows growers access to facilities to view weighing. Id. at 768. Under Cagle's process, the grower was required to schedule an appointment to view the weighing of the birds. Id. The court held that nothing in the statute stated that requiring an appointment goes against the statute; therefore, Cagle was not in violation of the statute. Id. Mims never requested an appointment time to view the weighing of his birds. Id. The final argument alleged that the arbitration agreement constituted a "bait and switch." Id. Mims argued that he was denied a pay increase in 1999 because of his refusal to sign the arbitration agreement, but the court held that nothing in his original contract required annual pay increases. Id. at 769.

The court held that Mims failed to prove his fraud claims because he only had a hunch that his birds weighed more than Cagle was paying him. Id. The court held that the Georgia RICO Act claim and the AFPA claim failed to create a genuine issue of material fact for the same reasons as for his fraud claim. Id. The court held that the promissory estoppel claim failed because Georgia law did not allow promissory estoppel for pre-contractual promises when the contract expressly canceled those promises. Id. at 770. The court further held that the breach of contract claim failed because Mims failed to show which contract provision was breached. Id.

The case was decided on June 15, 2005.