Volentine et al v. Raeford Farms of Louisiana L L C

Filing 16

MEMORANDUM RULING re 11 MOTION to Remand: For the reasons stated in the Memorandum Ruling issued this date, Plaitiffs' Motion to Remand (Doc 11) will be granted by separate order. Signed by Magistrate Judge Mark Hornsby on 2/24/10. (crt,Cassanova, M)

UNITED STATES DISTRICT COURT W E S T ER N DISTRICT OF LOUISIANA S H R E V EP O R T DIVISION

D A N VOLENTINE, ET AL VERSUS R A E F O RD FARMS OF LOUISIANA, L L C , ET AL

C I V I L ACTION NO. 09-cv-1865 J U D G E HICKS M A G I S T R A T E JUDGE HORNSBY

M E M O R A N D U M RULING I n t r o d u c t io n D a n Volentine was a farmer in Claiborne Parish. He entered into a Hatching Egg P r o d u c t io n Contract with Raeford Farms of Louisiana, LLC. The contractual relationship e n d e d . Volentine and his wife ("Plaintiffs") filed suit in state court against Raeford, allege dly related companies, and two company officials. Plaintiffs asserted only state law c l a i m s , but Defendants removed the case based on an assertion that a special venue provision in the Packers and Stockyard Act ("PSA") provided a right to remove the case and, in the a l t er n a t iv e , that Plaintiffs had alleged claims that arise under the PSA. Plaintiffs have filed a Motion to Remand (Doc. 11) that is now before the court. N o Federal Question Jurisdiction T h e court will first address Defendants' assertion that Plaintiffs have alleged claims t h a t arise under the federal PSA. Plaintiffs' state court petition alleges that Mr. Volentine m o r t g a g e d his family home and land to purchase the facilities necessary to house chickens a n d produce eggs in accordance with the contract. He alleges that Raeford officials Samuel

L eN arz and Kelly Garris developed personal animosity toward him and acted in bad faith. P l a i n ti f f s allege that the Raeford officials cited deficiencies in their operation and threatened to withhold the next flock of chickens. Plaintiffs allege that they spent more than $100,000 to upgrade their operations, but company officials continued to find fault. P l a i n ti f f s allege, for example, that Raeford Farms allegedly refused shipment of c h i c k e n s because Plaintiffs did not implement a telephone alarm system that would alert Mr. Volentine by cell phone if there was a power failure in a chicken house. Plaintiffs allege t h a t they pressed to have the alarm installed, but they discovered that Raeford officials told t h e president of the alarm installation company that the Volentine chicken houses were not a priority in receiving this system. Plaintiffs allege that Raeford officials similarly attempted to delay the installation of a new feed system. Plaintiffs allege that Raeford eventually terminated their contract and refused to allow Mr. Volentine to assign the contract to his son (because Raeford officials also had personal i s s u e s with the son). Plaintiffs allege that the termination of the contract caused them to lose t h e i r family home and land, and force them to live with family due to economic hardship. P l a i n t i f f s ' petition relies solely upon state law causes of action that are set forth in spec ific counts: Breach of contract; tortious interference with contractual rights; intentional i n t e rf e r e n c e with business relations; and the Louisiana Unfair Trade Practices Act. It does n o t appear the petition makes any reference to the PSA or any other federal law. Plaintiffs

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d e n y that the petition includes any such allegations, and Defendants have not pointed to any s pe ci fi c invocation of federal law. De fend ants nonetheless argue that Plaintiffs have asserted claims that arise under the PSA because the facts set forth in the petition could state claims under the PSA. Under the w e l l - p le a d e d complaint rule, a federal court has original or removal jurisdiction only if a f e d e r a l claim is presented on the face of the well-pleaded complaint. There is no federal claim presented if the plaintiff properly pleads only a state law cause of action. And the poss ibility that a plaintiff could have asserted a federal claim does not permit federal question remo val. A plaintiff is master of his complaint and may generally allege only a state law c a u s e of action even where a federal remedy is available. Bernhard v. Whitney National B a n k , 523 F.3d 546, 551 (5th Cir. 2008). Plaintiffs did not allege a federal claim and relied sole ly on state law. An exception to the well-pleaded complaint rule is the artful pleading doctrine. Under t h a t principle, removal is permitted even though the plaintiff has relied exclusively on state l a w if there is a federal law that completely preempts the plaintiffs' state law claim. Bernard, 5 2 3 F.3d at 551. Defendants state in their memorandum that they "agree (with Plaintiffs) that t h e PSA does not completely preempt State law." Doc. 13, p. 9. Accordingly, there is no bas is for removal based on the traditional principles of federal question jurisdiction.

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P S A Venue Provision De fend ants concede that the PSA does not completely preempt state law, but they a r g u e that a provision of the PSA requires this action be heard in federal court regardless of g o v e r n i n g law. They cite 7 U.S.C. § 197b, which provides: ( a ) Location of forum T h e forum for resolving any dispute among the parties to a poultry growing a r r a n g e m e n t or swine production or marketing contract that arises out of the a r r a n g e m e n t or contract shall be located in the Federal judicial district in w h i c h the principle (sic) part of the performance takes place under the a r r a n g e m e n t or contract. (emphasis added) ( b ) Choice of law A poultry growing arrangement or swine production or marketing contract may s p e ci f y which State's law is to apply to issues governed by State law in any d is p u t e arising out of the arrangement or contract, except to the extent that d o i n g so is prohibited by the law of the State in which the principal part of the perfo rman ce takes place under the arrangement or contract. T h e PSA defines a poultry growing arrangement as "any growout contract, marketing agree men t, or other arrangement under which a poultry grower raises and cares for live poultry for delivery, in accord with another's instructions, for slaughter." 7 U.S.C. § 182(9). T h e term "poultry grower" used in that definition is defined in Section 182(8) as a person e n g a g e d in the business of "raising and caring for live poultry for slaughter by another," whe ther the poultry is owned by the grower or another. T h e parties arguments focus on whether the contract at issue is a "poultry growing arra n gem ent" within the meaning of the statute. Plaintiffs contend that the contract for

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p r o v i d in g hatching eggs does not meet the definition because it did not call for Plaintiffs to p r o v i d e live poultry for slaughter. Defendants argue that the contract falls under the statutory d e f i n it i o n because spent hens were gathered for slaughter, and the hatching eggs were inten ded to eventually provide poultry for slaughter. All parties assume that this case would be removable by virtue of the PSA venue s t a tu t e if the contract fits the definition of a poultry growing arrangement. The court does n o t believe that to be the case. The venue provision is found within Part A of Sub-chapter II of the PSA. The Sub-chapter makes it unlawful, for example, for any live poultry dealer to use any deceptive or unjustly discriminatory practice, manipulate or control prices, or create a monopoly. 7 U.S.C. § 192. The Sub-chapter also contains a provision that creates a statutory trust on poultry and derived poultry products for the benefit of persons who make cash sales of poultry to live poultry dealers. The statute is intended to avoid the burden on c o m m e r c e of certain financing arrangements that grant security interests in poultry. 7 U.S.C. § 197. The choice of law and venue statute cited by Defendants comes near the end of the S u b - c h a p t e r and provides that the forum for resolving any dispute among the parties to a poultry growing arrangement shall be the federal district in which the principal part of the perfo rman ce takes place under the contract. T h e venue provision at issue was enacted in 2008, and the court has not located any j u r is p r u d e n c e that has addressed whether it gives rise to the right to remove a case from state court that asserts only state law claims but happens to arise out of a poultry growing

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a r r a n g e m e n t. The court finds that the most reasonable reading of the statute is that it does n o t give rise to the right to effect such removals. It would be fairly extraordinary for C o n g r e s s to allow the removal of state court claims when there is not complete preemption o r any other grounds for the exercise of subject-matter jurisdiction, and such an extraordinary p r o v i s io n should be written in express terms. There is no such clear expression in the statute a t issue. The most reasonable reading of the statute is that it provides a mandatory venue for c a s e s brought pursuant to the PSA (and Plaintiffs do not pursue such a claim in this case) that r e g ard a dispute among the parties to a poultry growing arrangement. The provision is d e s i g n e d to locate venue where the principal part of the performance takes place, which favors the farmer or producer, and protects him from having venue secured and/or moved to t h e far-away location of the headquarters of large corporations that are parties to the contract. B e c a u s e the court does not read Section 197b to permit removal of the state law claims p r e se n t e d in Plaintiffs' petition, it need not reach whether the contract at issue is a poultry g r o w i n g arrangement within the definitions found in the PSA. For these reasons, Plaintiffs' M otion to Remand (Doc. 11) will be granted by separate order. T H U S DONE AND SIGNED in Shreveport, Louisiana, this 24 th day of February, 201 0.

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