Cargill, Incorporated v. Kroeger et al

Filing 228

MEMORANDUM AND ORDER - Except as noted on the record, Cargill's motion for judgment as a matter of law made at the conclusion of all the evidence is granted. In particular, Cargill's motion for judgment as a matter of law particularly re garding causation and target yields is granted. The defendants' counterclaims predicated upon manganese toxicity or target yields are dismissed with prejudice. All affirmative defenses predicated upon manganese toxicity or target yields are likewise dismissed with prejudice. A formal judgment will be entered later and at the appropriate time after the jury has considered the remaining issues. Ordered by Senior Judge Richard G. Kopf. (GJG)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
)
)
)
Plaintiff,
)
)
V.
)
)
KURT KROEGER, KATHY
KROEGER, and H & M FARMS, INC., )
)
)
Defendants.
)
CARGILL, INCORPORATED,

8:11CV81

MEMORANDUM AND ORDER

I have orally granted Cargill’s motion for judgment as a matter of law regarding a
variety of matters. Contemporaneous with my oral decision, I more fully explain my
reasoning in this memorandum.
The Contract and Affirmative Defenses Regarding Target Yields
H&M Farms, Inc., has judicially admitted, and it is undisputed, that there existed “an
express contract for 2010 crop inputs,” “that there is an express contract evidencing an
intent to be bound” by H&M Farms, Inc., and that the defendants do “not deny the
existence of a contract for 2010 crop inputs for H&M Farms . . . .” (Filing no. 136 at pp.
8-9.) I relied upon those judicial admissions when I ruled on the summary judgment
motions. (E.g, filing no. 156 at pp. 6, 10.) It is also undisputed that H&M Farms, Inc.,
failed to pay Cargill after Cargill provided the 2010 crop inputs and services.
After giving the defendants the benefit of every reasonable inference to the contrary,
no reasonable jury could come to any other decision save for the following:
*

One contract (consisting of a variety of documents and a course of dealing)
existed between Cargill and H&M Farms, Inc., whereby Cargill agreed to
provide crop inputs and services for 2010 and H&M Farms, Inc., agreed to
pay Cargill for those crop inputs and services.

*

H&M Farms, Inc., breached that contract because no payment has been made
to Cargill for the crop inputs and services that Cargill in fact provided.

*

Cargill did not warrant, represent or guarantee that any “target” yields would
be met during 2010, and H & M Farms, Inc., was not entitled to withhold
payment because of any alleged performance issues or alleged
misrepresentations.

*

The nutrients supplied by Cargill were all fit for the ordinary purpose for
which they were intended. For example, there is no dispute that manganese
sulfate is a nutrient for corn and there is no dispute that Cargill in fact
supplied manganese sulfate.

*

Cargill substantially or fully performed its side of the bargain.

Regarding affirmative defenses based on “target” yields, no reasonable jury could
conclude that the yield goals established jointly between Mr. Kroeger and a representative
of Cargill were warranties or representations by Cargill that the goals would in fact be
achieved. Indeed, there is no evidence that the Kroeger farming operation had ever yielded
those target goals in the past. In fact, the evidence is to the contrary. (E.g., Exhibit 97D
(“Comparison of Howard County, Nebraska and H&M Farms, Inc.”) (Column entitled
“H&M Farms(a)” deriving data from defendants’ crop insurance records). Consequently,
it would be entirely unreasonable for anyone to conclude that the yield goals were
warranties or representations.
Causation
I now address the issue of causation from the perspective of the defendants’ claims.
I find and conclude that no reasonable jury could determine that Cargill’s application of
manganese resulted in manganese toxicity and a reduction in crop yields on the farm
operated by defendants. This is so after giving the defendants the benefit of any and every
reasonable inference to the contrary. In other words, sufficient evidence of causation is

-2-

lacking for the counterclaims and affirmative defenses that are based upon the presence of
manganese toxicity.1
After hearing the entirety of the evidence, I arrived at this decision for a variety of
reasons. The following six points illustrate some, but not all, of the reasoning that supports
this ruling:
*

It is undisputed that the defendants’ farm has consistently underperformed
the county average for corn yields.

*

The defendants’ farm consists to a significant degree of soils and landscape
that make the growing of corn relatively difficult when compared to other
farms in the county.

*

Setting to one side the instant case, there has never been a case of manganese
toxicity in corn in Nebraska the existence of which has been established to
a reasonable degree of scientific certainty. Essentially, manganese toxicity
in corn is unheard of in Nebraska.

*

The competent evidence establishes that (a) soil and corn tissue samples were
taken from the defendants’ farm during the relevant growing season and at
or after harvest, (b) those soil and tissue samples were tested by Dr. Ward,
a highly qualified scientist with specific and ongoing experience in assessing
toxicity levels and other pertinent levels in growing crops, and (c) that testing
failed to reveal a toxic level of manganese or anything approaching a toxic
level. In this regard, competence evidence establishes that manganese
toxicity in corn tissue is not likely to be present unless manganese is found

1

To the degree that defendants’ now claim some other nutrient was also at fault, the
Rule 50 motion is granted also as to any such claim. Throughout the preparation of this
case and at trial the defendants’ focus was on manganese toxicity and a belated claim that
some other nutrient was at fault is of the “Hail Mary” variety and unsupported by the
evidence.

-3-

at a level approaching 300 parts per million. In that same vein, competent
evidence proves that manganese levels in plants may be harmful when soil
tests reveal manganese at 50 parts per million or greater. Parenthetically, the
only evidence of a soil test that defendants tried to present was a soil sample
that had literally been baked in Mr. Kroeger’s home oven, and that test was
excluded for obvious reasons.
*

The defendants rely upon a “use guide” for Man-Grow 32G manganese
sulfate for “in-furrow” application. Even ignoring the fact that the
manganese here was broadcast and not applied in the furrow, that guide
specifically states: “Always follow soil and tissue test[s].” (Exhibit 85
(underline in original)). The defendants ignore this direction when it comes
to the soil and tissue testing conducted by Dr. Ward.

*

An unbiased employee of the University of Nebraska, Lincoln established a
test plot at the University’s agricultural testing farm in an effort to address
the defendants’ concerns about manganese toxicity. She was unable to
induce manganese toxicity in corn after applying a different although
comparable form of manganese at various rates roughly comparable to or
above the rate applied by Cargill. Recognizing their dilemma, the defendants
tried to respond with a test plot of their our own, but that test plot was
excluded because it was conducted after discovery closed.

A few words about the defendants’ evidence is in order. It is not my job to judge
the credibility of the witnesses or the relative strength of their testimony in reaching this
decision and I have not done so. But, for a variety of objective reasons, the competent
evidence is insufficient to get the defendants to the jury on the issue of causation. In the
face of contrary soil and tissue sampling data derived from the allegedly impacted corn
showing the absence of manganese toxicity, it far too speculative to assign manganese
toxicity as a cause for yield reductions using only a “differential diagnosis” or “rule out”
method. This is particularly true where there are no test plot results showing that
manganese toxicity can be induced in corn at the rates applied by Cargill. Finally, the fact
(if it is one) that manganese may not have been needed on the farm in question or in

-4-

Nebraska soils more generally, does not establish that the application of manganese
resulted in manganese toxicity or any other harm–those are two completely different
scientific questions.
Conclusion
In closing, I compliment counsel for the defendants. Against strong odds and very
talented opposing counsel, the lawyers for the defendants pressed the matters discussed
herein vigorously and with great skill. Nothing they did or failed to do played a part in this
ruling. Sometimes the facts are simply not there and the law is against you, and this is one
of those cases.
IT IS ORDERED that:
1.

Except as noted on the record, Cargill’s motion for judgment as a matter of
law made at the conclusion of all the evidence is granted.

2.

In particular, Cargill’s motion for judgment as a matter of law particularly
regarding causation and target yields is granted. The defendants’
counterclaims predicated upon manganese toxicity or target yields are
dismissed with prejudice. All affirmative defenses predicated upon
manganese toxicity or target yields are likewise dismissed with prejudice.

3.

A formal judgment will be entered later and at the appropriate time after the
jury has considered the remaining issues.

DATED this 26th day of September, 2012.
BY THE COURT:
Richard G. Kopf
Senior United States District Judge

-5-