United States District Court, N.D. Alabama, Middle Division
MEMORANDUM OPINION AND ORDER
ANNEMARIE CARNEY AXON, UNITED STATES DISTRICT JUDGE
Connie Buttram owns Plaintiff Breaking Free, LLC
(“Breaking Free”). Plaintiffs are contract
poultry growers for Defendants JCG Foods of Alabama, LLC
(“JCG”), Koch Meat Co., Inc., and Koch Foods,
Inc. (collectively “Koch”). Plaintiffs allege
that Defendants prevented them from growing chickens in a
fair and profitable manner. Plaintiffs filed this lawsuit,
asserting federal claims against Defendants for violations of
the Packers and Stockyards Act (“PSA”) and the
Agricultural Fair Practices Act (“AFPA”).
Plaintiffs also assert claims under Alabama state law for
fraud, breach of contract, breach of the covenant of good
faith and fair dealing, and negligent, willful, and reckless
case is before the court on Defendants' motions to
dismiss. (Doc. 11; Doc. 25). Defendants seek dismissal of
Plaintiffs' PSA claim and their state law claims for
fraud, breach of the covenant of good faith and fair dealing,
and negligent, willful, and reckless misrepresentation.
Defendants also ask the court to dismiss Plaintiffs'
request for consequential and punitive damages.
reasons explained below, the court GRANTS IN
PART and DENIES IN PART the motions
stage, the court must accept as true the factual allegations
in the complaint and construe them in the light most
favorable to the plaintiff. Butler v. Sheriff of Palm
Beach Cty., 685 F.3d 1261, 1265 (11th Cir. 2012). The
court also may consider documents attached to a motion to
dismiss if it is central to the plaintiff's claims and
the authenticity of the document is not challenged. Day
v. Taylor, 400 F.3d 1272, 1276 (11th Cir. 2005).
Defendants attach to their motions to dismiss a copy of one
of Plaintiffs' contracts with JCG Foods and a letter from
Defendants' counsel to Plaintiffs' counsel. (Doc.
11-1; Doc. 11-2; Doc. 25-1; Doc. 25-2). The documents are
central to Plaintiffs' claim, and Plaintiffs have not
challenged their authenticity. Therefore, the court's
description of the facts incorporates Plaintiffs'
allegations and the content of the documents attached to
Defendants' motions to dismiss.
operate a poultry processing plant in Collinsville, Alabama.
(Doc. 1 at ¶ 12). Defendants utilize poultry growing
arrangements where poultry farmers or independent contractors
known as growers care for poultry pursuant to instructions
provided by Defendants. (Doc. 1 at ¶ 12).
operate a poultry growing farm in DeKalb County, Alabama.
(Doc. 1 at ¶¶ 1-2, 13). Ms. Buttram's husband,
Jonathan Buttram, lives on the farm with her. (Doc. 1 at
¶ 13). Ms. Buttram and Mr. Buttram are members of the
Alabama Contract Poultry Growers Association
(“ALCPGA”), and both have served as officers of
the organization. (Doc. 1 at ¶ 13).
2005, Koch contacted Ms. Buttram about growing poultry, and
Koch personnel stated that upon the company's approval of
poultry facilities, Koch “would place birds in the
facilities and would enter into a poultry growing arrangement
with [Ms.] Buttram for the production of broilers.”
(Doc. 1 at ¶ 15). Koch personnel also promised Ms.
Buttram “that as long as she grew a good bird, she
would continue to receive baby chicks from Koch.” (Doc.
1 at ¶ 15).
allege that “JCG's and Koch's representations
that [Ms.] Buttram would continue to receive chickens was the
primary inducement for [Ms.] Buttram to enter into the
agreement with JCG and Koch as well as to expend funds to
improve her chicken houses.” (Doc. 1 at ¶ 17).
Plaintiffs also allege that JCG and Koch “knew that
their representations to [Ms.] Buttram that she would
continue to receive chickens as long as she grew good birds
were false and were intended to induce [Ms.] Buttram to
improve her facilities on at least five (5) different
occasions at her expense and to continue to contract with JCG
and Koch.” (Doc. 1 at ¶ 18).
unclear from the complaint what the relationship is between
JCG and Koch. It is also unclear from the complaint when
Plaintiffs first contracted with Defendants or how many total
contracts were signed, but the complaint refers to two
specific agreements. Plaintiffs entered a contract with JCG
titled Broiler Production Agreement (“BPA”).
(Doc. 1 at ¶ 11). The complaint does not state when the
BPA was executed or how long it was in effect. According to
Plaintiffs, pursuant to the terms of BPA,
JCG and Koch supply the chicks, feed, medicine, and other
necessary supplies to the growers (Plaintiffs). The growers
care for the chicks for approximately 5 to 6 weeks. Growers
own their farms, chicken houses and equipment, and provide
labor, materials, and utilities necessary to care for the
chicks. The chicken houses and equipment must originally meet
JCG's and Koch's strict requirements dealing with
design plans and specifications subject to JCG's and
Koch's sole approval before a grower is accepted by JCG
and Koch. JCG and Koch also dictate the type of veterinary
care provided to the birds throughout their lives and the
birds' condition of confinement.
(Doc. 1 at ¶ 11).
second agreement specifically mentioned in the complaint is a
Poultry Production Agreement (“PPA”) that
Plaintiffs and JCG executed on October 9, 2015. (Doc. 1 at
¶ 20; see Doc. 11-1). Pursuant to the terms of
the PPA, JCG delivers to Plaintiffs chickens along with feed,
medication, other supplies, and technical instruction. (Doc.
11-1 at 5). In exchange, Plaintiffs grow and care for the
chickens consistent with guidelines provided by JCG. (Doc.
11-1 at 5). The PPA gives JCG sole discretion to determine
the number, type, and size of chickens placed on
Plaintiffs' farm; the time for processing chickens; and
the date, time, and interval of placement of future chickens.
(Doc. 11-1 at 6). The PPA prohibits Plaintiffs or its
employees from owning, maintaining, or caring for other
poultry or birds, including “domestic poultry, fowl,
turkey, ostrich, emu, rhea, or guinea” on their farm.
(Doc. 11-1 at 8). JCG pays Plaintiffs based on a specific
formula that incorporates a number of criteria determined by
JCG. (Doc. 11-1 at 9-10, 22-23). The PPA also contains a
clause regarding limitation of damages. (Doc. 11-1 at 16).
the week of November 9, 2016, JCG picked up a flock of
broilers from Ms. Buttram's farm for processing, and
consistent with the terms of the PPA, Ms. Buttram began
preparing her poultry houses for the next flock of birds.
(Doc. 1 at ¶ 22). JCG and Koch personnel told her to
expect new chicks on her farm within a few days. (Doc. 1 at
¶ 22). Ms. Buttram relied on these representations, and
during the week of November 14, 2016, she continued preparing
her poultry houses for the next flock of chicks. (Doc. 1 at
¶¶ 23, 27-28). By the following week, JCG and Koch
had sprayed the poultry houses for insect and rodent control.
(Doc. 1 at ¶ 28).
November 23, 2016, JCG and Koch representative Mike Hales
called Ms. Buttram and summoned her to meet with JCG
representatives to discuss Ms. Buttram's husband. (Doc. 1
at ¶ 29). Specifically, JCG representatives wanted
information regarding Mr. Buttram's involvement with a
restaurant in Ohio and the restaurant's role in assisting
with a documentary called “Super Size Me 2: Holy
Chicken!”. (Doc. 1 at ¶¶ 29, 34). The meeting
was to take place on November 28, 2016. (Doc. 1 at ¶
morning on November 28, 2016, Ms. Buttram called JCG's
and Koch's office to ask why her feed had not been
delivered and when she could expect her next placement of
birds. (Doc. 1 at ¶ 30). Mr. Hales told Ms. Buttram that
she needed to come to his office to discuss her husband's
activities. (Doc. 1 at ¶ 30). Because feed is generally
delivered about a week before birds arrive, Ms. Buttram was
concerned that JCG and Koch would not deliver birds until
after the meeting. (Doc. 1 at ¶ 30). Mr. Hales assured
Ms. Buttram that she would receive birds on December 2, 2016.
(Doc. 1 at ¶ 30).
on November 28, 2016, Ms. Buttram called Mr. Hales again and
told him that she needed to postpone the meeting. (Doc. 1 at
¶ 31). When Ms. Buttram told Mr. Hales that she could
not meet on November 28, 2016, Mr. Hales informed her that
she would not receive additional birds until the meeting took
place. (Doc. 1 at ¶¶ 24, 32). Since then, JCG and
Koch have continued to deny placement of chicks on Ms.
Buttram's farm. (Doc. 1 at ¶ 32). JCG and Koch also
have refused to allow the Buttram's children to grow
chickens for them. (Doc. 1 at ¶ 33).
February 23, 2017, counsel for JCG sent a letter to
Plaintiffs' counsel. (Doc. 26; see Doc. 11-2).
The letter states, in pertinent part:
In late November, JCG Foods requested a meeting with Connie
Buttram to discuss important issues under her Poultry
Production Agreement relating to significant biosecurity
concerns that arose relating to poultry growing activities in
which [JCG] learned Jonathan Buttram was engaged.
Specifically, [JCG] learned that Mr. Buttram was engaged in
growing free-range poultry while also assisting with the
operations of Ms. Buttram's farm, Breaking Free Farm.
As you are likely aware, biosecurity and the prevention of
bird disease, such as Avian Influenza, is an extremely
important issue in the poultry industry. An outbreak of Avian
Influenza at a farm growing chickens for [JCG] could be
devastating to [JCG] and the industry. As a result of the
risks associated with the possible spread of contagious
disease, Ms. Buttram, just as all independent contractor
producers under contract with [JCG], is required under her
agreement to comply with [JCG's] biosecurity requirements
and is prohibited from raising any other flocks, poultry or
birds on the farm or on any other premises. This prohibition
includes anyone providing services on Ms. Buttram's
behalf. [JCG's] understanding is that Mr. Buttram carries
out day-to-day operational activities at the Breaking Free
The biosecurity risk associated with raising free-range
poultry is particularly significant because of the potential
exposure to wild birds, rodents, and animals through which
transmission of infectious diseases may take place. For these
reasons, when the Company learned that Mr. Buttram was
involved with other poultry growing operations, it reached
out to Ms. Buttram as the contracting party so that [JCG]
could promptly and cooperatively assess the risks associated
with Mr. Buttram's activities and determine how to
proceed. Meeting with ...