Wheeler v. Pilgrim's Pride Corp.

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit

FILED
July 21, 2008

No. 07-40651 Charles R. Fulbruge III
Clerk

CODY WHEELER; DON DAVIS; DAVEY WILLIAMS

Plaintiffs-Appellees
v.

PILGRIM’S PRIDE CORP

Defendant-Appellant

Appeal from the United States District Court
for the Eastern District of Texas

Before REAVLEY, JOLLY, and GARZA, Circuit Judges.
EMILIO M. GARZA, Circuit Judge:
This appeal presents a single narrow question: whether a plaintiff must
prove an adverse effect on competition to prevail in a suit alleging a violation of
Packers and Stockyards Act Sections 202(a)-(b), 7 U.S.C. §§192(a)-(b), (“PSA”).
The District Court answered this question in the negative despite the fact that
the great weight of authority in our sister Circuits is to the contrary. Based on
a plain-text reading of the PSA, we agree with the District Court. Therefore, we
hold that a plaintiff need not prove an adverse effect on competition to prevail
under 7 U.S.C. §§ 192(a)-(b). We disagree with those decisions of our sister
Circuits that conflict with this holding and acknowledge that in so doing we
create a circuit-split on this issue. We AFFIRM.
 No. 07-40651

I
Plaintiffs-Appellees Cody Wheeler, Don Davis, and Davey Williams
(together, the “Growers”) are chicken farmers who grow chickens known as
“broilers” for Defendant-Appellant Pilgrim’s Pride Corporation (“PPC”), a
chicken processor and dealer referred to as an “integrator” in the chicken
industry. The Growers and PPC operate within a contractual relationship
whereby PPC provides the Growers with the chicks, feed, and supplies required
to raise chickens. In exchange, the Growers care for the chickens until they
reach maturity and are returned to PPC. We say “returned” because the chicks,
maturing chickens, feed, and medicine remain the property of PPC at all times.
This is known as the “grow-out” process. It takes approximately two months to
grow-out a flock. The Growers’ operations (and the operations of other growers)
are geographically clustered into areas called “complexes.” PPC compensates the
Growers under a “tournament system.” In essence, PPC ranks the Growers
against one another and against the other growers operating in their complex.
PPC then compensates the Growers based on the quality of their broilers, the
number that survive the grow-out process, and the amount of feed and supplies
the Growers used.
At least one grower operates under a different system than the Growers.
Lonnie “Bo” Pilgrim (“Mr. Pilgrim”), PPC’s founder and chairman, purchases
chicks, feed, and supplies from PPC rather than having them consigned to him.
Operating in a different complex than the Growers, Mr. Pilgrim then raises the
chickens at his farm (“LTD Farm”) and sells them back to PPC. Rather than
compensating Mr. Pilgrim under the tournament system, PPC pays Mr. Pilgrim
the lesser of a weekly quoted market price or 102% of his costs. According to the
Growers, Mr. Pilgrim earns more under his arrangement with PPC than they
earn under their arrangements with PPC. The Growers further contend that
PPC refused to offer them growing arrangements similar to Mr. Pilgrim’s.

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The Growers sued PPC under the PSA. Specifically, the Growers alleged
that PPC’s refusal to afford them an opportunity to operate under the same
terms as an insider, is“unfair and unjustly discriminatory” and affords Mr.
Pilgrim an “undue or unreasonable preference or advantage” in violation of
sections 192(a)-(b).1 The Growers raised additional claims against PPC, as well,
that we need not describe in detail for the purposes of the appeal. PPC moved
for summary judgment arguing that the Growers did not allege an adverse effect
on competition, as required to prevail under sections 192(a)-(b). The District
Court found no such requirement in the PSA and denied the motion for
summary judgment. Pursuant to 28 U.S.C. § 1292(b), the District Court then
entered an order certifying the following issue for appeal: “whether a plaintiff
must prove an adverse effect on competition in order to prevail under 7 U.S.C.
§§ 192(a)-(b).” We permitted the appeal.
II
We may review an otherwise unappealable order of a District Court
pursuant to 28 U.S.C. § 1292(b), if a District Court enters an order stating that
it is “of the opinion that such order involves a controlling question of law as to
which there is substantial ground for difference of opinion and that an
immediate appeal from the order may materially advance the ultimate
termination of the litigation.” Id. Under 28 U.S.C. § 1292(b), “it is not merely
the controlling question of law which is certified for appeal; it is the entire order
entered by the trial court.” Ducre v. Executive Officers of Halter Marine, Inc.,
752 F.2d 976, 984 n.16 (5th Cir. 1985) (citations omitted). Thus, we may address
all issues material to the order in question and are not limited to the “controlling
question of law.” See id. Indeed, some Circuits have held that we are “obliged
to address the order that was certified rather than the controlling question of

1
We refer to the PSA by its codified form in the United States Code, 7 U.S.C. § 192. We
refer, at times, to sections 192(a)-(b) simply as (the “PSA”).

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law framed by the district court.” Cipollone v. Liggett Group, Inc., 789 F.2d 181,
187-88 (3d Cir. 1986); see also Capital Temporaries, Inc. of Hartford v. Olsten
Corp., 506 F.2d 658, 660 (2d Cir. 1974). Here, we constrain ourselves to the
question of statutory interpretation that the District Court identified and that
the parties briefed because that question controls this appeal. We review an
issue of statutory interpretation, such as the PSA’s construction, de novo.
Comacho v. Tex. Workforce Comm’n, 408 F.3d 229, 234 (5th Cir. 2005).
III
The parties raise four issues that may bear on our interpretation of the
PSA: first, whether the PSA’s plain text requires a plaintiff to prove an adverse
effect on competition to prevail in a suit under sections 192(a)-(b); second,
whether the PSA’s legislative history supports an adverse effect on competition
requirement under sections 192(a)-(b);2 third, whether we must defer to the
Department of Agriculture’s (“USDA”) interpretation of the PSA; and fourth,
whether the Federal Trade Commission’s (“FTC”) interpretation of a similarly-
worded statute bears on our interpretation of the PSA. If we find that a plaintiff
must prove an adverse effect on competition to prevail under sections 192(a)-(b),
PPC raises a fifth issue: whether we should dismiss this suit, rather than
remanding it, because there is no evidence establishing an adverse effect on
competition. Because we hold that the plain text of sections 192(a)-(b) does not
require an adverse effect on competition, we need only address the first issue.
We do, however, briefly discuss the PSA’s legislative history because that is our
point of departure from our sister Circuits.

2
PPC also contends that we should follow the great weight of authority in our sister
Circuits, which has held that the PSA’s legislative history weighs in favor of requiring a
plaintiff to prove an adverse effect on competition to prevail in a suit under sections 192(a)-(b).
We acknowledge that the other Circuits have so held and address this contention in Section
III.B, infra, which discusses the legislative history of the PSA and explains why we should not
consider or rely on it.

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A
We begin, as we should, with the plain text of the statute. See Permanent
Mission of India to the United Nations v. City of New York, 127 S. Ct. 2352, 2356
(2007) (citation omitted) (“We begin, as always, with the text of the statute.”);
Watt v. Alaska, 451 U.S. 259, 266 (1981) (quotation omitted) (“The starting point
in every case involving construction of a statute is the language itself.”); see also
In re Rogers, 513 F.3d 212, 225 (5th Cir. 2008). The PSA provides:
It shall be unlawful for any packer or swine contractor with respect
to livestock, meats, meat food products, or livestock products in
unmanufactured form, or for any live poultry dealer with respect to
live poultry, to:

(a) Engage in or use any unfair, unjustly
discriminatory, or deceptive practice or device; or

(b) Make or give any undue or unreasonable
preference or advantage to any particular person
or locality in any respect, or subject any
particular person or locality to any undue or
unreasonable prejudice or disadvantage in any
respect; or

(c) Sell or otherwise transfer to or for any other
packer, swine contractor, or any live poultry
dealer, or buy or otherwise receive from or for
any other packer, swine contractor, or any live
poultry dealer, any article for the purpose or with
the effect of apportioning the supply between any
such persons, if such apportionment has the
tendency or effect of restraining commerce or of
creating a monopoly; or

(d) Sell or otherwise transfer to or for any other
person, or buy or otherwise receive from or for
any other person, any article for the purpose or
with the effect of manipulating or controlling
prices, or of creating a monopoly in the

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acquisition of, buying, selling, or dealing in, any
article, or of restraining commerce; or

(e) Engage in any course of business or do any act for
the purpose or with the effect of manipulating or
controlling prices, or of creating a monopoly in
the acquisition of, buying, selling, or dealing in,
any article, or of restraining commerce; or

(f) Conspire, combine, agree, or arrange with any
other person (1) to apportion territory for
carrying on business, or (2) to apportion
purchases or sales of any article; or (3) to
manipulate or control prices; or

(g) Conspire, combine, agree, or arrange with any
other person to do, or aid or abet the doing of, any
act made unlawful by subdivisions (a), (b), (c), (d),
or (e) of this section.

7 U.S.C. § 192 (emphasis added).
The District Court held that the text of sections 192(a)-(b) “on its face”
requires no showing of an adverse effect on competition. PPC contends that the
District Court erred in this determination without offering a persuasive
alternative interpretation of the text. Indeed, the only textual argument PPC
can muster is that the District Court should have examined the text, in light of
the legislative history, rather than examining the text alone. The Growers
endorse the plain-text interpretation of the District Court as the only correct
reading of sections 192(a)-(b) and counter that the District Court need not have
considered legislative history because the PSA’s text is plain, clear, and
unambiguous.
“It is well established that when a statute’s language is plain, the sole
function of the courts))at least where the disposition required by the text is not
absurd))is to enforce it according to its terms.” Lamie v. U.S. Trustee, 540 U.S.
526, 534 (2004) (quotation omitted). We look first to the specific terms of the

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sections in question. Section 192(a) prohibits “unfair, unjustly discriminatory,
or deceptive” practices or devices. Section 192(b) prohibits “undue or
unreasonable” preferences, advantages, or disadvantages. Neither section
contains language limiting its application to only those acts or devices, which
have an adverse effect on competition, such as “restraining commerce.” Under
well-settled principles, we must refrain from reading additional terms, such as
those that would require an adverse effect on competition, into these sections.
See Lamie, 540 U.S. at 538 (holding that if the text evinces “a plain, nonabsurd
meaning” then the court should not “read an absent word into the statute.”); see
also Bates v. United States, 522 U.S. 23, 29 (1997) (holding that courts
“ordinarily” should “resist reading words or elements into a statute that do not
appear on its face”). Neither PPC nor the other Circuits have provided an
alternative reading of the plain text of sections 192(a)-(b). Nor can we say that
it would be absurd to read sections 192(a)-(b) as not requiring an adverse effect
on competition. Accordingly, because PPC’s construction of the PSA would
require us to read absent terms into the statute, we reject it.
Looking to the remaining sections of the PSA, we find further support for
our view that sections 192(a)-(b) do not require a plaintiff to prove an adverse
effect on competition. Sections 192(c)-(e), unlike sections 192(a)-(b), prohibit only
those acts, which have the effect of “restraining commerce” or which produce
another common antitrust injury, such as “creating a monopoly.” If Congress
had intended to limit the scope of sections 192(a)-(b) to prohibit only those acts
with the effect of “restraining commerce,” it could have included the same
language it employed in sections 192(c)-(e). Congress did not. This omission is
strong evidence that Congress did not intend sections 192(a)-(b) to require a
plaintiff to prove an adverse effect on competition. See Russello v. United States,
464 U.S. 16, 23 (1983) (quoting United States v. Wong Kim Bo, 472 F.2d 720, 722
(5th Cir. 1972) (“‘Where Congress includes particular language in one section of

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a statute but omits it in another section of the same Act, it is generally presumed
that Congress acts intentionally and purposely in the disparate inclusion or
exclusion.’”).3 Similarly, if Congress had intended for the courts to read
“restraining commerce” into every section of the PSA, then we see no reason why
Congress would have included “restraining commerce” only in sections 192(c)-(e).
Because we will not read additional terms into a statute when we believe that
Congress intentionally omitted them, we cannot adopt a reading of the PSA that
engrafts an adverse effect on competition requirement onto sections 192(a)-(b).
See Wong Kim Bo, 472 F.2d at 722.
We agree with the District Court that the language of sections 192(a)-(b)
is plain, clear, and unambiguous, and that it does not require the Growers to
prove an adverse effect on competition. Holding that sections 192(a)-(b) plainly,
clearly, and unambiguously do not require an adverse effect on competition, we
go no further. See Cooper Indus., Inc. v. Aviall Servs., Inc., 543 U.S. 157, 167
(2004) (“Given the clear meaning of the text, there is no need to . . . consult the
purpose of [the statute] at all.”); Lamie, 540 U.S. at 534 (holding that unless a
statute is “ambiguous on the point at issue,” a court should not resort to
legislative history in interpreting it); Rogers, 513 F.3d at 225-26 (citing Carrieri
v. Jobs, Inc., 393 F.3d 508, 518-19 (5th Cir. 2004)) (“Only after application of the
principles of statutory construction, including the canons of construction, and
after a conclusion that the statute is ambiguous may the court turn to legislative
history.”); Guilzon v. C.I.R., 985 F.2d 819, 823 n.11 (5th Cir. 1993) (citation
omitted) (“Fifth Circuit law is crystal clear that when, as here, the language of

3
We consistently have applied this canon of construction since deciding Wong Kim Bo.
See, e.g., Arif v. Mukasey, 509 F.3d 677, 681 (5th Cir. 2007); Comacho, 408 F.3d at 236; Nuovo
Pignone, SpA v. Storman Asia M/V, 310 F.3d 374, 384 n.16 (5th Cir. 2002); United States v.
Juvenile No. 1, 118 F.3d 298, 305 (5th Cir. 1997); United States v. Shear, 962 F.2d 488, 490
(5th Cir. 1992); In re Timbers of Inwood Forest Assocs., Ltd., 793 F.2d 1380, 1402 (5th Cir.
1986).

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a statute is unambiguous, this Court has no need to and will not defer to
extrinsic aids or legislative history.”). Accordingly, we affirm the District Court.4
B
We acknowledge that our decision today conflicts with nearly every
decision of our sister Circuits on this issue.5 Their decisions, however, generally
reached beyond the PSA’s clear and unambiguous text, choosing instead to be
guided by its legislative history, “antitrust ancestry,” and “policy considerations.”
London, 410 F.3d at 1307. We believe that their decisions should have been
guided by the text. See Cooper, 543 U.S. at 167; Lamie, 540 U.S. at 534; Rogers,
513 F.3d at 225-26; Guilzon, 985 F.2d at 823. Accordingly, this is where we
depart from our sister Circuits. See id. By resting our decision on the PSA’s
plain text, we follow the better path: “prefer[ring] the plain meaning since that
approach respects the words of Congress.” Lamie, 540 U.S. at 536. “In this
manner we,” unlike our sister Circuits, “avoid the pitfalls that plague too quick
a turn to the more controversial realm of legislative history.” Id.

4
We have not been asked and need not decide what injuries, which do not have an
adverse effect on competition, fall within sections 192(a)-(b).
5
See, e.g., Been v. O.K. Indus., Inc., 495 F.3d 1217, 1230 (10th Cir. 2007); London v.
Fieldale Farms Corp., 410 F.3d 1295, 1303 (11th Cir. 2005) (“[I]n order to succeed on a claim
under the PSA, a plaintiff must show that the defendant's unfair, discriminatory or deceptive
practice adversely affects or is likely to adversely affect competition.”); Adkins v. Cagle Foods
JV, LLC, 411 F.3d 1320, 1324 n.6 (11th Cir. 2005); Pickett v. Tyson Fresh Meats, Inc., 420 F.3d
1272, 1280 (11th Cir. 2005); I.B.P., Inc. v. Glickman, 187 F.3d 974, 977 (8th Cir. 1999);
Jackson v. Swift Eckrich, Inc., 53 F.3d 1452, 1458 (8th Cir. 1995); Farrow v. U.S. Dept. of
Agric., 760 F.2d 211, 215 (8th Cir. 1985); De Jong Packing Co. v. U.S. Dept. Agric., 618 F.2d
1329, 1336–37 (9th Cir. 1980); Pac. Trading Co. v. Wilson & Co., Inc., 547 F.2d 367, 369–70
(7th Cir. 1976); Armour & Co. v. United States, 402 F.2d 712, 717 (7th Cir. 1968). But see
Schumacher v. Tyson Fresh Meats, Inc., 434 F. Supp. 2d 748, 750–55 (D.S.D. 2006) (observing
that § 192(a) concerns activities that adversely affect competition, but rejecting the conclusion
that § 192(a) is limited to only those activities that adversely affect competition); Kinkaid v.
John Morrell & Co., 321 F. Supp. 2d 1090, 1103 (N.D. Iowa 2004) (citing Wilson & Co. v.
Benson, 286 F.2d 891, 895 (7th Cir. 1961)) (“[T]his court finds that only a strained reading of
the statute could require that practices that are ‘unfair’ or ‘deceptive’ within the meaning of
§ 192(a) must also be ‘monopolistic’ or ‘anticompetitive’ to be prohibited.”).

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In our view, our sister Circuits have fallen into the very legislative history
pitfall that the Supreme Court identified. Here, as in Lamie, the legislative
“history creates more confusion than clarity about the congressional intent”
because history and policy considerations lend support to conflicting
interpretations. See id. at 539. To illustrate the point, we consider the two
primary “legislative history” and “policy” bases upon which our sister Circuits
rest their findings of an adverse effect on competition requirement. First, they
rely on H.R. 85-1048 (1958), which states: “the primary purpose of [the PSA] is
to assure fair competition and fair trade practices in livestock marketing and in
the meatpacking industry.” Id. at 1. Second, they rely on Stafford v. Wallace,
258 U.S. 495, 514-15 (1922), which observed that the “chief evil” Congress feared
in passing the PSA was the monopoly of meat industry packers. Most obviously,
we observe that Congress spoke of assuring fair competition as the PSA’s
“primary” purpose, not as the PSA’s only purpose, and that the Supreme Court
spoke of monopoly as the “chief” evil against which the PSA protects, not as the
“only” evil. Thus, Stafford does not foreclose us from holding that the PSA
protects against harms that have no adverse effect on competition. See id.
Moreover, a closer look at the House Report shows that it may not limit the PSA
as much as the other Circuits think.
By examining the context of the very passages of the House Report upon
which our sister Circuits rely, we find that we may read them to support the
contrary proposition; namely, that sections 192(a)-(b) may not require a plaintiff
to prove an adverse effect on competition. Although the other Circuits rightly
point out that the PSA’s “primary purpose” is to assure “fair competition and fair
trade practices,” the House described other purposes as well:
The primary purpose of this Act is to assure fair competition and
fair trade practices in livestock marketing and in the meatpacking
industry. The objective is to safeguard farmers and ranchers
against receiving less than the true market value of their livestock

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and to protect consumers against unfair business practices in the
marketing of meats, poultry, etc. Protection is also provided to
members of the livestock marketing and meat industries from
unfair, deceptive, unjustly discriminatory, and monopolistic
practices of competitors, large or small.

***
The act provides that meatpackers subject to its provisions shall not
engage in practices that restrain commerce or create monopoly.
They are prohibited from buying or selling any article for the
purpose of or with the effect of manipulating or controlling prices in
commerce. They are also prohibited from engaging in any unfair,
deceptive, or unjustly discriminatory practice or device in the
conduct of their business, or conspiring, combining, agreeing, or
arranging with other persons to do any of these acts.
H.R. 85-1048 at 1-2. There is little doubt that these passages support the view
that the PSA’s primary purpose is to protect fair competition. But the PSA goes
further. It also was intended to “protect consumers from unfair business
practices,” to protect members of the livestock marketing and meat industries
from “unfair, deceptive, and unjustly discriminatory” practices, and to prohibit
meatpackers, more generally, from “engaging in any unfair, deceptive, or
unjustly discriminatory practice or device in the conduct of their business.” Id.
Indeed, by using “also prohibited” to separate “unfair, deceptive, or unjustly
discriminatory practice and device” from language describing injuries to
competition such as “restrain[ing] commerce,” “creat[ing] monopoly,” and
“manipulating or controlling prices,” Congress may have evinced its intent for
the PSA to sweep more broadly than only those injuries, which have an adverse
effect on competition. Id.; see Spencer Livestock Comm’n Co. v. Dept. of Agric.,
841 F.2d 1451, 1455 (9th Cir. 1988) (observing that the PSA’s primary purpose
was to assure fair competition and prevent monopolistic practices, but it also
was intended to provide protection from unfair and deceptive business tactics).
These passages from the House do not paint a clear picture of Congress’s intent.

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They create uncertainty. That is the point. “These uncertainties illustrate the
difficulty of relying on legislative history here and the advantage of our
determination to rest our holding on the statutory text.” Lamie, 540 U.S. at 542.
Better, we think, especially where Congress’s intentions and concerns are less
than crystal clear, to be guided by the basic precept: “it is ultimately the
provisions of our laws rather than the principal [or the “primary” or the “chief”]
concerns of our legislators by which we are governed.” Oncale v. Sundowner
Offshore Servs., Inc., 523 U.S. 75, 79 (1998). In reading an adverse effect on
competition requirement into sections 192(a)-(b), the other Circuits have
departed from this basic rule. We will not. We rest on a plain-text reading of
the PSA for our holding that sections 192(a)-(b) do not require a plaintiff to prove
an adverse effect on competition to prevail thereunder. Accordingly, we need not
address the remaining issues raised by the parties.
IV
For the foregoing reasons, we agree with the order of the District Court.
AFFIRMED.

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REAVLEY, Circuit Judge, dissenting:
Sections 192 (a) and (b) of the Packers and Stockyards Act may be read
differently, and this panel majority reading is certainly reasonable. However,
I incline to the meaning given “unfair” by the Tenth Circuit in Been v. O.K.
Indus. Inc., 495 F.3d 1217 (10th Cir. 2007) and, in any event, would not create
a circuit split after so many contrary circuit decisions over many years. I
would reverse.

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