David Hudson and Donna Hudson v. Conagra Poultry Company

484 F.3d 496, 2007 U.S. App. LEXIS 7681, 2007 WL 984106
Court of Appeals for the Eighth Circuit·Decided April 4, 2007·No. 06-2596·Published·Cited by 25 cases

Opinion

MELLOY, Circuit Judge.

Plaintiffs David Hudson and Donna Hudson (“the Hudsons”) entered into a contract to raise chickens for ConAgra Poultry Company (“ConAgra”). Disputes eventually arose between the parties, which culminated in ConAgra’s cancellation of the contract and the Hudsons’ decision to file for arbitration of their breach-of-contract claims. Following a decision by an arbitration panel, the Hudsons filed tort claims against ConAgra in state court. ConAgra removed the case to federal court on the basis of diversity jurisdiction, and the district court 1 compelled arbitration of the Hudsons’ tort claims against ConAgra. The arbitration panel found that the Hudsons’ tort claims were barred by res judicata and therefore granted Con-Agra’s motion for summary disposition. The Hudsons moved to vacate, modify, or correct the arbitration order, and the district court 2 denied the motion. The Hud-sons appeal the district court orders compelling arbitration and denying their post-arbitration motion to vacate, modify, or correct the award. We affirm.

1. BACKGROUND

The Hudsons own and operate a farm in Claiborne Parish, Louisiana. ConAgra had poultry processing plants in nearby Arcadia, Louisiana, and El Dorado, Arkansas. ConAgra representatives approached the Hudsons in 1992 to form a business arrangement. ConAgra and the Hudsons entered into an agreement whereby ConA-gra would deliver chicks to the Hudsons, the Hudsons would feed and raise the chicks to adult size, and ConAgra would return later to collect the full-grown birds. The Hudsons constructed chicken houses suitable for performance under the agreement. The parties maintained their relationship for several years under a series of “flock-to-flock” contracts, each lasting the duration of one delivery of chicks to one pick-up of adult chickens. The parties signed the one-flock agreement at issue in this case (the “Broiler Grower Agreement” or “BGA”) in 1999. ConAgra drafted the contract.

The BGA contained an arbitration clause governing “[a]ll claims ... arising out of or relating in any way to the negotiation, execution, interpretation, and performance” of the contract. It also contained a separate choice-of-law provision stating that “[t]he laws of Arkansas ... shall exclusively apply and govern this agreement.” In addition, the BGA set forth different rates of compensation depending upon whether the Hudsons chose to retrofit their chicken houses to meet new ConA-gra specifications. This two-tiered compensation provision was absent from prior agreements between the parties, and Con- *499 Agra alleges that it was a uniform addition in its contracts with other growers that year.

The Hudsons objected to retrofitting their houses and to the lower compensation for chickens raised in facilities that were not retrofitted, which they said placed them at a competitive disadvantage. Numerous disputes followed. The Hud-sons alleged that ConAgra was intentionally tardy in picking up the full-grown birds, while ConAgra alleged that Mr. Hudson brandished a firearm and threatened Con-Agra associates when they visited the farm. Citing this latter incident, ConAgra terminated the BGA on January 17, 2000.

Six months later, the Hudsons filed a demand for arbitration pursuant to the arbitration clause of the BGA. The Hud-sons claimed that ConAgra breached the contract in several respects, including untimely pick-up of the chickens, institution of the two-tiered compensation system (which, according to the Hudsons, conflicted with other compensation provisions of the BGA), and the ultimate termination of the BGA. An arbitration panel ruled in favor of ConAgra on all grounds in September of 2001. The Hudsons do not appeal any issues relating to the disposition of their breach-of-contract claims.

On January 2, 2003, the Hudsons brought tort claims in Arkansas state court alleging that several of ConAgra’s actions during the course of their business relationship violated the Arkansas Deceptive Trade Practices Act. Ark.Code Ann. §§ 4-88-101 et seq. ConAgra removed the case to the United States District Court for the Western District of Arkansas and moved to compel arbitration, citing the arbitration provision of the BGA. The district court granted the motion, finding that the language of the parties’ arbitration provision encompassed the Hudsons’ tort claims.

The parties proceeded to a second arbitration. On January 23, 2006, a second arbitration panel granted ConAgra’s motion for summary disposition on the basis of res judicata. The Hudsons moved the district court to vacate, modify, or correct the second arbitration award, arguing that the panel in this second arbitration improperly refused to hear evidence of their tort claims, that the claims should not have been subjected to arbitration, and that the arbitrators erred in applying res judicata to bar the claims. The district court denied their motion. The Hudsons appeal that denial, as well as the district court’s prior grant of ConAgra’s motion to compel arbitration.

II. DISCUSSION

The Hudsons raise two primary issues on appeal. First, they argue that the district court erred in compelling arbitration of their tort claims because “[wjritten agreements to arbitrate have no application to tort matters” under the Arkansas Uniform Arbitration Act. Terminix Int’l Co. v. Stabbs, 326 Ark. 239, 930 S.W.2d 345, 347 (1996); Ark.Code Ann. § 16-108-201(b)(2). Second, the Hudsons argue that the district court erred by failing to modify the second arbitration panel’s finding that res judicata precluded the tort claims. We address these issues in turn.

A. Arbitrability of the Hudsons’ Tort Claims

Free access — add to your briefcase to read the full text and ask questions with AI

David Hudson and Donna Hudson v. Conagra Poultry Company, 484 F.3d 496, 2007 U.S. App. LEXIS 7681, 2007 WL 984106 (8th Cir. 2007).

484 F.3d 496 (David Hudson and Donna Hudson v. Conagra Poultry Company) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related