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Federal District Court Denies Some Arguments to Dismiss Claims Against Perdue Farms

Updated: Mar 24, 2023


Image of poultry houses by Livestock & Poultry Environmental Learning Center
Image of poultry houses by Livestock & Poultry Environmental Learning Center


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A federal district court in late 2022 ruled on a motion to dismiss claims filed by a former grower of Perdue Farms, arguing that the grower was not an independent contractor but an employee of Perdue Farms. This action was one of two filed in 2022, making similar claims. The court denied several of Perdue’s arguments but dismissed two claims. The decision is in Parker v. Perdue Farms, No. 5:22-CV-00268-TES, 2022 WL 1755300.

Background

I’ve previously written about this case; you can find that post here. The essential background is that a South Carolina former poultry grower who sued Perdue Foods in federal district court, claiming that Perdue had misclassified him and other growers as independent contractors when they should be classified as employees, failed to pay a minimum wage required under the Fair Labor Standards Act (FLSA), violated the Packers & Stockyards Act (PSA), and state law claims of fraud, breach of contract, unjust enrichment, and negligent misrepresentation. Perdue filed a motion to dismiss for a failure to state a claim for some of the claims, including the FLSA claims partially, state law claims, and the PSA claims.

District Court Opinion

It is important to note for those unfamiliar with the motion to dismiss for a failure to state a claim that typically claims will survive if the complaint states claims for relief that on its face appear plausible and alleges sufficient factual matter. The court highlights that complaints may survive even if a savvy judge believes recovery is remote. The complaint will still survive a motion to dismiss for failure to state a claim.

Looking at the FLSA claims, Perdue argues that the federal district court in Georgia does not have jurisdiction over Perdue for claims by potential plaintiffs outside of Georgia. However, Perdue is also arguing that even if the court has jurisdiction and the court agrees that the FLSA covers the plaintiffs, then they fall under the agricultural exemption in the FLSA. Looking first at the jurisdiction argument, the court found that it is too early to decide before potential class members attempt to join. Perdue points to the Poultry Producer Agreement (PPA) that all growers sign has a forum selection clause. This forum selection clause states that growers will bring suit in the state or federal court in the farm's county. The court would need to determine all class members had this forum selection clause in their PPA and will wait until plaintiffs opt-in to the litigation.

The court next turns to the arguments that the growers would fall under the agriculture exemption with FLSA. Typically determining if this exemption applies requires extensive factfinding that needs to be done as the case moves forward. Therefore, the court needs more facts to answer the question and whether the exemption application is currently not ripe for review.

Next, the court turns to arguments made by Perdue that the state law claims of negligent misrepresentation and fraud require a heightened pleading standard under the Federal Rules of Civil Procedure. However, Federal Rule 9(b) requires a heightened pleading standard for those claims based on fraud—looking at the negligent misrepresentation claims, under Georgia law, negligent misrepresentation is based on tort law and not fraud. Therefore, in this case, the heightened pleading requirements do not apply.

Poultry farm with deer in foreground image by Chesapeake Bay Program
Poultry farm with deer in foreground image by Chesapeake Bay Program

Looking at the complaint for the fraud claims, the plaintiff meets most of these requirements. The plaintiff has outlined some statements/omissions from the PPA that could be fraudulent. The plaintiff alleged that Perdue drafted the PPA language in question. The plaintiff has alleged that Perdue profited off the misrepresentations that were the proximate cause of the plaintiff’s damages. The plaintiff never explained who he discussed the PPA with and any misrepresentations made by that person. At the same time, the plaintiff references broad portions of the PPA but does not cite specific instances of fraud in the PPA. The court dismisses the fraud claim without prejudice to allow the plaintiff time to amend the complaint to meet the heightened standard for fraud.

Perdue’s argument for the plaintiff not having standing to bring the state law claims for growers outside of Georgia. The court views these arguments as premature. Therefore, before the class is certified, the court must only determine if the plaintiff has standing. The plaintiff has standing, and the court denies Perdue’s motion.

Turning to the last argument, the court agrees with Perdue that the plaintiff’s PSA claim must fail because the plaintiff has not alleged any harm to competition. Accordingly, the court grants Perdue’s motion to dismiss this claim.

Why Care?

This court case is one of two filed last year claiming that growers are companies' employees, not independent contractors. Although several of Perdue’s arguments were denied at this stage, it does not mean that the court may not revisit later after more of the record is developed. Therefore, we will have to keep watching this court case to see how it progresses to see if it gets certified as a class action and if claims are dismissed as the record is developed.

References

Parker v. Perdue Farms, Inc, No. 5:22-CV-00268-TES, 2022 WL 17553008 (M.D. Ga. Dec. 9, 2022)

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