July 19, 2007

House Agriculture Committee Blocks Courts To Small Livestock Growers

Washington, D.C. - The House Agriculture Committee voted a little after 4pm ET to repeal a provision added to the 2007 Farm Bill by Rep. Leonard Boswell (D-IA), chair of the Subcommittee on Livestock, Dairy, and Poultry, that would have forbidden livestock contracts from including mandatory arbitration provisions, as the majority of them now do.

During the debate on amendment number 87, proposed by Rep. Mike Rogers (R-AL), Rogers repeatedly referred to his experience in family law. He said that mandatory arbitration clauses were like a couple agreeing to a prenuptual agreement, entered into when both parties were still calm and reasonable. He cited the possible expense of going to court as a reason to support his amendment, which included language that would force arbitration hearings to be held near where the farmer lived and that would allow small disputes to be taken to small claims court.

Rep. Stephanie Herseth-Sandlin (D-SD) disagreed with drawing parallels to prenuptual agreements. She said that because of geographic concentration in the livestock industry, many producers had "no options" and "only one partner" available if they wanted to sell their livestock.

Boswell said that it was unreasonable expect that there would be many small claims court-sized actions when growers' investments in houses and equipment was often in the half million dollar range. He cited cases where it could cost as much as twenty thousand dollars to front arbitration fees.

Rep. Bob Goodlatte (R-VA), the ranking minority member of the committee, said that he didn't think it was right for the committee to be "interfering with the private right of the grower and the [company] to enter into a contract that includes mandatory arbitration." This objection followed repeated assertions by Rogers that the provision as included in the mark wouldn't withstand judicial review, saying that even his own amendment was "not what I want, which is to stay out of the right to contract ... not interfere with that constitutional right."

Rogers and Goodlatte weren't always on the same page, however. Rogers argued that the integrators in his district weren't well off enough to pay for court proceedings, and that trial lawyers wouldn't take cases from farmers because they wouldn't bother with a ten to twenty thousand dollar action. Goodlatte said that opening up these contracts to the courts would allow wealthy integrators to put small farmers all over the country out of business with court costs. Though one of them was arguing that the cases were too small to bother with outside small claims court and the other arguing that they'd be so large that it would threaten the foundations of small farming as we know it, they failed to disturb the chairman's gum-chewing.

Rep. Collin Peterson (D-MN), the committee chair, said that the amendment was an improvement over the current law. Later, he added that the debate hadn't changed since he'd heard the same things discussed when he was in his state legislature in 1978 and 1979. Though he supported Rogers' amendment, he freed his fellow Democrats to vote their conscience on the matter.

Boswell and Herseth-Sandlin both cited in opposition a case in Arkansas where chicken growers with hundreds of thousands of dollars invested in chicken houses were cut off from their contracts without notice. Though the integrator (the industry term for a chicken processing company) had promised them 3-5 years notice before any termination, no notice was given once it was decided that their farms were too far from the processing plant. Herseth-Sandlin further said that mandatory arbitration prohibited farmers from joining together in class action lawsuits, proceedings that can substantially reduce or eliminate the costs to individual plaintiffs.

Rep. John Barrow (D-GA) also spoke out against the amendment, saying that mandatory arbitration was meant as an option for partners with equal bargaining power who dealt with each other on a high volume basis. He said that the point of arbitration, that it was arbitrary, that it valued speed over fairness, was meant to be applied only between parties who expected it to all even out over the long run.

Barrow said that when partners of unequal standing were involved, where you had take-it-or-leave-it contracts, contracts of adhesion, it was unreasonable for the less powerful partner to have to sign away their rights to go to court. He said "the only equal answer between parties of unequal bargaining power is post-dispute arbitration," that there would be no restriction against both parties voluntarily committing to an arbitration process. Saying that arbitration could be just as onerous and expensive as court, he said that the use of arbitration in so many areas had gone far beyond its original, intended uses.

The amendment failed on a voice vote held before a recess was called, but passed on a roll call vote held when the committee reconvened.

List of Democrats and Republicans that voted to betray small farmers in America today, leaving them wholly at the mercy of the lawyered up livestock companies that are usually the only buyers for their goods. They left small farmers without recourse in the face of an overwhelmingly powerful industry that gives preferential prices to large growers, further tilting the playing field in favor of large, highly polluting confined animal feeding operations:

Rep. Collin Peterson, MN
Rep. Tim Holden, PA
Rep. Dennis Cardoza, CA
Rep. David Scott, GA
Rep. Jim Marshall, GA
Rep. Henry Cuellar, TX
Rep. Jim Costa, CA

Rep. Bob Goodlatte, VA
Rep. Terry Everett, AL
Rep. Frank Lucas, OK
Rep. Jerry Moran, KS
Rep. Robin Hayes, NC
Rep. Sam Graves, MO
Rep. Jo Bonner, AL
Rep. Mike Rogers, AL
Rep. Steve King, IA
Rep. Marilyn N. Musgrave, CO
Rep. Randy Neugebauer, TX
Rep. Charles W. Boustany, Jr., LA
Rep. John R. "Randy" Kuhl, NY
Rep. Virginia Foxx, NC
Rep. K. Michael Conaway, TX
Rep. Jeff Fortenberry, NE
Rep. Jean Schmidt, OH
Rep. Adrian Smith, NE
Rep. Kevin McCarthy, CA
Rep. Tim Walberg, MI

Posted by natasha at July 19, 2007 02:31 PM | Agriculture | Technorati links |