IN THE SUPREME COURT OF
MISSISSIPPI
NO.
2000-IA-00790
SANDERSON FARMS, INC., Appellant
VERSUS
ROY R. GATLIN and NELDA T. GATLIN, Appellees.
APPELLEES’ BRIEF
Interlocutory Appeal from
the
Circuit Court of the Second
Judicial
District of Jones County,
Mississippi
ORAL ARGUMENT REQUESTED
Lawrence E. Abernathy, III
Attorney At Law
P. O. Box 4177
Laurel, MS 39441
Phone (601) 649-5000
Fax (601) 649-0519
MS Bar No. 1016
J. Dudley Butler
114 East Broadway Street
Yazoo City, MS 39194
Phone (601) 746-5040
Fax (601) 746-5075
IN
THE SUPREME COURT OF MISSISSIPPI
CASE
NO. 2000-IA-00790
SANDERSON
FARMS, INC. Appellant
VERSUS
ROY R. GATLIN and NELDA T. GATLIN Appellees
(CORRECTED) CERTIFICATE OF INTERESTED PERSONS
The undersigned counsel of record certifies that the following listed
persons have an interest in the outcome of this case. These representations are made in order that the Justices of the
Supreme Court and/or the Judges of the Court of Appeals may evaluate the
possible disqualification or recusal.
Abernathy, III, Lawrence E. - Attorney for Appellees
Burson, Richard O. - Attorney for the
Appellant
Butler, J. Dudley - Attorney for Appellees
Ferris, Brooke - Attorney for the Appellant
Follis, Richard A. - Attorney for the
Appellant
Gatlin, Nelda T. - Appellee
Gatlin, Roy R. - Appellee
Landrum, Billy Joe, Circuit Court Judge, Second Judicial District of
Jones County, Mississippi
Liberty Mutual Insurance Group, The - Insurance carrier for Appellant,
Sanderson Farms, Inc.
Quirk, Michael J. - Attorney for Appellee
Sanderson Farms, Inc. - Appellant
LAWRENCE E. ABERNATHY, III
Counsel of Record for Roy R. Gatlin and Nelda
T. Gatlin
LAWRENCE E. ABERNATHY, III
ATTORNEY AT LAW
P. O. BOX 4177
LAUREL, MISSISSIPPI 39441
TELEPHONE (601) 649-5000
MSB #1016
J. DUDLEY BUTLER (MSB #7626)
ATTORNEY AT LAW
114 EAST BROADWAY
YAZOO CITY, MISSISSIPPI 39194
(662) 746-5040
MICHAEL J. QUIRK, Of Counsel
F. PAUL BLAND, JR., Of Counsel
TRIAL LAWYERS FOR PUBLIC JUSTICE
1717 MASSACHUSETTS AVENUE, NW, SUITE 800
WASHINGTON, D.C. 20036
(202) 797-8600
TABLE OF CONTENTS
Page
CERTIFICATE OF INTERESTED PERSONS................................................................................. i
TABLE OF CONTENTS................................................................................................................. iii
TABLE OF AUTHORITIES............................................................................................................ vi
STATEMENT OF ISSUES ......................................................................................................... 1
Whether the Circuit Court correctly held that Sanderson Farms’
refusal to pay any of the $2,000 arbitration filing fee after it
promised to pay half the costs of arbitration is a breach of the
arbitration clause which waives the company’s right to enforce
the clause in this case ............................................................................................................ 1
Whether Sanderson Farms’ arbitration clause, which the company
imposed on a take it or leave it basis with no opportunity for
negotiation and which requires Roy Gatlin to pay at least $11,000
in arbitration costs before he can have a hearing on his state
law claims and to forego any right to recover punitive damages in
arbitration, is unconscionable and
unenforceable .................................................................... 1
STATEMENT OF THE FACTS AND PROCEEDINGS................................................................. 2
SUMMARY OF THE ARGUMENT ............................................................................................... 5
ARGUMENT .................................................................................................................................. 8
1.
Sanderson Farms
Waived or Defaulted on any Right to
Enforce the Arbitration Clause by Breaching its Promise
Therein to Pay Half the Costs of Arbitration .............................................................. 8
1.
Sanderson Farms
Breached the Arbitration Clause and
Waived any Right to Compel Arbitration in
this Case...................................... 8
1.
Sanderson Farms
Breached its Arbitration Clause
By Refusing to Pay any of the $2,000
Arbitration
Filing Fee ...................................................................... 10
2.
Sanderson
Farms’ Breach of the Arbitration
Clause
Waives the Company’s Right to
Compel Arbitration.......................................................................... 13
2.
The Question of
Whether Sanderson Farms Breached
its Arbitration Clause and Waived any Right to Compel
Arbitration is for a Court to Decide.............................................................. 18
1.
Courts Must
Decide Whether There is a Breach
Of an Arbitration Clause or Waiver of any Right
To Compel Arbitration..................................................................... 19
2.
The
“Arbitrability” Provision of Sanderson Farms’
Arbitration Clause Does Not Apply to Disputes
Over Whether the Arbitration Clause is
Enforceable..................................................................................... 23
II Sanderson Farms’ Arbitration Clause is
Unconscionable and
Should Not Be Enforced Regardless of Breach
and Waiver...................................... 26
1.
The Court May
Refuse to Enforce the Sanderson
Farms Arbitration Clause if it is Unconscionable as
a Matter of Mississippi Contract Law .......................................................... 27
2.
Sanderson
Farms’ Arbitration Clause is Unconscionable
Under Mississippi Law ............................................................................... 29
1.
The Gatlins had
no Meaningful Choice About
The Arbitration Clause .................................................................... 30
2.
The Arbitration
Clause is Substantively
Unconscionable .............................................................................. 34
3.
Courts Across
the Nation Have Struck Down Arbitration
Clauses Based on Provisions Like Those that
Sanderson Farms Seek to Enforce .............................................................. 38
1.
Sanderson Farms
Cannot Require Gatlin to
Pay $11,000 to Enforce His Legal Rights in
Arbitration ...................................................................................... 39
2.
Sanderson Farms
Cannot Use Arbitration to
Diminish the Remedies that are Available to
Gatlin Under Applicable Substantive Law ........................................ 43
CONCLUSION ............................................................................................................................ 47
CERTIFICATE OF SERVICE ...................................................................................................... 48
TABLE OF AUTHORITIES
CASES
Page
Ronald Adams
Contractor, Inc. v. Mississippi Transp. Comm’n,
777 So.2d 649, 650 (Miss. 2001) ...................................................................................... 11
Scott Addison
Construction, Inc. v. Lauderdale County School
System, - - So.2d - -, WL 393927, *4-5 (Miss. April 19, 2001) .......................... 14, 17, 19
Atkins v. Rustic Woods Partners, 525 N.E.2d
551, 555 (Ill. App. 1992) ...................................... 14
Arce v. Cotton
Club of Greenville, Inc.,
883 F. Supp. 117, 119 (N.D. Miss 1995) ......................................................................... 25
Armendariz v.
Foundation Health Psychare Services Inc.,
6 P.3d 669, 690 (Cal. 2000) ..................................................................... 33,
40, 41, 45, 46
Arnold v. United
Companies Lending Corp.,
511 S.E.2d 854 (W. Va. 1998) .................................................................................... 29,
32
Askew v. Askew, 699 So.2d 515, 519 n.3 (Miss.
1997)................................................................. 27
Bank of Indiana,
Nat’l Ass’n v. Holyfield,
476 F. Supp. 104, 108 (S.D. Miss. 1979) .......................................................................... 30
Barker v. Golf U.S.A., Inc., 154 F.3d 788,
791 (8th Cir. 1998) .............................................. 21,
24
Brent Towing Co.,
Inc. v. Scott Petroleum Corp.,
735 So.2d 355 (Miss. 1999) .............................................................................................. 12
Brower v. Gateway
2000,
667 N.Y.S.2d 569, 574 (N.Y. App. Div. 1998) ................................................................... 41
Canizaro v.
Mobile Communications Corp. of America,
655 So.2d 25, 29 (Miss. 1995) .......................................................................................... 13
Christensen v. Dewor Developments, 661 P.2d
1088, 1092 (1983) ............................................. 14
Cole v. Burns
International Security Services,
105 F.3d 1465 (D. C. Cir. 1997) .................................................................... 39,
40, 41, 43
Commercial Metals
Co. v. Balfour, Guthrie & Co.,
577 F.2d 264, 266 (5th Cir. 1978) ..................................................................................... 19
Cornell & Co.
v. Barber & Ross Co.,
360 F.2d 512, 513 (D.C. Cir. 1966) ........................................................................... 12,
13
County of
Rockland v. Primiano Construction Co., Inc.,
409 N.E.2d 951, 953-54 (N.Y. 1980)................................................................................
21
DeGaetano v.
Smith Barney, Inc.,
181 F.R.D. 243, 256 (S.D. N.Y. 1998) ............................................................................... 44
Del Cox v.
Howard, Weil, LaBouisse, Friedrichs, Inc.,
619 So.2d 908 (Miss. 1993) .............................................................................................. 13
Derrickson v.
Circuit City Stores, Inc.,
81 Fair Empl. Prac. Cas. 1533 (D. Md. 1999) ................................................................. 44
Doctor’s Assocs., Inc. v. Casaroto, 517 U.S.
681, 687 (1996) ..................................................... 28
Doctor’s
Associates, Inc. v. Distajo,
66 F.3d 438, 454 (2nd Cir. 1995) ...................................................................................... 33
Engalla v.
Permanente Medical Group,
938 P.2d 903, 923 (Cal. 1997) ................................................................. 14,
16, 17, 21, 22
Entergy
Mississippi Inc. v. Burdette Gin Co.,
726 So.2d 1202, 1207 (Miss 1998) ....................................................................... 30,
31, 35
First Options of Chicago, Inc. v. Kaplan, 514
U.S. 938, 943 (1995) ..................................... 18,
25
Floss v. Ryan’s
Family Steak Houses, Inc.,
211 F.3d 306, 313 (6th Cir. 2000) ..................................................................................... 43
Giles v. New York, 41 F. Supp.2 308, 313
(S.D. N. Y. 1999) ........................................................ 41
Gilmer v. Interstate/Johnson Lane corp., 500
U.S. 20, 24 (1991) ............................. 28,
29, 39, 43
Glass v. Kidder,
Peabody & Co.,
114 F.3d 446, 453 (4th Cir. 1997) ..................................................................................... 21
Graham Oil v. ARCO Products Co., 43 F.3d 1244
(9th Cir. 1994) .............................................. 45
Graham v. Scissor-Tail, 623 P.2d 165 (Cal.
1990) ................................................................ 29,
33
Green Tree
Financial Corp. v. Randolph, 1
21 S. Ct. 513, 521 (2000) ...................................................................................... 28,
42, 43
Grumhaus v. Comerica Securities, Inc., 223
F.3d 648, 652 (7th Cir. 2000) ................................. 14
Henrcik v. Brown
& Root, Inc.,
50 F. Supp.2d 527, 533 (E.D. Va. 1999) .......................................................................... 11
Herrington v.
Union Planters Bank, N.A.
113 F. Supp.2d 1026 (S.D. Miss. 2000) ............................................................................ 44
Hickox by Hickox v. Holleman, 502 So.2d 626,
635 (1987) ........................................................ 28
Holyfield, 476 F. Supp at 109-10 ................................................................................ 31,
32, 35, 38
Hooters of America, Inc. v. Phillips, 173
F.3d 933, 941 (4th Cir. 1999) .......................... 15,
16, 17
International
Union of Operating Engineers, Local 150 v.
Flair Builders, Inc., 406 U.S. 487 (1972) .......................................................................... 22
Iwen v. U.S. West Direct, 977 P.2d 989 (Mont.
1999) ................................................................. 29
Keymer v. Management Recruiters Int’l, Inc.,
169 F.3d 501, 504 (8th Cir. 1999)......................................................................................... 9
Kirksey v. Dye, 564 So.2d 1333, 1336 (1990) .............................................................................. 27
In re Knepp, 229 B.R. 821, 838 (Bankr. N.D.
Ala. 1999) ............................................................. 41
LaChance v.
Northeast Publishing, Inc.,
965 F.Supp. 177, 185 (D. Mass. 1997) ............................................................................. 44
Lauricia v. Microstrategy, Inc., 114
F.Supp.2d 489 (E. D. Va. 2000) ......................................... 15
Leach v. Tingle, 586 So.2d 799, 801-02 (Miss
1991) ................................................................... 11
Lozada v. Dale
Baker Oldsmobile, Inc.,
91 F. Supp.2d 1087 (W. D. Mich. 2000) ..................................................................... 29,
44
Madden v. Kaiser
Foundation Hospitals,
552 P.2d 1178, 1185-86 (Cal. 1976) ................................................................................ 29
In re Managed
Care Litigation,
132 F. Supp.2d 989, 1000-01 (S.D. Fla. 2000) ................................................................. 45
Marble Slab
Creamery v. Wesic, Inc.,
823 S.W.2d 436, 438 (Tex. App. 1992) ............................................................................ 14
Martens v. Smith
Barney, Inc.,
181 F.R.D. 243, 255-56 (S.D. N. Y. 1998) .................................................................. 41,
44
Mitsubishi Motors
Corp. v. Soler Chrysle-Plymouth, Inc.,
473 U.S. 614, 637 (1985) ............................................................................................ 39,
42
M/S Bremen v. Zapata Of-Shore Co., 407 U.S.
1, 12 (1972) ....................................................... 31
Munsey v. Walla
Walla College,
906 P.2d 988 (Wash. App. 1995)....................................................................................... 25
Myers v. Terminix
Int’l Co.,
697 N.E.2d 277, 281 (Ohio Ct. Common Pleas
1998) ..................................................... 42
OMP v. Security
Pacific Business Finance, Inc.
716 F. Supp. 239, 249 (N.D. Miss. 1989) ......................................................................... 31
Paladino v. Avnet
Computer Technologies, Inc.
134 F.3d 1054, 1062 (11th
Cir. 1998).................................................................... 41,
42, 44
Palm Harbor Homes, Inc. v. Crawford, 689
So.2d 3, 8 (Ala. 1997) ............................................ 14
Parrett v. City
of Connersville, Ind.,
797 F.d 690, 697 (7th Cir. 1984) ....................................................................................... 45
Patterson v. Red
Lobster ,
81 F. Supp. 681, 687-88 n.8 (S.D. Miss. 1999)
................................................................. 37
Patterson v. ITT
Consumer Financial Corp.,
18 Cal. Rptr. 2d 563, 566-67 (Cal. App. 1993)
................................................................ 41
Perez v. Global Airport Security Services,
2001 WL 649497 at *4-5 .......................................... 44
R.M. Perez &
Associates, Inc. v. Welch,
960 F.2d 534, 538 (5th Cir. 1992) ..................................................................................... 21
Powertel v. Bexley, 743 So.2d 570 (Fla. Dist.
Ct. App. 1999) ......................................... 29,
33, 36
PPG Industries,
Inc. v. Webster Auto Parts, Inc.,
128 F.3d 103, 107 (2nd Cir. 1997) .................................................................................... 14
Prevot v.
Phillips Petroleum Co., 133 F.Supp.2d 937,
939-40 (S.D. Tex. 2001) .................................................................................................... 24
Prima Paint Corp.
v. Flood & Conklin Mfg. Co.,
388 U.S. 395 (1967) .................................................................................. 19,
20, 23, 24, 25
Raesly v. Grand
Housing, Inc.,
105 F. Supp.2d 562, 568 (S.D. Miss. 2000) ...................................................................... 29
Ritzel
Communications, Inc. v. Mid-American Cellular
Telephone Co., 989 F.2d 966, 969 (8th
Cir. 1993) ............................................................ 14
Rojas v. TK Communications, Inc., 87 F.3d 745
(5th Cir. 1996) .................................................. 24
Sandvik AB v.
Advent Int’l Corp.,
220 F.3d 99, 107 (3rd Cir. 2000) ..................................................................................... 21
W. M. Schlosser
Co., Inc. v. School Board of Fairfax County, Va.
980 F.2d 253, 259 (4th Cir. 1993) ..................................................................................... 19
Shankle v. G-G
Maintenance Management of Colorado,
163 F.3d 1230 (10th Cir. 1999) ................................................................................... 29,
41
Smith v.
Equifirst Corp.,
117 F Supp.2d 557, 563-54 (S.D. Miss. 2000) .................................................................. 38
Smith, Barney,
Harris,