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Sanderson Farms6/26/2003
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. The Gatlins' complaint sought compensatory and punitive damages for breach of contract and other claims relating to Sanderson Farms' termination of their Broiler Production Agreement (the Agreement). Sanderson Farms moved to dismiss and compel arbitration. The trial court denied the motion, holding that by refusing to pay a one-half share of the arbitration filing fees, Sanderson Farms breached its contract with Mr. Gatlin, so that Sanderson Farms can no longer compel arbitration.
. On interlocutory appeal, Sanderson Farms argued that the trial court erred by holding that Sanderson Farms waived its right to compel arbitration. On cross appeal, the Gatlins argued that the arbitration clause was unconscionable and thus unenforceable.
. Based on the law, both federal and state, and the facts before this Court, I believe that the amount Mr. Gatlin was billed, before his arbitration hearing, was so exorbitant as to effectively deny him any legal recourse, and thus was unconscionable. However, because the record is not developed sufficiently to determine whether Mr. Gatlin was indeed required to pay that amount, I would remand for further proceedings so that this determination may be made by the trial court. Because the possibility exists that Mr. Gatlin may not be required to pay the unconscionable fee, I believe it is necessary to consider his arguments regarding the unconscionability of waiving a possible award of punitive damages and the alleged waiver by Sanderson Farms of its right to arbitrate. The plurality fails to recognize, however, that the law in other state courts and the federal courts clearly states that these issues are properly considered by the arbitrator, not by the court.
. As the plurality points out, Mr. Gatlin had been involved in the business of growing chickens for Sanderson Farms some seventeen years prior to the time when he signed the Agreement which is the subject of this case. As a member of the Mississippi Contract Poultry Growers Association, Mr. Gatlin was well aware of discussions and negotiations concerning the changes to the Agreement, including the addition of a mandatory arbitration clause. Although the plurality places much emphasis on the fact that the arbitration clause did not appear until paragraph 27 of the contract, there is no question that Mr. Gatlin knew about it and understood its ramifications when he signed the Agreement on January 1, 1997. The relevant portions of that contract are excerpted below:
BROILER PRODUCTION AGREEMENT
23. IMMEDIATE TERMINATION. This Agreement may be immediately terminated by Sanderson at any time upon written notice for any of the following reasons:
i.The Grower fails to comply with applicable federal, state, or local laws or regulations . . . .
27. ARBITRATION. Any controversy or claim arising between the parties (and not resolved pursuant to Paragraph 27 above), including but not limited to, disputes relating to this Agreement, the arbitrability of any dispute relating to this Agreement , or of any breach of this Agreement, will be settled by binding arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association by a panel of three arbitrators. . . . By entering into this Agreement, the parties waive the right to have any dispute arising between them tried and adjudicated by a court of law.
Upon objection by any party, multi-party arbitration shall not be utilized. . . . The arbitrators will have the authority to award actual money damages . . . , specific performance, and temporary injunctive relief, but the arbitrators shall not have the authority to award exemplary or pun
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