Federal lawsuit in Texarkana accuses JBS of unfair dealings with Arkansas pig farmer

Source: Texarkana Gazette

A Howard County, Arkansas, pig farmer filed a lawsuit in Texarkana federal court Tuesday against a subsidiary of global food giant JBS.

The complaint accuses JBS of creating a dire financial situation for Justin Garner by breaching its contract with him, failing to pay him for animals and making it impossible for him to sell his farm. The suit against JBS Live Pork was filed on Garner’s behalf in the Texarkana Division of the Western District of Arkansas by lawyers Todd Turner of Arkadelphia, Arkansas, and Corey McGaha of Little Rock.

Turner said Friday the complaint accurately sums up Garner’s claims against JBS. A representative for JBS could not be reached Friday for comment.

“JBS is one of the world’s largest food companies with operations in 15 countries. … It is the second largest pork producer in the world, with operations in the United States, Brazil, the United Kingdom and Australia,” the complaint states. “JBS and three other companies control almost 70% of the U.S. pork industry.”

JBS has agreed to pay millions to settle anti-trust lawsuits alleging price fixing and other misconduct, while denying any wrongdoing.

JBS contracts

The complaint alleges that JBS does business with pig farming operations under terms that are “extremely favorable to JBS” and that essentially convert independent farmers into contract employees who perform work for JBS.

“Despite bearing the entire investment costs of a farming facility, the farmers are only paid a set cost per pig as established by JBS. Meanwhile, JBS retains control over the production processes and the amount of production,” the complaint states. “Even under perfect conditions, many farmers are barely able to generate enough revenue under these term contracts to pay their expenses. In this case, JBS unilaterally terminated Garner’s contract two years before the end of the contract term and refused to pay him for the animals it removed.”

Garner’s history with JBS

Justin Garner was working as a Howard County sheriff’s deputy and operating a family farm when he began to consider the purchase of an existing 40-acre hog farm used to produce pigs for JBS, according to the complaint. Without a JBS contract, the property held no value for Garner.

Garner received a letter of intent for a five-year contract from JBS in November 2017 that is attached as an exhibit to the complaint. A second exhibit is a March 2018 “sow production agreement” between Garner and JBS with a term ending in March 2023 and an option to continue on a “three-year evergreen term” if not terminated by either party.

The complaint describes Garner’s contract with JBS as “astonishingly one-sided” and includes a long list of requirements for Garner and disclaimed warranties for JBS.

The contract also gave JBS the right to unilaterally “amend, revise, or eliminate any standard, requirement or policy identified in this agreement,” including “changing the amount it owed Garner for his performance,” the complaint alleges.

Garner credits his September 2021 resignation from the Howard County Sheriff’s Office to “repeated requests” from JBS.

“Early in the parties’ dealings, JBS representatives implored Garner to resign as a deputy sheriff so that he could devote more time to the operation of the hog farm,” the complaint states.

Garner claims he performed in compliance with the contract from March 2018 until November 2021 but JBS did not.

The complaint accuses JBS of changing the per-pig weight specifications in 2021 and of docking Garner $5 per pig for any animal under 8 pounds at shipping, allegedly costing Garner thousands. JBS allegedly failed several times to provide Garner with gilts, female pigs expecting their first litter. Without the gilts, Garner’s ability to produce was diminished, allegedly costing Garner thousands.

A canceled contract

Garner claims JBS reps surprised him when they came to his farm Nov. 8 and told him his contract was being terminated.

“The JBS representatives provided Garner with a document and told him he had to sign it,” the complaint states.

Garner allegedly asked for time to look over the papers but was told that if he didn’t sign right then, JBS “would not provide him any payment of any kind.”

Garner refused to sign and took photos of the document.

“The document was a waiver, drafted by JBS, designed to prevent Garner from exercising any and all legal rights or pursuing any claims against JBS for its unilateral termination of the contract. The document also required Garner to keep its terms ‘secret and confidential,'” the complaint states.

JBS allegedly “took possession of all the porcine livestock on his farm and refused to pay him anything.”

According to the complaint, Garner was forced to shutter the hog farm and faces a grim financial aftermath.

Garner claims prospective buyers have walked away after being told JBS wasn’t interested in contracting with the facility, allegedly telling one that the farm was “out-of-date,” and because of shipping costs associated with its location.

Garner complains that a huge waste lagoon that would require thousands to clean now sits on the idle property.

Causes of action

Garner’s complaint accuses JBS of violating the contract, misleading him, interfering with his attempts to sell the farm and failing to pay him for pigs taken by the company. Garner alleges JBS is acting intentionally and with malice and that its conduct is “designed to punish Garner” through its alleged breach of contract, tortious interference and conversion.

Garner is seeking actual and exemplary damages “to punish JBS and to deter JBS and others from engaging in similar activity in the future.”

Garner is asking for a jury trial. JBS has not filed a response to Garner’s complaint.

The case is assigned to U.S. District Judge Susan O. Hickey.