      Case: 12-10063          Document: 00512130712              Page: 1      Date Filed: 01/31/2013




           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT  United States Court of Appeals
                                                    Fifth Circuit

                                                                                        FILED
                                                                                     January 31, 2013

                                             No. 12-10063                             Lyle W. Cayce
                                                                                           Clerk



In the Matter of: PILGRIM’S PRIDE CORPORATION,

                         Debtor

------------------------------------------------------------------------------------------------------------

CLINTON GROWERS; BILLY APPLEBY; RICKY ARNOLD; DEBBIE
ARNOLD; LILLIAN BASS; ET AL,

                         Appellants,

v.

PILGRIM’S PRIDE CORPORATION, and the other movants/Reorganized
Debtors: PFS Distribution Company, PPC Transportation Company, To
Ricos, Ltd., To Ricos Distribution, Ltd., Pilgrim’s Pride Corporation of West
Virginia, Inc., and PPC Marketing, Ltd.,

                         Appellee.



                      Appeal from the United States District Court
                           for the Northern District of Texas
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                                    No. 12-10063

Before DeMOSS, SOUTHWICK, and HIGGINSON, Circuit Judges.
HIGGINSON, Circuit Judge:
      Appellee Pilgrim’s Pride Corporation (“PPC”) contracted with Appellants
Clinton Growers (the “Growers”) to raise chickens. Citing a downturn in the
poultry industry, PPC terminated its contracts with the Growers and filed for
bankruptcy. The Growers filed claims against PPC seeking promissory estoppel
relief, alleging that the company’s oral promises of a long-term relationship
induced them to invest in chicken houses. The district court affirmed the
bankruptcy court’s grant of summary judgment for PPC on the ground that the
written contracts between PPC and the Growers barred the alleged oral
promises. We also AFFIRM.
1. Facts and Proceedings
      PPC acquired ConAgra Poultry Company in 2003.                   As part of the
acquisition, PPC began operating a chicken processing plant in Clinton,
Arkansas.
      PPC contracted with chicken farmers to supply the plant with poultry.
The farmers received chicks and feed from PPC. In exchange, the farmers built
and maintained chicken houses on their land at a cost of about $150,000 per
house. The farmers raised the chicks to maturity and then sold them back to
PPC at a price based on the their weight.
      The Growers are a collection of more than 100 chicken farmers who
supplied poultry to PPC.1 Each Grower signed individual contracts, but the
agreements contained similar terms. Section C of a representative contract




      1
        Many Growers had entered into contracts with ConAgra that PPC continued to honor
after the acquisition; others signed agreements with PPC after the company acquired
ConAgra.

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                                      No. 12-10063

specified that the agreement was “to continue on a flock to flock basis.”2 Section
D stated that either party could terminate the contract without cause between
flocks—which lasted between four and nine weeks—but that PPC could end the
agreement at any time for “cause or economic necessity.” The contracts also
included: sections describing the Growers’ compensation;3 sections detailing the
Growers’ obligation to maintain chicken houses to PPC’s specifications;4 a
merger clause representing that the contract “supersedes, voids and nullifies”
all prior agreements and oral statements;5 and a paragraph preventing oral
modifications.6

       2
        Section C provided in full:
       Term. The term of this Agreement shall commence on the date of execution of
       this Agreement, continue on a flock to flock basis, and shall terminate upon
       completion of the engagement(s) subject to the right of the Company to
       terminate this Agreement upon written notice to the Independent Grower in the
       event the Independent Grower does not timely perform its obligations
       hereunder as provided in this Agreement.
       3
        Section B and Exhibits A and B to the agreement detailed the Growers’ pay
arrangement with PPC.
       4
         Section G, ¶ 1 provided: “Basic Housing. The Independent Grower shall provide and
maintain proper housing, equipment, litter and utilities in accordance with the Company’s
specifications and applicable regulations.”
       5
         Section H, ¶ 9 provided in full:
       Prior Agreements/Entire Agreement. This agreement supersedes, voids and
       nullifies any and all previous Broiler Production Agreements and all other
       previous agreements governing the relationship between Independent Grower
       and Company. The Independent Grower and Company hereby release and
       extinguish all claims that they may have against each other under any previous
       Broiler Production Agreement and all other previous agreements governing the
       relationship between Independent Grower and Company. This Agreement, and
       any Exhibits hereto, constitute the entire agreement between the parties, and
       those documents supersede all oral statements and other communications made
       before the execution of those documents. Independent Grower acknowledges
       that in entering into this Agreement, he/she has not relied upon any statements
       that are not contained in this document, and/or the Exhibits hereto.
       6
         Section H, ¶ 12 provided: “No Modification Except in Writing. The parties agree that
this Agreement and the Exhibits hereto may not be modified except in writing signed by both
the Company and Independent Grower.”

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                                       No. 12-10063

       The Growers contend that, notwithstanding the terms of the contract, PPC
officials made oral representations that the company would maintain a long-
term relationship with them. For example, the Growers claim that PPC assured
them: that PPC “was here for the long haul”; that the Growers would receive
chickens as long as they met PPC’s specifications; and that the Growers would
“more than cover the costs of building and raising the chickens” in the long run
if they upgraded their chicken houses.
       Citing economic stress caused by an increase in the cost of chicken feed,
and a drop in the price of chickens, PPC idled the Clinton plant and terminated
its contracts with the Growers in 2008. The Growers brought promissory
estoppel claims against PPC when the company filed for Chapter 11 protection
in late 2008.7
       As the bankruptcy case unfolded, Northern District of Texas Judge Terry
Means rejected similar estoppel claims brought by other growers against PPC.
See City of Clinton v. Pilgrim’s Pride Corp., 654 F. Supp. 2d 536, 544-45 (City of
Clinton I) (N.D. Tex. 2009). The district court, applying Texas law,8 observed
that estoppel “applies only where no contract on the subject matter exists.” Id.
at 544. The district court found that the contracts between PPC and the growers
addressed the growers’ “obligation to comply with Pilgrim’s decisions regarding
housing of the chickens, the duration of the grower arrangements, and how the
growers would be compensated.” Id. The district court also found that PPC’s




       7
        The Growers also alleged fraud and a state law claim, but do not raise these claims
on appeal.
       8
         The City of Clinton I growers were from multiple states, including Texas and
Arkansas. City of Clinton I, 654 F. Supp. 2d at 539. The district court observed that Texas and
Arkansas law were “the same regarding promissory estoppel,” and chose to rely on Texas law.
Id. at 544 n.1.

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                                       No. 12-10063

alleged oral promises—that, for example, the company “was committed to
growers for the long run”—were too vague to induce reliance. Id. at 544-45.9
       PPC filed multiple summary judgment motions in bankruptcy court after
the City of Clinton I ruling. PPC argued that the Growers’ promissory estoppel
claims failed because: the written contracts covered the same subject matter as
the alleged oral promises; the alleged promises were too vague to rely; and the
merger doctrine, parol evidence rule, statute of frauds, and statute of limitations
barred the Growers’ claims arising from the alleged promises. PPC also argued
that the City of Clinton I decision bound the bankruptcy court under the law-of-
the-case doctrine.
       Northern District of Texas Bankruptcy Judge D. Michael Lynn entered
summary judgment for PPC, finding that Judge Means’ ruling was binding
under the law-of-the-case doctrine. In re Pilgrim’s Pride Corp., 442 B.R. 522,
530-31, 536-37 (Bankr. N.D. Tex. 2010). Judge Lynn also found that, even if the
doctrine did not apply, the contracts barred the Growers’ estoppel claims because
both the contracts and the promises covered the same subject matter: the
duration of the agreement. Id. at 535-36.
       Northern District of Texas Judge John McBryde affirmed the bankruptcy
court’s ruling, but not on law-of-the-case grounds. Clinton Growers v. Pilgrim’s
Pride Corp. (In re Pilgrim’s Pride Corp.), BR 08-45664-DM111, 2011 WL
6396637, at *2 (N.D. Tex. Dec. 19, 2011). Although Judge McBryde found the
bankruptcy court’s law-of-the-case holding “persuasive,” he held that the


       9
         In a related case also before Judge Means, the City of Clinton sued PPC in connection
with the closing of the Clinton plant. City of Clinton v. Pilgrim’s Pride Corp., 653 F. Supp.2d
669, 670-71 (City of Clinton II) (N.D. Tex. 2009). Clinton claimed that it invested in
infrastructure in reliance on PPC’s promises to keep its plant open. Id. Judge Means found
that the doctrine of promissory estoppel did not apply because PPC’s promises were too vague
to induce reliance. Id. at 676-77. This court affirmed Judge Means’ ruling, agreeing that PPC’s
promises were too vague. City of Clinton v. Pilgrim’s Pride Corp., 632 F.3d 148, 155 (City of
Clinton III) (5th Cir. 2010).

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                                     No. 12-10063

contracts barred the Growers’ promissory estoppel claims because they covered
the same subject matter as PPC’s oral representations. Id.               The Growers
appealed.
2. Standards of Review
      This court reviews the decision of a district court sitting as an appellate
court in a bankruptcy case “by applying the same standards of review to the
bankruptcy court's findings of fact and conclusions of law as applied by the
district court.” Wooley v. Faulkner (In re SI Restructuring, Inc.), 542 F.3d 131,
134-35 (5th Cir. 2008). “Generally, a bankruptcy court’s findings of fact are
reviewed for clear error, and its conclusions of law are reviewed de novo.” Id. at
135. A grant of summary judgment is a conclusion of law that is reviewed de
novo. SeaQuest Diving, LP v. S&J Diving, Inc. (In re SeaQuest Diving, LP), 579
F.3d 411, 417 (5th Cir. 2009). This court may affirm on any grounds in the
record. Bonneville Power Admin. v. Mirant Corp. (In re Mirant Corp.), 440 F.3d
238, 245 (5th Cir. 2006).
3. The “Contract Bar”
      A party alleging promissory estoppel under Arkansas law10 must show that
there is “[a] promise which the promisor should reasonably expect to induce
action or forbearance on the part of the promisee or a third person and which
does induce such action or forbearance.” Van Dyke v. Glover, 934 S.W.2d 204,
209 (Ark. 1996) (quoting the RESTATEMENT (SECOND)              OF   CONTRACTS, § 90).
However, promissory estoppel applies only when “the elements of a contract
cannot be shown.” Skallerup v. City of Hot Springs, 309 S.W.3d 196, 201 (Ark.
2009); see also Heating & Air Specialists, Inc. v. Jones, 180 F.3d 923, 934 (8th



      10
         The contracts between PPC and the Growers specify under the heading “Choice of
Law and Venue” that the “substantive laws of the State in which the farm is located shall
govern the interpretation of this Agreement.” The Growers’ farms are located in Arkansas,
and both parties agree that Arkansas law governs the substantive issues in this case.

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                                  No. 12-10063

Cir. 1999) (“The courts of Arkansas . . . have not applied [promissory estoppel]
in order to determine the parties’ rights under a contract that is otherwise
enforceable. Their failure to do so reflects the widely accepted principle that
promissory estoppel is applicable only in the absence of an otherwise enforceable
contract.”).   This “contract bar” doctrine requires that courts “never
accommodate[ ] a party with an implied contract when [the party] has made a
specific one on the same subject matter.” Lowell Perkins Agency, Inc. v. Jacobs,
469 S.W.2d 89, 93 (Ark. 1971). As a result, a party alleging promissory estoppel
can succeed only by showing that the written contract does not cover the subject
matter underlying the promissory estoppel claim. See 17A AM. JUR. 2D Contracts
§ 13; see also Glenn Mech., Inc. v. S. Ark. Reg’l Health Ctr., Inc., 278 S.W.3d 583,
586-87 (Ark. Ct. App. 2008) (finding that a written contract describing
compensation barred the defendant’s alleged promises of extra pay because both
the contract and the promises addressed compensation); Moore v. Keith Smith
Co., No. CA 08-884, 2009 WL 1232094, at *3-5 (Ark. Ct. App. May 6, 2009)
(unpublished) (finding that a contract with a flock-to-flock term barred alleged
promises of a long-term relationship to poultry farmers because “[p]romissory
estoppel is not to be used as a vehicle to engraft a promise on a contract that
differs from the written terms of the contract”).
      Here, the contracts between PPC and the Growers bar the Growers’
promissory estoppel claims because the contracts and the claims cover the same
subject matter: the duration of the agreements. The essence of PPC’s alleged
oral representations—for example, to commit to the Growers “for the long
haul”—is the promise of a long-term relationship. The plain language of the
contracts, however, specifies and is sure that the agreements between PPC and
the Growers are to “continue on a flock to flock basis”—a time period spanning
between four and nine weeks. Promises of a long-term relationship address the
same durational subject matter as the continual short-term relationship

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                                      No. 12-10063

envisioned by the written “flock-to-flock” term. See Moore, 2009 WL 1232094, at
*3-5.
        The Growers also argue that the oral promises—for example, that the
Growers would “more than cover the costs of building and raising the chickens”
in the long run if they upgraded their chicken houses—not only addressed the
written agreements’ duration, but also enlarged the agreements’ scope by
inducing the Growers to invest in chicken houses. To the extent that we
construe PPC’s alleged oral promises to address subject matter other than
duration, the plain language of the contracts bars the Growers’ claims by
detailing the Growers’ compensation, along with their obligation to maintain the
chicken houses to PPC’s specifications.11 As the district court correctly observed:
“No plausible argument can be made that the statements on which Clinton
Growers rely in support of their promissory estoppel theory are not directly dealt
with in their broiler production contracts. The subjects of those statements are
express elements of the contracts.” See Clinton Growers, 2011 WL 6396637, at
*6.
        The Growers argue that the Arkansas Supreme Court’s holding in Tyson
Foods, Inc. v. Davis, 66 S.W.3d 568 (Ark. 2002), that a long-term oral promise
is not the “same subject matter” as a short-term written one controls the
outcome in this case. In Tyson, a hog processing company entered into a year-to-
year contract with a hog grower that resembled the arrangement between the
Growers and PPC. Tyson, 66 S.W.3d at 573. The grower claimed that he
invested in hog-growing infrastructure in reliance on the company’s promises


        11
          The Growers argue it would have been “glaringly illogical” to borrow, and for banks
to loan, large amounts of money to invest in the chicken houses based solely on the flock-to-
flock written contract. Even if this were the case—the Growers provided the banks with
copies of the flock-to-flock contracts—whether the Growers’ decisions to invest in chicken
houses were logical has no bearing on whether the written contracts covered the same subject
matter as the alleged oral promises.

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                                   No. 12-10063

that he could “grow[ ] hogs all his life if he wanted to.” Id. at 572-74. He also
claimed that Tyson knew at the time it made this promise that it intended to end
its relationship with the grower. Id. at 578. The grower sued the company for
negligence, fraud, and promissory estoppel after the company declined to supply
more hogs. Id. at 574-75. A jury found for the grower without explaining the
grounds for its decision. Id. at 576. The Arkansas Supreme Court affirmed,
finding—under the heading “Fraud,” after discussing the elements of
fraud—that there was evidence to support the jury’s verdict. Id. at 576-78. The
Court observed: “We are left without recourse to determine whether the jury
found liability on fraud, promissory estoppel, negligence, or on all of the theories.
We will not question nor theorize about the jury’s findings.” Id. at 578.
      The Tyson decision is inapplicable because the Tyson Court did not base
its ruling on promissory estoppel. The Court made clear that it did not rely on
a particular legal ground but instead on “the proposition that this court has
shown a reluctance to invade the sanctity of the jury room in order to impeach
a jury’s verdict.” Id. at 578. To the extent that the court considered the parties’
substantive arguments, it discussed fraud at length, but only referenced
promissory estoppel in passing. Id. at 576-78. As the bankruptcy court in this
case explained: “The [Tyson] Court does not describe the elements of promissory
estoppel in Arkansas or make any statement that could be construed as a
holding that promissory estoppel actions can be maintained in Arkansas even
if a contract exists between the parties.” In re Pilgrim's Pride, 443 B.R. at 533.
The Arkansas Supreme Court confirmed the viability of the contract bar doctrine
in Skallerup, 309 S.W.3d at 201: “Promissory estoppel applies when the
elements of a contract cannot be shown.” The Growers argue that, even if Tyson
does not control promissory estoppel, it controls on “same subject matter.”
However, the Tyson court does not address what constitutes the “same subject
matter.”

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                                  No. 12-10063

      The Tyson decision also is distinguishable factually because, unlike in
Tyson, the Growers have not shown that PPC knew that it would end its
relationship with them when the company made its alleged promises of a long-
term relationship. PPC contends, and the Growers do not rebut, that it intended
to maintain its relationship with the Growers, but did not foresee the “severe
economic stress” that caused the company to idle the Clinton plant and
terminate its contracts with the Growers. This court distinguished Tyson
factually in rejecting the City of Clinton’s similar promissory estoppel claims:
      The cases are totally unlike. In [Tyson], the plaintiff, an
      independent hog raiser, presented evidence that defendant, Tyson
      Foods, several times specifically promised him that he would be
      provided hogs to raise over a long many-year term, but that Tyson
      had all along actually planned to send its hogs to other units as soon
      as they became operational. Indeed, Tyson had admitted that it all
      along intended its business with the plaintiff to be a stop-gap until
      its temporarily interrupted Missouri operations could resume, and
      was instead only contesting that representations to the contrary had
      ever been made. In contrast, the City in this case has alleged no
      facts sufficient to support its conclusory assertion that [the PPC
      official] knew his statement to be false when made. [The PPC
      official's] alleged statement is so vague as to be essentially
      meaningless.
City of Clinton III, 632 F.3d at 154-55.
      In sum, the contracts between PPC and the Growers bar PPC’s oral
promises because the contracts address the same subject matter as the Growers’
claims.   Because we find that this contract bar precludes the Growers’
promissory estoppel claims, we do not address the other issues raised on appeal.
4. Conclusion
      Accordingly, we AFFIRM the grant of summary judgment.




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