Statements on Introduced Bills and Joint Resolutions

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

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By Mr. GRASSLEY (for himself, Mr. FEINGOLD, Mr. HARKIN, and Mr. HAGEL):

S. 2131. A bill to amend title 9, United Stares Code, to provide for greater fairness in the arbitration process relating to livestock and poultry contracts; to the Committee on the Judiciary.

Mr. GRASSLEY. Mr. President, I rise to re-introduce the Fair Contracts for Growers Act of 2005. This bill would simply give farmers a choice of venues to resolve disputes associated with agricultural contracts. This legislation would not prohibit arbitration. Instead, it would ensure that the decision to arbitrate is truly voluntary and that the rights and remedies provided for by our judicial system are not waived under coercion.

I certainly recognize that arbitration has tremendous benefits. It can often be less costly than other dispute settlement means. It can also remove some of the workload from our Nation's overburdened court system. For these reasons, arbitration must be an option--but it should not be a coerced option.

Mandatory arbitration clauses are used in a growing number of agricultural contracts between individual farmers and processors. These provisions limit a farmer's ability to resolve a dispute with the company, even when a violation of Federal or State law is suspected. Rather than having the option to pursue a claim in court, disputes are required to go through an arbitration process that puts the farmer at a severe disadvantage. Such disputes often involve instances of discrimination, fraud, or negligent misrepresentation. The effect of these violations for the individual farmer can be bankruptcy and financial ruin, and mandatory arbitration clauses make it impossible for farmers to seek redress in court.

When a farmer chooses arbitration, the farmer is waving rights to access to the courts and the constitutional right to a jury trial. Certain standardized court rules are also waived, such as the right to discovery. This is important because the farmer must prove his case, the company has the relevant information, and the farmer can not prevail unless he can compel disclosure of relevant information.

Examples of farmers' concerns that have gone unaddressed due to limitations on dispute resolution options include; mis-weighed animals, bad feed cases, wrongful termination of contracts, diseased swine or birds provided by the company, fraud and misrepresentation to induce a grower to enter a contract, and retaliation by companies against farmers who join producer associations.

During consideration of the Farm Bill, the Senate passed, by a vote of 64-31, the Feingold-Grassley amendment to give farmers a choice of venues to resolve disputes associated with agricultural contracts.

I have some letters supporting this legislation and ask unanimous consent that they be printed in the RECORD.

I also ask unanimous consent that the text of bill be printed in the RECORD.

There being no objection, the material was ordered to be printed in the RECORD, as follows:

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