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Attorney Charles W. Shipley Speaks on Messing with Farmers and the Environment

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Tulsa, OKLawyersandSettlements heard from Tulsa attorney Chuck Shipley recently when he alerted us to a recent $21 million class action verdict against OK Foods of Fort Smith, Arkansas on behalf of 300 chicken farmers. When we spoke to him, he was just back from a week off. We didn't need to ask many questions!

LawyersandSettlements (LAS): Where have you studied and practiced law?

Charles W. Shipley (CWS): George Washington University Law School; I got my J.D. in 1971, then got my LL.M. in environmental law in 1972. It was the first LL.M. they granted in environmental law, and in later years I out it was the first in the nation, so I was sort of there in the dawn of the environmental age.

I worked for the Army Corps of Engineers in DC for a time, and also worked with the Department of Justice in their newly formed pollution control section. I was the thirteenth lawyer they hired for pollution control; now they've got hundreds.

I came back to Tulsa in 1977 and have been practicing here ever since. My firm is Charles W. Shipley, PC; I'm pretty much a one-man show these days.

I operate in a co-counselling relationship with a group of lawyers in New York on bigger cases. That's to say, if I find cases that look interesting and look large enough, I go to larger firms with deeper pockets and greater resources and pitch it to them.

Some cases I pitch to local firms. We recently had a case of four girls who had been sexually abused by a school bus driver over in a neighboring county. We also have some Fair Labor Standards Act cases that may qualify as a class action.

LAS: What areas of law do you specialize in?

CWS: I do a lot of work in environmental law, in water rights, and in Native American law. I represented the Cherokee Nation's supreme court and several other tribal clients. In the late 1990s, the then chief of the Cherokee Nation tried to impeach his supreme court. The federal Department of Housing and Urban Development had given the Cherokee Nation money to protect their housing developments against drug dealers. It turned out the chief was using the HUD money to wiretap his opponents on the tribal council. So I wound up representing them, too.

I'm also representing the Arbuckle Master Conservancy District in south-central Oklahoma in their efforts to protect the Arbuckle-Simpson Aquifer. There's an aggregate company called Meridian Aggregates, a subsidiary of Martin Marietta, that's trying to dig into the aquifer. We now have a case before the Oklahoma Supreme Court challenging the right of a mining company to intentionally dig into a groundwater aquifer.

They want to dig to 280 feet into it; that will affect the groundwater flow and the ability of the aquifer to feed the springs and wells that it supplies. On our side is the state water board, which is trying to rein them in, and the six cities in the Arbuckle conservancy district that depend on the aquifer for their water supply. Before that, I represented them against a group of developers who were trying to build a 100-mile pipeline to move the water from the aquifer to Oklahoma City. We won 8-1 in the state Supreme Court. That was an interesting case.

LAS: The case against OK Industries that you brought to the attention of LawyersandSettlements was a class action on behalf of 300 farmers in LeFlore County, Oklahoma. What was the basis of the suit?

CWS: I didn't handle that case myself; Crowe & Dunlevy in Oklahoma City handled it. Charles Goodwin was the lead lawyer. Good guy. Crowe & Dunlevy is the largest firm in Oklahoma. I've never known them to represent a plaintiff in a class action on a contingency basis—in runs completely counter to their corporate personality.

Harry Woods, one of the senior partners, his father was a union organizer in LeFlore County, and he came by and told Harry, "This is an outrage. I want you to get involved." And by god, he did. If the farmers had not had the strong litigation backing they got from Crowe & Dunlevy, they never could have pulled it off. They approached me to take the case, but I just told them there was no way, I didn't have the resources, I didn't have the money. But then Harry Woods showed up, and I said, "Go with these guys!" I was thrilled to see them take it on.

If people in the cities knew what is being done to farmers in the outlying areas, they'd be outraged. In the OK Foods case, a jury found that OK is treating their growers like serfs. They are the only integrated chicken processors in LeFlore County. If you want to grow chickens, you have to sign up with OK Foods—they draw up the contract, they tell you who to hire to build your poultry houses according to their specifications and with their oversight, and you have to own your land free and clear. They'll introduce you to a bank but they will not co-sign a loan with that bank for you.

OK Foods will bring you your first flock of chickens, but after that you have to please them or they will stop. Their fieldmen visit the farms once a week or so and tell the farmer to cut the grass or do this or that. If they don't believe that you are doing your job properly, they have the unilateral right to stop bringing you birds to raise.

For the last three to five years, OK Foods requires you to build a minimum of six 50,000-bird poultry houses; that's about 300,000 birds per farmer. The company breeds the chicks, they bring them to you at one week old, you keep them until they're six to eight weeks old, then they are collected, slaughtered, and prepared for the market.

If you have been a good boy, they may bring you a new flock as soon as one week later. It might be as much as three weeks or five weeks later if they want to show their displeasure. Meanwhile, you have to keep making your bank payments, and if you don't do well, you're out of business.

There's nothing else you can do. It costs 1.5 to $1.75 million to build these poultry houses, for which there is no other use. Once you do that, you are in hock to the processor. The Eastern District Court jury in the OK Foods case found that this is a monopsony, which is the reverse of a monopoly. It means that the purchaser of a good has exclusive control of the market.

If you have a monopsony, you have the power to unilaterally change the terms of the contract however you want or draw a contract that is so one-sided that the grower has no chance to negotiate. It's called a contract of adhesion, since it gives the grower virtually no rights.

Then they turn right around and tell the legislators that they're trying to help the Mom and Pop farmer, but it ain't Mom and Pop that's doing well or is controlling the market. But they're so afraid to get cut off from the chicken flocks that you would be hard pressed to find any grower who would complain.

The history of that is that when five growers—two of whom are friends of mine—filed the class-action lawsuit, OK Foods fired all of them. Even Ron White, the very conservative, pro-business judge who heard the case, wouldn't stand for that. He reinstated them and certified the class, but then he turned around and gutted the case by dismissing the most important of the claims.

That was appealed to the Tenth Circuit, who sent it back with instructions to let all the claims go to the jury. There was also a motion to recuse Judge White from the case, since he was dating one of OK Foods' lawyers, but he decided that wasn't necessary.

LAS: You've described "Big Chicken" as creating "tyranny in the heartland". Is this what you mean by that?

CWS: They're both screwing our farmers and screwing our environment by using our streams and rivers as private sewers that they're filling with poultry poop that they spread on the ground under the guise of fertilizer. The state Attorney General has just finished two weeks of hearings asking the US District Court to order nine poultry companies like Tyson, Cargill, and some smaller ones to stop spreading the stuff in the Illinois River watershed.

The city of Tulsa has a pleading in the same district court to reopen a settlement from 2003 and set a more restrictive land application standard than was agreed to then. This affects the Eucha-Spavinaw watersheds, which are part of the city's water supply. We applied to intervene in that effort to reopen, because the poultry processors have been exporting their excess poop from Eucha-Spavinaw into the Grand Lake watershed, which is the largest recreational lake in Oklahoma, 26 miles long. We were denied that intervention, but we're appealing the denial in the 10th Circuit Court of Appeals. So depending on what happens with those cases, our case may rise dramatically in importance.

The EPA has a standard for how much e. coli and other bacteria can be present in water before it is unfit for "primary body contact". That means if you're in a canoe on a river or lake, and you decide to jump overboard into the water—which happens a lot around here—that water needs to meet the primary body contact standard, or you'd better just stay in your canoe.

It's a source of embarrassment and shame that our Illinois River fails that standard, as do every one of the Oklahoma scenic rivers in the eastern part of the state. That's near where the poultry processors are located in Arkansas and Missouri, which is uphill there. They make the money and all the poop flows downstream. It's a problematic area, especially when the big companies hide behind the skirts of the Mom and Pop producers.

The poultry industry here is an anachronistic, family-based business that grew out of backwoods Arkansas with a screw-you attitude. Simply because they've been able to use the Mom and Pop shield, they've been able to avoid control. These guys are the last industry that has been able to defer virtually any kind of compliance with the pollution laws, and it's solely because of the agricultural lobby.

I was hired by a group of farmers who were under contract to Peterson Farms, who put an arbitration clause in the contact that said that the framers would never sue. Instead, they promised that they would go to Dallas, Texas for arbitration, and if they did, they'd pay $2500 to the National Arbitration Association beforehand. Now, these people do not have the ability to pay $2500 up front or to travel to Dallas. So we got 117 people to sign a very deferential letter to Peterson Farms saying only, "This is beyond the pale, please reconsider." I doubt that Tyson Foods would have reconsidered, but Peterson Farms has a reputation for having a bigger heart than others, and they did reconsider and changed the clause.

Lloyd Peterson, who founded the company and passed away at age 94 last fall, was always a bit of a benevolent dictator. The others are just balls-out tyrants.

I got into the bus driver sexual abuse case that I mentioned earlier because one of Peterson's growers called me up and said, "No one else is stupid enough to go up against the school board and do this." And that is what I do.

I'd probably be a wealthier man if I was a bit more judicious, but I get my heartstrings tugged and I go off tilting at windmills.



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