In a case arising out of a series of cattle sales gone wrong, Fox Rothschild attorneys John Haggerty, Jim Clark and Jeremy Lacks recently obtained a summary judgment award of more than $740,000 for two central Pennsylvania cattle farms.
From December 2016 to July 2017, our clients, Nicholas Farms and Hottle Livestock, sold hundreds of cattle to an upstate New York cattle dealer called CAV Farms through its agent and middleman, Michael Rogers. CAV Farms, which is owned and operated by Jeffrey Snider, resold the cattle as processed beef to online grocer Fresh Direct for a substantial profit. Our clients received only a fraction of what they were owed on these cattle sales. When confronted, Snider claimed that his business partner—Rogers—had carried out the transactions without his knowledge or approval as part of a fraudulent scheme. Around the same time, Rogers, who was riddled with debts and facing a variety of criminal charges, disappeared.
We filed suit against Snider, CAV and a related entity in the Middle District of Pennsylvania in August 2018 alleging violations of the federal Packers & Stockyards Act, which protects livestock sellers by requiring full payment within two days of a sale, along with breach of contract and various equitable claims. Following two years of discovery, including a protracted, months-long effort to compel Rogers’ deposition (after he initially refused to testify based on the Fifth Amendment), we moved for summary judgment in September 2020.
On March 9, 2021, Judge Matthew Brann issued a 27-page opinion granting our Motion and entered judgment in our favor as to the Packers & Stockyards Act and breach of contract claims. Judge Brann criticized defendants’ legal arguments and cast doubt on their attempts to distance themselves from Rogers. At the outset, he summed up the case by noting that, having agreed to buy our clients’ cattle through Rogers, defendants “shorted Plaintiffs, refusing to pay, and claimed that Rogers was a ne’er do well, actually in the midst of defrauding Defendants through a sort of cattle-shifting Ponzi scheme.” Judge Brann dismissed this theory as unsupported by the record evidence.
On the key legal issues, Judge Brann found that the defendants were “dealers” for purposes of the Packers & Stockyards Act and that Rogers had carried out the transactions with defendants’ implied authority as their agent. Judge Brann further found that Snider was individually liable for the acts of the corporate entities he controlled under both the Packers & Stockyards Act and the doctrine of “piercing the corporate veil.” Judge Brann found that veil-piercing was appropriate in light of undisputed evidence of: (i) Snider’s domination of the corporate entities; (ii) the closely held nature of corporate entities; (iii) the absence of any corporate formalities; (iv) Snider’s commingling of corporate and personal funds; and (v) Snider’s “careful effort” to liquidate the entities’ assets and render them judgment-proof after Fresh Direct severed ties with defendants.
In all, Judge Brann awarded our clients over $743,000 to compensate them for their cattle, including prejudgment interest at a rate of 9% dating back to 2017.