JMR FARMS v. C.H. ROBINSON WORLDWIDE

Background

A class of produce growers ("Growers") sued C.H. Robinson Worldwide, Inc., C.H. Robinson Company, Inc., and C.H. Robinson Company (collectively, "CHR") alleging violations of the Perishable Agricultural Commodities Act ("PACA"), 7 U.S.C. § 499a et seq., and breaches of fiduciary duty under Minnesota law. PACA is a federal statute governing sales of perishable agricultural goods. CHR acted as the Growers' sales agent in "delivered-sale transactions," in which CHR arranged both the sale of produce and freight, collecting commissions.

In a prior order (ECF No. 247), the court granted CHR's motion for summary judgment on the PACA claims but denied it on the fiduciary-duty claims. In that same order, however, the court went further and stated affirmatively that (1) CHR owed fiduciary duties to Growers as their agent, and (2) CHR "clearly breached" those duties. The court also stated that the only remaining issue was what portion of CHR's commissions should be forfeited.

The Dispute Over the Prior Order's Scope

After the prior order issued, the parties disagreed about what it resolved. Growers argued the order had conclusively determined both the existence and breach of fiduciary duty, leaving only damages (in the form of commission forfeiture) for trial. CHR argued the order merely denied CHR's motion for summary judgment without affirmatively resolving either the duty or breach issues in Growers' favor. CHR also argued, alternatively, that even if the court did rule in Growers' favor on those issues, doing so without Growers having filed their own motion for summary judgment violated Federal Rule of Civil Procedure 56(f), which requires a court to give the party against whom judgment will be entered "notice and a reasonable time to respond" before doing so.

Analysis: Fiduciary Duty (Existence)

The court confirmed that its prior order did, as a matter of law, establish that CHR was the Growers' agent and owed them fiduciary duties — specifically including the duty to disclose any material matter bearing on undivided loyalty to the principal. The court applied the factors from Jurek v. Thompson, 241 N.W.2d 788 (Minn. 1976), a Minnesota Supreme Court case used to determine when an agency relationship exists.

On the Rule 56(f) notice argument regarding the duty question, the court rejected CHR's objection. Under Eighth Circuit precedent, when a moving party seeks summary judgment on an issue and the parties fully litigate it, the court may grant summary judgment to the nonmoving party (i.e., the party that did not file the motion) without separate notice, because the moving party already had a full opportunity to develop the record. See Barkley, Inc. v. Gabriel Bros., Inc., 829 F.3d 1030, 1041 (8th Cir. 2016); Johnson v. Bismarck Pub. Sch. Dist., 949 F.2d 1000, 1004–05 (8th Cir. 1991). The court noted that CHR had moved for summary judgment on the duty question, both parties briefed the Jurek factors, Growers explicitly argued CHR was a fiduciary as a matter of law on undisputed facts, and CHR had known since at least March 2024 that Growers would not offer individualized proof on the duty question for each Grower.

To the extent CHR's briefing argued the court's prior order was wrong on the merits, the court noted CHR was seeking reconsideration without following the local rules for reconsideration motions. See D. Minn. LR 7.1(j).

Analysis: Breach of Fiduciary Duty

The court reached a different conclusion on breach. The court acknowledged it had made a procedural error: CHR did not move for summary judgment on the breach issue, so the Rule 56(f) notice requirement was not satisfied. CHR had no reason to anticipate the court might rule against it on breach as a matter of law. The court also noted that CHR contends it has evidence showing the Growers knew CHR profited from freight — evidence that, if credited at trial, could result in a verdict in CHR's favor on breach. The court cited its own footnote from the prior order noting that CHR could have avoided any breach by disclosing its freight profits, implying that whether such disclosure occurred or was effectively made is a genuine factual issue.

Analysis: Causation

The court preemptively resolved what it described as an apparently developing dispute: CHR had suggested causation remained a live issue at trial. The court rejected this, reaffirming its prior ruling that under Minnesota law, Growers do not need to show they were actually harmed by a breach of fiduciary duty in order to recover the commissions paid to CHR. Because no harm need be shown, causation of harm is not an issue for trial.

Disposition

The court granted CHR's motion for clarification in part and denied it in part:

The net effect is that the trial will address: (a) whether CHR breached its fiduciary duties, and (b) if so, what portion of CHR's commissions should be forfeited under the applicable equitable-forfeiture framework (derived from the "Perl II" factors referenced in the prior order). The duty issue and the causation-of-harm issue are resolved in Growers' favor as a matter of law.