BY THE MORNING NEWS

Siloam Springs-based Simmons Foods Inc. lost a federal court appeal to vacate a $510,000 settlement won by its former contract chicken growers.

On Thursday, the 8th Circuit U.S. Court of Appeals affirmed the lower court's decision and denied the company's appeal.

In 2003, a group of seven growers filed suit against Simmons Foods for damages suffered under the Packers and Stockyards Act. The group claimed long-term contracts were promised by the company as an incentive to attract new growers.

The Packers and Stockyards Act became law in 1921 with a purpose of regulating interstate and foreign commerce in livestock, dairy products, poultry and eggs. The law prohibits packers from engaging in unfair and deceptive practices such as manipulating prices, creating a monopoly or conspiring to aid in unlawful acts.

Jim Lingle, legal counsel for the growers, said the contracts were canceled without cause prompting the initial lawsuit in October 2003.

A district court ordered the two sides into arbitration which unanimously awarded the growers $510,000 in damages.

The growers asked the district court to confirm the award, while Simmons moved to vacate it on the grounds of bias. The alleged bias was with one of the three arbitrators, J. Dudley Butler, who had previously represented the growers in litigation against poultry companies and testified on behalf of growers before the U.S. Senate, the filing said.

The district court confirmed and entered judgment for the growers on the award.

Simmons appealed the decision in federal court filed in the Western District of Arkansas on June 11.

Following Thursday's decision, Lingle said the company has 14 days to ask for a final appeal before the entire 8th Circuit and a Supreme Court appeal if so desired.

Simmons Foods chose not comment on the pending legal issue.