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The Georgia Supreme Court on Monday refused to end a 12-year dispute over millions of dollars of peanut contracts, possibly setting up a new trial in Fulton State Court. Alpharetta, Ga.-based peanut sheller Golden Peanut Co. had asked the high court to rule that it should win the case as a matter of law, arguing that contract provisions relied upon by peanut grower Varner-Bass Enterprises violated federal statutes and were unenforceable. But in a unanimous decision, Justice George H. Carley wrote that holding the contracts unenforceable was a disfavored defense, one that would appear to violate the general policy of preventing people from getting other people’s property for nothing. Golden Peanut Co. v. Varner-Bass Enterprises, No. S01G1157 (Sup. Ct. Ga. April 29, 2002). The peanut decision was one of nine the high court issued Monday. In another, the justices rejected a challenge by a convicted murderer that a trial judge should not have allowed the jury to hear a damaging statement he made to police because they were interrogating him after he had requested an attorney. In a decision by Justice Hugh P. Thompson, the court ruled unanimously that because Ronnie L. Carroll had asked only “how” he could get an attorney, he had not requested an attorney clearly enough to trigger protection under the U.S. Constitution and to force police to end their interrogation. In a one-paragraph concurrence, Presiding Justice Leah Ward Sears and Chief Justice Norman S. Fletcher agreed Carroll’s case failed because he asserted error only under the U.S. Constitution, which the court held does not require police to clarify a suspect’s ambiguous request for counsel. But they urged their colleagues to adopt a rule — suggested six years ago by Fletcher — that the Georgia Constitution requires police to clarify whether a suspect wants a lawyer when he makes an ambiguous request for counsel. Carroll v. State, No. S02A0354 (Sup. Ct. Ga. April 29, 2002). WHERE WILL CASE GO? Depending on what Golden Peanut decides, the peanut case now will head to the U.S. Supreme Court, where the justices would decide whether to review the matter, or return to Fulton State Court, where Varner-Bass won a $22 million verdict in 1999. The case has been a clash of titans, pitting what was one of the country’s largest peanut growers, Varner-Bass, against one of the country’s largest peanut buyers, Golden Peanut. King & Spalding, Georgia’s richest law firm, represents Varner-Bass, while Alston & Bird, the state’s second-richest firm, represents Golden Peanut. After the trial, Alston & Bird brought in litigation and appellate boutique Bondurant, Mixson & Elmore to assist with the appeals. The dispute dates to Varner-Bass’ sale of its 1990 crop to Golden Peanut, a consortium of public and private partners that includes Archer Daniels Midland Co. The two sides had agreed on a floor price for peanuts, but a drought diminished the crop and raised market prices, resulting in a disagreement over what the final prices for peanuts slated for export should have been. At trial, Golden Peanut President Gaylord Coan testified that he was tired of fighting and sent Varner-Bass a check for $900,000 — in addition to $20 million already paid — to cover the disagreement. Varner-Bass cashed the check, kept the money and didn’t complain about the prices until 1994, when they brought suit in Fulton State Court, claiming they considered the $900,000 only a partial payment on the total value of what Golden Peanut owed them. At trial, Varner-Bass asked for $44 million, but the jury awarded half that — $22 million in compensatory damages, interest, and attorney fees for Golden Peanut’s bad faith. NEW TRIAL WON Golden Peanut appealed and last year won a new trial from the Georgia Court of Appeals. The court overturned the verdict because it said Fulton State Judge Henry M. Newkirk should have instructed the jury on “accord and satisfaction,” which dealt with Golden Peanut’s argument that its $900,000 payment was offered to satisfy all obligations and Varner-Bass’ acceptance of the money ended the dispute. Escaping the $22 million verdict was certainly good news for Golden Peanut, but it appealed to the Georgia Supreme Court to hold that the contracts were invalid under federal law and were therefore unenforceable. “The whole point of this is to avoid a trial,” said Alston & Bird’s Jay D. Bennett, representing Golden Peanut. He argued that federal law at the time required peanut contracts to be in writing and to have a final purchase price — not just a floor price with a final price to be determined later. A 1982 U.S. Supreme Court decision, Kaiser Steel v. Mullins, 455 U.S. 72, held that “illegal promises will not be enforced in cases controlled by federal law.” But the Georgia Supreme Court based its decision on a different U.S. high court decision, Kelly v. Kosuga, 358 U.S. 516 (1959), which held that courts should balance the pros and cons of enforcing a tainted contract. “The statutes and regulations upon which Golden Peanut relies relate only to the express terms that a contract to sell peanuts must contain in order to satisfy federal requirements,” wrote Carley, “and do not bar a recovery against the purchaser who enters into an agreement to buy peanuts which does not comply fully with those requirements.” BALANCING TEST Carley added that under the balancing test, “we conclude that the Court of Appeals correctly held that any deficiency in the form of the agreements is not such as to render them illegal and unenforceable against Golden Peanut.” Bennett said officers at Golden Peanut had not decided whether to ask the U.S. Supreme Court for certiorari or head back to trial, after which the company might then, if necessary, start back up the appeals ladder. “If there’s a new trial,” Bennett added, “it’ll be substantially different” than the first. A major issue at the first trial was whether the contracts had been signed before or after Varner-Bass representatives had added the term “floor price.” A second trial, said Bennett, would focus more on Golden Peanut’s argument that Varner-Bass “got everything they were entitled to under the contracts — and more.” King & Spalding’s Benjamin F. Easterlin IV said Golden Peanut “must face the fact that this case will be decided by a jury.” When that would occur is unclear, Easterlin said; it depends on Golden Peanut’s decision on seeking certiorari and the trial court’s calendar. He speculated that a retrial could start at the end of the year.

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