Blanchard et al v. Huynh et al

AMENDED COMPLAINT Third Amended Complaint, Application for Preliminary and Permanent Injunction against All Defendants, filed by Mersini Blanchard, Frank Blanchard, Malakoff Properties, LLC.

Eastern District of Texas, txed-6:2018-cv-00265

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4 PageID #: 300 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF TEXAS TYLER DIVISION FRANK BLANCHARD, et al. Plaintiffs, Civil Action No. 6:18-cv-00265-RWS v. JURY TRIAL DEMANDED STEVE HUYNH, et al. Defendants. PLAINTIFFS' THIRD AMENDED COMPLAINT, APPLICATION FOR PRELIMINARY AND PERMANENT INJUNCTION Plaintiffs Frank Blanchard, Mersini Blanchard, and Malakoff Properties, LLC file this Third Amended Complaint, Application for Temporary, and Permanent Injunction, against Defendants Steve Huynh, individually, Yvonne Huynh, individually, Huynh Poultry Farm, LLC d/b/a Steve Thi Huynh Poultry d/b/a Huynh Poultry, T & N Poultry Farm, LLC, Thinh Bao Nguyen Poultry Farm, Thinh Bao Nguyen, individually, Timmy Huynh Poultry Farm, Timmy Huynh, individually, and Sanderson Farms, Inc., (collectively, "Defendants"), and state: PARTIES 1. Plaintiff Frank Blanchard is an individual citizen of Dallas County, Texas. 2. Plaintiff Mersini Blanchard is an individual citizen of Henderson County, Texas. 3. Plaintiff Malakoff Properties, LLC is a limited liability company formed and existing under the laws of the State of Texas located in Henderson County, Texas. 4. Defendant Steve Huynh is an individual citizen of Henderson County, Texas and has previously filed an answer in this case. THIRD AMENDED COMPLAINT, APPLICATION FOR PRELIMINARY AND PERMANENT INJUNCTION – Page 1 4 PageID #: 301 5. Defendant Yvonne Huynh is an individual citizen of Henderson County, Texas and has previously filed an answer in this case. 6. Defendant Huynh Poultry Farm, LLC is a Texas limited liability company conducting business in Henderson County, Texas with its principle office in Tennessee Colony, Texas and has previously filed an answer in this case. 7. Defendant T & N Poultry Farm, LLC is a Texas limited liability company conducting business in Henderson County, Texas with its principle office in Tennessee Colony, Texas and has previously filed an answer in this case. 8. Defendant Thinh Bao Nguyen Poultry Farm conducts business in Malakoff, Henderson County, Texas and has previously filed an answer in this case. 9. Defendant Thinh Bao Nguyen is an individual citizen of Texas and has previously filed an answer in this case. 10. Defendant Timmy Huynh Poultry Farm conducts business in Malakoff, Henderson County, Texas and has previously filed an answer in this case. 11. Defendant Timmy Huynh is an individual citizen of in California and has previously filed an answer in this case. 12. Sanderson Farms, Inc. is a corporation with its principle office in Laurel, Mississippi. Sanderson Farm, Inc. conducts business in Texas and has previously filed an answer in this case. JURISDICTION AND VENUE 13. The United States District Court for the Eastern District of Texas, Tyler Division, lacks subject matter jurisdiction to adjudicate this matter. The 392nd (state) Judicial District Court THIRD AMENDED COMPLAINT, APPLICATION FOR PRELIMINARY AND PERMANENT INJUNCTION – Page 2 4 PageID #: 302 of Henderson County, Texas has exclusive jurisdiction over this case because there is neither a federal question nor diversity of citizenship. 14. The 392nd District Court of Henderson County, Texas has subject matter jurisdiction over this cause because the relief sought is within the jurisdictional limits of that court and because the injunctive relief sought is germane to property located in Henderson County, Texas. 15. Under the parallel state court rules, venue is proper in Henderson County state court pursuant to Texas Civil Practice and Remedies Code §15.002 because all or a substantial part of the events giving rise to these claims occurred in Henderson County. Plaintiffs agree, however, that this case has been removed to the proper federal district court (germane to Henderson County state court), albeit the removal is improper because this Court lacks subject matter jurisdiction. FACTS GIVING RISE TO ALL CLAIMS 16. Henderson County, Texas is a coveted area of the state known for its mature hardwood trees, rural landscapes, and scattered lakes. This is precisely the reason why Plaintiffs purchased a ranch at 8081 FM 3441 in Malakoff, Texas. In addition, the area's beauty also makes ranch land in this area a worthy long-term real estate investment—both in terms of peace and quiet and in hard dollars. However, to put it mildly, Plaintiffs' countryside escape and their rights to peace and quiet has been severely compromised by neighboring poultry farms located at 9733 FM 3441 Malakoff, Texas 75148 that are owned, operated, and/or controlled by Defendants. Plaintiffs were there first; indeed, Plaintiffs did not "come to the nuisance". Rather, the "nuisance came to them" and without any warning whatsoever. 17. Distilled to its essence, Sanderson Farms, Inc.'s ("Sanderson") has a fraudulent business model, which is a scam designed to artificially inflate the assets on its balance sheet by THIRD AMENDED COMPLAINT, APPLICATION FOR PRELIMINARY AND PERMANENT INJUNCTION – Page 3 4 PageID #: 303 engaging in improper "off-balance sheet financing" at the expense of the community health, safety, and welfare. The business model is as follows: Sanderson seeks out minorities who have no experience in the chicken farm business to become "growers." Albeit this may seem like a laudatory purpose, but the reason for it is to wrongfully exploit various Texas agencies and to keep the costs of capitalization off of Sanderson's balance sheet and income statement to make its assets and profits look far better than they actually are. Indeed, Sanderson does not own these chicken farms—it does not own the barns, the fixtures, the core equipment, and it does not provide the employees to run these chicken farms. Therefore, the cost of capitalization of these farms never touches Sanderson's financial statements. 18. It is important to underscore that Sanderson is a 3.3-billion-dollar Fortune 500 company with over 15,000 employees; yet, with respect to its poultry farms that grow over 400,000 of its chickens at any one time—it owns NOTHING. It does not own the land, it does not own the dirt, it does not own the barns, it does not pay for any of the construction costs, it is not a signatory on any of the loans, and all of the capitalization of the assets are NOT on Sanderson's balance sheet—all of those costs are absorbed by the growers. 19. In the present case, Sanderson partnered up with the Huynhs and their cousins, nephews, children, etc. and the Nguyens (collectively, "growers") to engage in a scam. Steve Huynh is a wealthy business man; in fact, he is believed to have a net worth in excess of five (5) million dollars. Steve Huynh will soon have not one, but two lake houses, which are vacation homes on Cedar Creek lake with jet skis and other recreational watercraft. Steve does not need a helping hand. Sanderson had the growers apply for subsidies by putting the property and the business in Timmy Huynh's name. Timmy is Steve's and Yvonne's son. Timmy just recently graduated from the University of California-Davis with multiple bachelor degrees that have THIRD AMENDED COMPLAINT, APPLICATION FOR PRELIMINARY AND PERMANENT INJUNCTION – Page 4 4 PageID #: 304 nothing to do with farming or agricultural science; he does not live in the state of Texas; he has never owned and been in charge of operating a true chicken farm; he lives with his grandmother in the state of California; and he chooses to work at a motorcycle shop in that state. Needless to say, Timmy is not growing chickens in Henderson County, albeit it has been represented to both the Texas Commission on Environmental Quality (TCEQ) and the United States Department of Agriculture (USDA) that this young, recent college graduate who works at a motorcycle shop in California is owning and operating a chicken farm next door to Plaintiffs in Henderson County. 20. It should also be noted that bogus leases were created among family members to create the impression that it was not Steve Huynh, who does not qualify for subsidies, running the property. Indeed, Timmy has never paid a dime in rent to run these chicken barns to Steve. Yet, Sanderson ratified these lease agreements, when it contracted to have Timmy as one of the growers on the property at issue. Again, Timmy does not even live in the state of Texas. 21. To make matters worse, Defendants knew, long before they even broke ground on the chicken farm property, that the poultry farms would be a nuisance. In their applications with the TCEQ, which is a state agency (not federal), they absolutely knew from the way they answered the questions on those forms that the properties at issue would create a "persistent nuisance odor." That is the case because Defendants not only knew they would have 225,000 chickens or more on the property (which was the threshold under the TCEQ applications for creating a nuisance odor), but Defendants would double down by creating two farms on the same property, resulting in over 400,000 chickens on the property at any one time. 22. Shortly after Defendants began operating their poultry farms, a rancid pungent odor originating from Defendants' property encroached upon Plaintiffs' property. This smell has THIRD AMENDED COMPLAINT, APPLICATION FOR PRELIMINARY AND PERMANENT INJUNCTION – Page 5 4 PageID #: 305 polluted the air quality of Plaintiffs' property and has made it unenjoyable for Plaintiffs to sit on their porch, their children and grandchildren to play in the yard, open windows of the house to enjoy fresh air, or even to plan family gatherings at their property due to the repugnant odor. It has ruined the hunting and companion deer population on Plaintiffs' property. This invasion of Plaintiffs' property rights is ongoing and is causing irreparable harm. There are literally hundreds of thousands of pounds of chicken manure being created at the property, which is allowed to literally sit there for months at a time, resulting in the byproduct creation of ammonia and hydrogen sulfide, which stinks; Defendants are composting thousands of pounds of dead chickens with chicken manure, which stinks; and their poultry farm is a downright disaster. 23. The TCEQ has received numerous complaints regarding the putrid odors emanating from Defendants' farms, and Defendants' Steve Huynh, Yvonne Huynh, Huynh Poultry Farm, LLC, Thinh Bao Nguyen, and T & N Poultry Farm, LLC have received five (5) collective Notices of Violation from the TCEQ directly relating to odor emissions. To this end, the TCEQ's Notices of Violation against the poultry farms which, under TCEQ's FIDO standards, proves beyond any doubt that the poultry farms are a persistent and constant nuisance. Again, the TCEQ is a Texas state agency. 24. Defendants are also the cause of a loud "helicopter-like" noise that emits from Defendants' property on a 24 hour-a-day basis at various times. The noise pollution makes it unenjoyable for Plaintiffs to spend time outdoors on their property and interferes with their normal use and enjoyment of the property. The smell of the manure is a downright disaster. To summarize the awful smell: there are sixteen (16) barns on the property at issue; at any given time, there are approximately 27,800 chickens per barn. Thus, there are nearly 450,000 chickens on the property at any given time. There is approximately one (1) square foot in these barns per chicken. THIRD AMENDED COMPLAINT, APPLICATION FOR PRELIMINARY AND PERMANENT INJUNCTION – Page 6 4 PageID #: 306 Therefore, these chickens are literally defecating on themselves and that manure sits there for months at a time. Chickens are delivered to the property four (4) to five (5) times per year and, basically, in sixty (60) day cycles. Chicken manure sits there idly on the ground next door to Plaintiffs' property(ies) for sixty (60) plus days at a time; in fact, if you believe Steve Huynh's prior admissions—that manure sat there stinking up the entire development for a year—give