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federal Judge Charles Kornmann, required the Aberdeen-based

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The unanimous April 12 South Dakota jury decision that again found giant meatpackers in violation of the Packers and Stockyard Act of 1921 is a double victory for cattlemen and agricultural markets, says Keith Mudd, president of the Organization for Competitive Markets.



First, notes Mudd, "It proves that when cattlemen get market manipulation cases in front of juries of their peers, they win. They won the Pickett case two years ago and now they won again in South Dakota."



Also, according to Mudd, both federal court wins and the January 2006 disclosure that USDA's Packers and Stockyards Administration had failed to police meatpacker pricing activity and cattle market competition since 2000 are clear calls for Congress to revisit the P&S Act and reexamine the need for a Competition Title in the 2007 Farm Bill.



In the South Dakota case, three cattlemen--Herman Schumacher, Michael Callicrate and Roger Koch--alleged the nation's four largest meatpackers, Tyson, Excel, Swift and National, took advantage of errors in USDA's then-new mandatory price reporting system to underpay cattlemen for their cattle from April 2, 2001 to May 11, 2001. Plaintiffs' witness Ted Schroeder, a Kansas State University ag economist, pegged the underpayments at $42.8 million.



Attorneys for the meatpackers claimed their clients were unaware of USDA's faulty price reporting formula and dealt fairly with cattlemen during the period. The eight-person jury unanimously disagreed, finding the packers at fault and awarding the cattlemen plaintiffs $9.25 million in class damages.



The South Dakota trial, like the Pickett trial, pivoted on violations of the 1921 P&S Act. Unlike Pickett, however, federal Judge Charles Kornmann, required the Aberdeen-based jury to view the evidence under P&S guidelines rather than more packer friendly antitrust standards.


In Pickett, federal Judge Lyle Strom charged the jury differently, saying the packers could manipulate prices if they had a legitimate business reason. Strom said the case was anchored in federal antitrust law, not the P&S Act. The Pickett jury, however, found for the cattleman on P & S grounds, rejected any Tyson business justification, and awarded class action plaintiffs $1.3 billion in damages. Strom threw out the jury award, and the decision was upheld by the 11th Circuit Court of Appeals. On March 27, 2006, The U.S. Supreme Court refused to hear the case.



"Judge Kornmann's view of the P&S Act comes from a court under the 8th Circuit Court of Appeals, is fundamentally correct, but different from the 11th Circuit Pickett ruling. We now have at least two very different interpretations of the same law which should be clarified by Congress." commented Mudd.



Senator Tom Harkin of Iowa has introduced a bill in the Senate to reverse the wayward decision of the 11th Circuit. Courts have often undermined antitrust laws, and the P&S Act, defying the language written by Congress. OCM will continue working to preserve competition for independent producers.



P.O. Box 6486 - Lincoln, NE 68506 - www.competitivemarkets.com OCM is a non-profit, multidisciplinary organization working for fair, open and competitive markets in agriculture and realistic trade policies.
 
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