On Aug. 16, the 11th U.S. Circuit Court of Appeals upheld a lower court’s decision to overturn a decision by a Montgomery, Ala., jury that found Tyson Fresh Meats (formerly Iowa Beef Processors, or IBP) illegally used captive supplies to manipulate cattle markets and drive down prices. In February 2004, the Alabama jury found Tyson liable for $1.28 billion in damages for eight years of cattle price manipulation in the historic cattle price-fixing suit known as the Pickett Case. The suit was brought under the Packers and Stockyards Act.
“The court has given the big four meat packers eminent economic domain over the cattle industry,” said Randy Stevenson, co-chair of R-CALF USA’s Marketing Committee. “The statutory language in the Packers and Stockyards Act prohibits price manipulation. This law does not state packers can justify price manipulation, or other unfair marketing practices, with a business justification. The 11th Circuit inserted its own language into the law, language Congress did not include when passing the Act in 1921. This decision is a blow to U.S. cattlemen, and if allowed to stand, the decision guts the Packers and Stockyards Act.”
The trial lasted over one month in January and February 2004. The cattlemen plaintiffs showed Tyson forced cattle prices lower with captive supply contracts by lessening their need to bid fair market value for cattle in the open market. Tyson argued it needed captive supply cattle to gain a consistent supply, but showed neither the dollar value of this benefit, nor that it could not buy enough cattle from the open market.
“This decision has absolutely no logic,” noted Stevenson. “The court indicated that if Tyson gained any economic benefit from the captive supplies used to pressure markets, we must overlook the producer harm inflicted, even if the market harm overwhelmingly exceeds the benefit to Tyson. This ruling is outrageous.”
Leo McDonnell, R-CALF USA President and Co-Founder, praised the Pickett plantiffs’ courage.
“This case has been ongoing for nearly a decade,” he said. “The plaintiffs in this case have never wavered from their conviction that the federal government is failing to enforce the laws of this nation that were passed by Congress to protect individual cattle producers from harmful meat packer marketing practices.
“I salute them for their courage,” said McDonnell. “It is more clear than ever that the ultimate battle lies in Congress, where laws must be passed to reinforce the mechanisms already in place to protect our markets.”
David Domina, the lead attorney to represent the cattlemen in this case, said the setback does not mean the case is over.
“We expect to ask for review by the entire 11th Circuit and the U.S. Supreme Court,” he said. “Certainly, the three-judge panel’s decision is a major disappointment, and I am especially disappointed with this ruling in view of the attentive efforts of the jury for five weeks and its five full days of deliberations.
“This case was decided by a fair-minded, intelligent, focused jury,” Domina continued. “It was upset by an appellate tribune with less regard for the principle that a jury’s decision is to remain inviolate than I had hoped the court would exhibit.”
# # #