Jury awards $1.3 billion to cattlemen in Pickett case
Tyson Fresh Meats did manipulate prices, jury says
In a class action victory the Organization for Competitive Markets (OCM) is hailing as the greatest day for cattlemen since the Packers and Stockyards Act was passed, an Alabama jury has awarded nearly $1.3 billion to producers who say IBP used captive cattle supplies to manipulate prices downward. IBP now belongs to Tyson Fresh Meats, Inc. The group says the award is at the low end of estimated damages to producers.
"This is the greatest day for cattlemen since the passage of the Packers & Stockyards Act in 1921 and the break up of the big five packers one year earlier," says Fred Stokes, president of OCM.
"Finally, America's cattlemen were able to present their case before an unbiased jury to determine once and for all whether captive supplies manipulate prices. The jury found that Tyson did manipulate prices unfairly with captive supply cattle." Stokes says.
"This is an historic day that will be remembered for generations as the beginning of a turnaround for competition in the cattle industry."
Steve Cady, executive director of OCM, today told Agriculture Online he expects the case to be appealed.
"We may get the penalty and have the touchdown called back. However, it is a score at this time and we'll just have to see what happens," he said.
Tyson's business justifications called 'contrived'
"The plaintiffs experts showed that Tyson depressed prices by an average of 5.1% over the 8 year class period," said Michael Stumo, OCM general counsel, who assisted plaintiff's counsel throughout the trial. "This means that Tyson received one out of every 20 cattle free due to their manipulation of inventories that allowed them to depress prices."
"Tyson argued that they needed to use captive cattle to procure quality cattle, keep their plants full, and reduce transaction costs," Stumo said. "Tyson's experts, including Professor Ted Schroeder of Kansas State, said that beef quality would go down without captive supply. The jury found that those alleged business justifications were contrived and not true."
The case was filed in 1996 against IBP. The named plaintiffs are Lee Pickett (AL), Mike Callicrate (KS), Chris Abbot (NE), Robert Rothwell (NE), Johnny Smith (SD), and Pat Goggins (MT). They represent a class of approximately 30,000 cattlemen who sold to IBP exclusively on the cash market from 1994 to 2002. IBP was purchased by Tyson in 2002. The case is now entitled Pickett v. Tyson Fresh Meats, Inc.
OCM today conveyed thanks to David Domina of Domina Law in Omaha, Nebraska, and Joe Whatley of Whatley Drake in Birmingham, Alabama, for their case preparation and their dedication to the U.S. cattle industry.