Court piles on meatpackers’ power

Killed the Packers and Stockyards Act of 1921.
Largely gutted the U.S. Department of Agriculture’s mandate to “promote fair and competitive trading practices for the overall benefit of consumers and American agriculture.”
Gave agbiz giants permission to run U.S. ag markets like wholly-owned subsidiaries.
That’s what a three-judge panel for the 11th Circuit U.S. Court of Appeals in Atlanta effectively did Aug. 16.
And it was all done in the name of “efficiency,” a word not found in either the act or the U.S. Constitution.
How’d it happen? How in the world did a lawsuit against Tyson Fresh Meats – where a jury in Feb. 2004 awarded cattlemen $1.28 billion because it found that Tyson’s use of contracted cattle actually cut cash cattle prices – end up granting giant meatpackers market power they could only dream of?
Simple, said Roger McEowen, an ag law professor at Iowa State University.
“The judges in this case created a standard that isn’t in the Packers and Stockyards Act; a standard that says ‘The (act) exists to aid efficiency so packers can compete with each other.'”
In agreement is Michael Stumo, legal counsel for the Organization for Competitive Markets, which participated in the original Alabama lawsuit – called Pickett – that handed Tyson the billion-dollar lump to its head.
“The appellate court basically changed a competition enforcement statute, the (act), into an efficiency statute.”
In doing so, the court said that if there is a “business justification” – here, efficiency – for violating the act, then no violation occurs.
This standard, adds Stumo, “is not in the Packers and Stockyards Act text, nor it is in antitrust law. But the 11th Circuit believes it should be no matter that a jury has already said it’s not and the actual law says it’s not.”
Selective judges. Indeed, the decision (www.ca11.uscourts.gov/opinions/ops/200412137.pdf) is not only remarkable for what it includes, but also what it excludes.
For example, nowhere in its 33 pages is there one reference to any of the amicus briefs submitted to the court in support of the jury’s original judgment against Tyson.
Somehow, though, the court did find space – and, more importantly, a reason – to include the trial judge’s snide and away-from-the-jury characterization of Auburn University’s Dr. C. Robert Taylor, Pickett’s expert witness who proved to the jury that Tyson’s use of captive cattle led to 5 percent lower cash cattle prices.
The remark – “I’d say, Dr. Taylor, you’re nuts.” – is not only silly, wrong and inflammatory, it’s immaterial. That’s why the jury never heard it.
Also, the Aug. 16 opinion chastises David Domina, one of plaintiff Pickett’s lead attorneys in the case, for his opening statement the court characterizes as “emotional.”
So what? The court’s view of Domina’s statement has nothing to do with its task: Determine if the case was decided fairly and correctly under the law, not whether an attorney reaches for a jury’s heartstrings or even stands on his head in the attempt.
Anarchy market. “This is a very hostile opinion,” said Peter Carstensen, a professor at the University of Wisconsin’s law school and an antitrust specialist, “that shows a profound failure on the part of the court to understand that a legal framework is absolutely essential to make markets work.”
Like McEowen and Stumo, Carstensen views the decision as a gut-splitter for the act and its overarching USDA agency, the Grain Inspection, Packers and Stockyards Administration.
“This opinion basically creates a lawless market because it says that if a meatpacker’s conduct is consistent with some business purpose, then anything goes – even serfdom.”
Who’s going to help? As such, the act is functionally dead, he said, and the “only thing that can salvage it is if someone pours a hardening agent into backbones at USDA so it stands up and writes tough rules on marketing contracts.”
But, he added, given the fact that USDA itself is largely a captive of meatpackers, “That’s not going to happen.”
Congress can make it happen, though, by resuscitating, then updating, the Packers and Stockyards Act in the 2007 Farm Bill.
Let’s start by calling it the Anti-Serfdom Act.
(Alan Guebert’s Farm and Food File is published weekly in more than 75 newspapers in North America. He can be contacted at agcomm@sbcglobal.net.)