Pickett vs Tyson
Commentary

On August 16, 2005, Judge Carnes, Judge Cox, and Judge Mills, sitting for the United States Court of Appeals for the Eleventh Circuit, decided they had a better understanding of the Pickett v Tyson cattle price manipulation case than the twelve (12) person jury which returned a verdict for the Plaintiffs last year. The jury heard five weeks of testimony in January and February 2004. The Judges looked at a fraction of the testimony, a small portion of the exhibits and listened to less than one hour of oral argument before deciding they would decide the case differently than the Jury.

In February 2004, the Jury was asked these questions:

1. Is there a nationwide market for fed cattle?
2. Did the Defendant's use of captive supply have an anti-competitive effect on the cash market for fed cattle?
3. Did the Defendant lack legitimate business reason or competitive justification for using captive supply?
4. Did the Defendant's use of captive supply proximately cause the cash-market price to be lower than it otherwise would have been?
5. Did the Defendant's use of captive supply injure each and every member of the Plaintiff's class?
6. What amount, if any, do you find that Defendant's use of captive supply damaged the cash-market price of fed cattle sold to Tyson during the period from February 1, 1994 through October 31, 2002?

The Jury answered questions one (1) through five (5) with a, "yes". The Jury answered question six (6) with the number "$1,281,690,000."

During the trial, Plaintiff's witnesses and experts repeatedly testified captive supply reduced their marketing choices, forced them to take lower prices, and mathematically reduced cattle prices across the country. Plaintiff's witnesses included cattle producers from Alabama, Oklahoma, Texas, New Mexico, Kansas, Montana, and Nebraska.

Plaintiff's experts, Dr. Robert Taylor, Auburn University, analyzed hundreds of thousands of Tyson cattle-buying transactions. He ran over 140 statistical tests on those numbers. He found as captive supply increases, price decreases. In fact, Tyson's captive supply reduced price by five percent overall from 1994 to 2002. This means Tyson received one out of twenty cattle free. His analysis was supported by Dr. Katherine Durham, an agricultural economist at Oregon State University. The jury agreed with his testimony.

This Eleventh Circuit judges refused to credit any plaintiff's witnesses, despite the jury doing so. Indeed, they even refused to use the word "captive supply," dismissing it as a “pejorative” or derogatory term. They preferred to call captive supplies marketing contracts instead, in support of their decision. The Jury certainly believed captive supply was the proper term, but the Appellate Court had this last say.

The language of the Packers and Stockyard Act says price manipulation is unlawful. But the Appellate Court said, "We are convinced that the purpose behind [the Packers and Stockyards Act] was not to upset the traditional principles of freedom of contract." The judges also said the Act was designed to promote "efficiency." Neither the words “freedom of contract” nor “efficiency” appear in the statute.

Tyson claimed it needed captive supply to procure a sufficient number of cattle to keep their plants full. Dr. Robert Taylor analyzed this claim and proved Tyson's plants were no more full with high number of captive supply cattle than without. The jury, employing common sense, determined contracts cannot create new cattle out of thin air. Either there are sufficient cattle to slaughter that week or there are not. The only question is price.

The sum of the opinion is, the Jury rejected each and every one of Tyson's business justifications as false. The Eleventh Circuit accepted each and every one of Tyson's business justifications as true.

The best definition of activist judges is those that change the Constitution and change the laws of Congress. While a tribunal consisting of U.S. Chamber of Commerce members, representing the nation's largest businesses, would have been expected to have this opinion, judges are supposed to follow the law. They should not rewrite laws nor strike them down.

Judges are elected for life; we cannot vote them out of office.

The solution now is, unfortunately. legislative. We must focus on pro-competition and pro-producer laws. The Organization for Competitive Markets is working on a Competition Title for the next farm bill. This Competition Title will strengthen the Packer and Stockyards Act, strengthen the rights of poultry producers, and serve as a model for state legislation. America's farmers succeeded in pushing through the original Anti-trust Laws, and Packers and Stockyards Act, passed despite the incredible power of the Robber Barons of the past century.

We can do so now, and we are not allowed to give up. Our Founding Fathers sacrificed for American democracy with their lives, their families, their homes and their farms. It is for their honor and our future we must sacrifice and work for an America we can be proud of.MS