Organization for Competitive Markets
P.O. Box 6486
Lincoln, NE 68506
Date: April 23, 2004
FOR IMMEDIATE RELEASE
Contact: Steve Cady, 402-792-0041
OCM says Judge
Wrong to Throw out Pickett Verdict on Technicalities:
Plaintiff’s Will
Appeal
Lincoln ~ The Organization for Competitive Markets today expressed extreme disappointment in the decision, released today, of Judge Lyle E. Strom to overturn the $1.28 billion jury verdict in the Pickett v. Tyson Fresh Meats trial. The order was based on technicalities, not the finding that captive supplies harm price. The attorneys for the 30,000 cattlemen plaintiffs have said that they will appeal the ruling.
Judge Strom left intact the finding that captive supplies harmed all cash sellers of fed cattle to Tyson in the amount of nearly $1.3 billion. The Court also left intact the finding by the jury that the market for fed cattle is national. However, the Court found that there were legitimate business reasons for captive supply, specifically (1) that Tyson was guaranteed a consistent, reliable supply of cattle and (2) that Tyson needed captive supplies to meet the competition where other packers engaged in the practice.
“This ruling on technicalities does an extreme disservice to going forward with more open and competitive markets in the cattle industry that is unencumbered by abuses in market power,” said Fred Stokes, OCM president. “The Court did not dispute the fact that the practice harms cattle producers. It also did not dispute the fact that cattle quality was lower with captive supply cattle and higher with spot market cattle. We think that the jury verdict is entitled to far more respect by the judiciary.”
The Court’s finding on legitimate business expectations turned on a dispute of law. The plaintiffs argued that where the harm of captive supply outweighs any claimed benefits, the court should find the practice unlawful. The Court accepted the defendant’s argument that even if the harm was severe, if there is any benefit at all, the law was not broken.
“It is not logical that where, for example, there is $100 of harm by Tyson, proof of a one dollar benefit makes the net of $99 harm to producers go away,” continued Stokes. “Tyson was not able to quantify any benefit received by captive supply in dollar terms, they merely made assertions. Further, it is outlandish that Tyson should be allowed to use strategic price manipulation strategies just because other dominant packers are doing it.”
The Court additionally held that there was no proof that persons who sold cattle in 1999 and 2000 were harmed. This finding was based upon the plaintiff’s expert testimony showing that Tyson ramped up captive supply numbers significantly in those years, making it more difficult to calculate the specific harm. Thus, the plaintiff’s expert used another standard econometric formula to calculate the harm during those two years, which was unchallenged by Tyson. The court ignored that calculation in finding no proof of harm.
“We are unsure how the Court could find no proof of harm in 1999 and 2000 where captive supplies were going up rapidly when the court accepted that captive supplies lowered prices in all other portions of the eight year class period,” said Stokes. “It just does not make any sense and does a disservice to cattle producers wanting a fair price.”
“We are confident that the Eleventh Circuit Court of Appeals will correct these errors,” concluded Stokes.
The Organization
for Competitive Markets (OCM) is a multidisciplinary, nonprofit group of
farmers, ranchers, academics, attorneys and policy makers dedicated to
reclaiming the agricultural marketplace for independent farmers, ranchers and
rural communities. OCM helps lead the
Cattlemen’s Competitive Market Project which is a voluntary contribution
program focusing on competition in the cattle markets.