Decision from Appeals Court Favors Packer
Producer organizations disappointed with ruling.
Compiled by staff
Published: Dec 21, 2009
The U.S. Court of Appeals for the Fifth Circuit has issued an opinion in the Wheeler v. Pilgrim's Pride case. By a 9 to 7 vote the court held that a plaintiff must demonstrate that the challenged practice has an anticompetitive effect. A divided panel of the Fifth Circuit had previously held by a 2-1 vote that a plaintiff need not demonstrate an anticompetitive effect in order to establish a claim.
The issue of whether the Packers and Stockyards Act requires a showing of anticompetitive effect is of enormous importance to the poultry and meat packing industries. If an anticompetitive effect were not required to establish a PSA claim, liability under the PSA would be virtually limitless.
At question was Pilgrim's Pride's tournament system. The growers, who were supplied by Pilgrim's Pride with chickens, feed and supplies, were paid according to the tournament system, which took into account the number and quality of each grower's chickens. One grower, Pilgrim's Pride founder and chairman, Lonnie Pilgrim, was not subject to the tournament system.
R-CALF USA voiced concern over the decision. R-CALF and 53 other producer-oriented organizations had filed an amicus brief to show support for the plaintiffs. R-CALF USA CEO Bill Bullard, says the effect of this decision is that the Packers and Stockyards Act has been rendered useless for protecting independent producers from unfair and deceptive practices of the highly concentrated packers.
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