OMAHA, NEBRASKA - An order certifying a national "class-action" of cattle producers against IBP (Iowa Beef Processors) was issued April 28 in the Pickett vs IBP lawsuit by U.S. District Court Senior Judge, Lyle B. Strom.
The lawsuit was filed in July, 1996, by 10 cattlemen plaintiffs as representatives of the "class," and it charges that IBP violated the Packers and Stockyards Act (P&S Act), said Randy Beard, plaintiff's lead attorney.
"These charges cite and demonstrate how IBP has manipulated the cattle market through its use of 'captive supplies' and other misconduct," he said. "Such illegal practices have lowered the prices packers have had to pay for cattle, causing losses to cattle producers.
"The entire cattle industry has been in an economic crisis ever since IBP and the other big packers schemed to fatten their profits by denying producers a fair price for their cattle," said Staton Weldon, one of the original plaintiffs from Cuero, Texas.
"Our lawsuit contends that the method IBP uses is to set an unfairly low price it will pay for cattle, and when cattlemen reject that price because they will suffer a loss, IBP slaughters, or threatens to slaughter, cattle from its 'captive supply,'" Weldon explained.
"This illegal strategy," he says, "leaves cattlemen without a buyer for their cattle. And because finished cattle must be sold quickly while at optimum weight, cattlemen are forced to accept that low bid, at a loss to themselves. This abusive market power profits IBP in lowering prices paid to cattlemen while consumers continue to pay record high prices for beef."
Plaintiffs also allege, according to attorney Beard, that by contracting "captive supplies" with certain preferred feedlots, IBP reduces its need to participate in the cash market.
As a result, he points out, these meatpacker agreements to take ownership of cattle weeks in advance violate the anti-competitive provisions of the P&S Act because they are entered into with the intent of, or having the effect of, reducing the cash market price.
Contrary to IBP's contention that low prices are the result of supply and demand, plaintiffs point out that IBP's profits have soard to record levels at a time when cattle producers are going bankrupt. They say that if IBP's defense were true, there would be no reason for them to pursue all these anti-competitive practices, and they would not resist eliminating them.
The lawsuit asks that the defendant IBP cease and desist from any further illegal activities in manipulating the price of beef cattle in violation of the P&S Act, and for compensatory and punitive damages, fees and expenses, and any other relief that the court deems appropriate.
Plaintiffs estimate that actual damages due cattlemen could approach multi-billions of dollars.
The "class action" decision market years of legal struggles by the plaintiffs to overcome all the roadblocks defendant IBP put in their way.
Grass-roots cattlemen's organizations, individual cattlement, national farmer's groups, Texas Farmers Union, and a host of others concerned about the plight of the beef industry, submitted amicus briefs to the court supporting the plaintiffs against IBP, and uring "class-action" status, Weldon said. Even Canadian cattlemen, whose market is also dominated by IBP, supported us, he noted.
"At one point, the court asked Agriculture Secretary Dan Glickman to write an opinion as to whether we could pursue a private lawsuit under the P&S Act," Weldon said.
"In an extensively researched brief, Secretary Glickman gave us the green light to press our charges against IBP, he said that the U.S. district court was the only forum to pursue this claim, and allowed the court to fully consider our case and subsequent 'class action' status."
On behalf of the plaintiffs, Weldon and attorney Beard expressed the hope that pursuance of this action will result in a better, more competitive cattle and beef industry with a fair share to producers, and a fair shake for consumers.
The 10 original plaintiffs are: Stayton Weldon, Lovel Blain, Mike Callicrate, Henry Lee Pickett, Sam Britt, Jim Bower, Paul Horton, Pat Goggins, Johnny Smith and David Smith.
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