OCM Applauds Fifth Circuit Packers and Stockyards Act Decision


Organization for Competitive Markets
P.O. Box 6486
Lincoln, NE 68506

For Immediate Release: July 23, 2008

Contacts: Michael Stumo, 413-854-2580
Fred Stokes, 662-476-5568 or 601-527-2459

Lincoln, NE – The Organization for Competitive Markets (OCM) hailed a decision released Monday by the U.S. Court of Appeals for the Fifth Circuit (Wheeler v. Pilgrim’s Pride) holding that a plaintiff need not prove an adverse effect on competition to prevail in a suit alleging a violation of the Packers and Stockyards Act. There is an unwise split of authority on this issue among the federal Circuit Courts. OCM appreciates this well considered ruling that makes it easier for producers to prevail in a suit against meat packers.

“Pro packer courts have repeatedly overturned jury verdicts in favor of the major packers in Packers and Stockyards Act (P&S Act) litigation,” said Keith Mudd, OCM President. “The courts have ignored the actual words of the P&S Act which prohibits unfair practices. Instead, the courts have looked far afield to find new hurdles preventing justice. For example, some courts have required producers to prove not only that a packer act or practice was unfair or deceptive, but also that the practice caused an ‘adverse effect on competition’ in the entire industry.”

“Proving ‘harm to competition’ is prohibitively expensive for producers in most cases because economic experts must be hired to create expensive national industry models, produce reports, and show how the whole industry was harmed,” said Michael Stumo, OCM General Counsel. “The exercise is irrelevant to whether a particular producer was harmed by a packer. The Fifth Circuit read the statute, saw no ‘harm to competition’ requirement in the statutory language, and rationally held that the poultry producer plaintiffs did not need to address something not in the P&S Act.”

“OCM has, for 10 years, promoted the proper interpretation of the P&S Act in livestock and poultry litigation. We congratulate the law firm of Patton & Tidwell for this decision,” continued Stumo. “Continuous work and vigilance is necessary in the courts, in Congress, and at the USDA. OCM believes that fair, open and competitive markets are in the best interest of the whole industry.”

OCM is a national non profit organization working for fair open and competitive markets domestically and internationally.