CATTLE PRICE-FIXING TRIAL BEGINS IN MONTGOMERY
MONTGOMERY, Ala. -- A federal trial that could have far-reaching effects on the U.S. beef industry began Tuesday in Montgomery.
The class-action lawsuit, which originally was filed in Montgomery in July 1996 by 10 cattle producers in seven states, alleges IBP Inc., violated the Packers and Stockyards Act of 1921. The plaintiffs have charged that IBP, which merged with Tyson Foods in 2001, paid higher prices to producers who entered into exclusive agreements with the company and conspired to fix prices paid on the open market.
The plaintiffs claim as many as 30,000 cattlemen who sold cattle to IBP or Tyson Fresh Meats Inc. from February 1994 to October 2002 could qualify for damages under the class-action suit. Although many of the class members are Midwestern cattlemen, the suit was filed in Montgomery because the lead plaintiff is Henry Lee "Leroy" Pickett of Bullock County.
Twelve jurors from across central Alabama were chosen Monday to hear the case. Last week, U.S. Senior District Judge Lyle E. Strom decided that the plaintiffs cannot seek punitive damages in the case. Tyson officials said the ruling could substantially limit the amount of any potential verdict, but attorneys for the plaintiffs said punitive damages were never the cattlemen's main goal.
Attorney Joe Whatley of Birmingham told The Associated Press, "Changing the practices on an ongoing basis so that our clients can stay in business is more important than a one-time pot of money."
Attorneys for Tyson (IBP) have filed a motion to allow the presentation of data showing cattle prices reached an all-time high in October 2003. The defense attorneys said such evidence is a "linchpin" in the overall IBP case because it shows the market factors such as increased demand for red meat and reduced beef imports due to BSE--not price fixing--contributed to higher prices.
Whatley said the parties should stick to an earlier agreement limiting data to the end of the suit period, October 2002.
While similar cases are pending with other giant meat-packing companies, this is the first to go to trial.
Updates about the trial will be posted, when available, to the Alfa Farmers' website at : www.alfafarmers.org.