SIOUX FALLS, S.D. (AP) - Cattle ranchers who won a $9.25 million federal jury verdict against four large meat packers failed to show that the companies intentionally manipulated or controlled prices, a federal appeals court ruled Tuesday.
The three-judge panel of the 8th U.S. Circuit Court of Appeals reversed the district court's 2006 ruling in favor of the ranchers, who had said in their lawsuit that large meat packing companies underpaid producers for live cattle. The ranchers had claimed that the packers knew or should have known of the USDA's error.
The appeals court ruled that the ranchers produced no evidence that the packers intentionally violated the Packers and Stockyards Act by manipulating or controlling, or attempting to manipulate or control, cattle prices. To prove a violation, a plaintiff must show that a packer intentionally committed unlawful conduct, the panel said in its ruling.
"Therefore, the district court erred when it instructed the jury that a showing of intent was not required and reversal of the district court is necessary," the judges said.
The class action lawsuit, filed by Herman Schumacher of Herreid, Michael Callicrate of Kansas and Roger Koch of Nebraska, sought almost $43 million from Tyson Fresh Meats Inc., Cargill Meat Solutions Corp. doing business as Excel Corp., Swift Beef Co. and National Beef Packing Co.
From April 2, 2001, to May 11, 2001, the U.S. Department of Agriculture misreported the boxed beef cutout prices for choice and select cuts of meat.
The lawsuit alleged the meatpackers knowingly used that information to pay less to cattle producers than they would have if the cutouts were correct. The packers denied knowing about the faulty reports before the USDA acknowledged them.
The erroneous reports were the result of a flawed computer program that took into account a lesser quality of beef when calculating cutouts for choice and select cuts. As a result, the choice and select cutouts were too low.
Lawyers for the meatpackers said their clients did not know the USDA cutouts were wrong, so they could not have benefited from the information.
Schumacher said that despite the setback, he will press on.
"Obviously, I'm very disappointed in the (judicial) system, as this is the second time I've been involved in a unanimous decision by a jury finding the packers guilty of manipulating a market, and somehow, the appellate courts don't see it that way, so they've reversed the jury decisions," Schumacher said in a release provided by the Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America - or R-CALF USA.
"That doesn't mean - by any means - that I am going to quit," said Schumacher. "I am not done fighting this battle. When I first started this, I knew it was going to be a long undertaking, and that it wouldn't happen in a year or two, or even 10."