This case involves that Packers & Stockyards Act of 1921 (PSA) which was enacted "to assure fair competition and fair trade practices, to safeguard farmers and ranchers ... to protect consumers ... and to protect members of the livestock, meat, and poultry industries from unfair, deceptive, unjustly discriminatory and monopolistic trade practices." For more information on the Packers & Stockyards Act, click here to visit the National Agricultural Law Center's Reading Room on the subject.
The original jury award was $21.4 million, but the district court lowered the award to $14.4 million. O.K. Industries filed its appeal in August of 2008.
On appeal, O.K. argued that the PSA requires growers to prove unfair practices with respect to actual, live birds that have already hatched." "In effect, the integrator argued that it wasn't engaging in unfair practices if it was breaking eggs before allowing them to hatch to control flocks." O.K. Foods also argued that the growers were unable to prove that "consumers were injured or that there was sufficient evidence to prove liability against the company."
The Tenth Circuit, however, ruled that O.K.'s "practices of controlling flocks, reducing chicks and demanding housing upgrades all lead to practices that reduced the prices paid to growers for their poultry."
The court stated, "As we have previously recognized, price manipulation in the form of arbitrarily reducing production may violate the PSA as an unfair practice."
The full-text of the Tenth Circuit opinion is available, here
To read the DTN Ag Policy Blog story, click here.
Posted: 10/19/2010
