Legal and Economic Issues with the Courts' Rulings in Pickett v. Tyson Fresh Meats, Inc., a Buyer Power Case

In the historic cattle trial, Pickett v Tyson Fresh Meats, Inc., Plaintiff cattlemen alleged that Tyson/IBP used captive (contracted) supplies of cat tle ready for slaughter to manipulate the cash market, in violation of the 1921 Packers & Sto ckyards Act (PSA). After a five week Trial in Federal Court, the Jury found Tyson/IBP guilty o n all counts and assessed actual damages of $1.28 billion, which applied to a large but unspeci fied number of cattle, likely 10-50 million head. Justice for Plaintiff cattlemen was short, as the T rial Judge set aside the Jury’s verdict—a rare but not unprecedented legal action—and entered summary judgment for Tyson. The Eleventh Appellate Court subsequently sided with the Trial J udge. In 2006, the United States Supreme Court denied without comment Plaintiff’s Petition t o rehear the case, thus ending legal activities in Pickett v Tyson and effectively killing similar legal action pending un der the same Trial Judge against two other major beef packers, E xcel (Cargill) and Swift (ConAgra). Together the three packers account for over 70% of fed cattle slaughter. In essence Pickett was filed under the PSA, tried under Sherman and Clayton antitrust law, and overturned, in part, under the Robinson-Patman Act, with the Trial Court and the Appellate Court implicitly appointing themselves as fact-find ers. This is not how the American judicial and legislative system is supposed to function. The Courts gave a narrow and extreme interpretation to the antitrust rule of reason and to the meaning of “unfair” in the PSA. The PSA as well as the Sherman and Clayton Acts may be greatly weakened if not essentially repealed if the Courts’ Opinions in Pickett come to dominate case law.