|Attorney Offers Observations On IBP-Tyson Price-Fix Case|
|By David Bowser|
2003 – http://www.livestockweekly.com/papers/05/01/27/whldomina.asp
|DENVER — “Julia walked into the courtroom in Montgomery with 75 other people,” said Dave Domina, an Omaha, Neb., attorney who represented cattlemen suing the world’s largest beef packer in Montgomery, Ala., last year.”She was the fifth of those 75 people to walk into the courtroom. She didn’t know it, but that meant there was a pretty darn good chance statistically that she was going to serve on the jury.”|
Julia was 65 years old.
“She looked like she was frail and in ill health,” Domina continued. “She may have weighed a hundred pounds.”
When the jury panel was asked if any of them had served on a jury before, Julia raised her hand along with a few others.
“No other prospective juror had served three times,” Domina said. “Only Julia.”
Domina said she talked with such an accent and such difficulty of speech he was tempted at first to think she was illiterate.
“Julia answered a few more questions and was largely ignored by the process of choosing the jury, and she survived to sit in the third seat in the front row for the next five weeks,” Domina said.
Domina later learned that Julia was the research librarian for the University of Alabama’s public library system.
Six months before this jury was empanelled, he said, budgets dictated that position in the library be eliminated. The final decision came down between Julia and a 32 year-old widow with three young children. Either Julia or the mother had to go.
Julia resigned her position so the mother of the three children wouldn’t lose her job.
“Nobody knew that when she was sworn in as a juror in this case,” Domina said.
Julia has never been out of the Deep South. She didn’t live too far from Henry Pickett, the plaintiff in the case from Alabama.
At the sixth annual convention of R-CALF, Domina talked about the case, Pickett v. IBP, its implications, where it stands and what the future might hold.
The case stems from a lawsuit filed in 1996, alleging that IBP, now Tyson Fresh Foods, violated the Packers and Stockyards Act of 1921 by using captive supplies, cattle contracted for slaughter, to manipulate prices. It was made a class action case in 2000, representing cattlemen who had sold their animals to IBP between 1996 and 2002.
Following six weeks of testimony, arguments and deliberations, the Alabama jury found for the cattlemen and awarded them $1.28 billion in damages. The judge in the trial, Senior U.S. District Judge Lyle Strom, later set aside the jury’s verdict. The case is now before the 11th Circuit Court of Appeals.
The judge concluded that he had to take the jury verdict away, Domina said, because he believed IBP had proven that captive supply would given them a constant and reliable source of cattle, an affirmative defense in an antitrust case.
“I think he genuinely believed that,” Domina said. “I know this judge. I respect him. I’m not just saying that because he’s from my home state. It is a very rare event when this happens. There was no doubt during the oral arguments that the three members of that (appeals court) panel know it’s a rare event.”
But Domina maintains that the judge viewed the case under the Sherman Anti-Trust Act, not the Packers and Stockyards Act, the law under which the cattlemen sued.
“We think we have by far the proper legal argument,” Domina said, “and that therefore the jury verdict has a high probability of being reinstated.”
Domina said that when they went to trial, he knew they would be trying the case before a jury that was not from cattle country. Therefore, he said, they had to start the case by teaching the jury about the cattle business, and they had to teach them in such a way as to dispel what Domina said are the many falsehoods he felt the other side would try to use in the case.
“Those falsehoods included the falsehoods about genetics and about whether the packers’ use of captive supply encouraged people to improve their genetics,” Domina said.
The plaintiffs suing IBP called on Leo McDonnell, not because he is the president and founder of R-CALF, Domina said, but because he’s a seedstock producer.
“As the case progressed,” Domina said, “we called on a couple of feeders, big feeders with a lot at stake, who were willing to testify about what the cash market means to them and their business.”
At the end of the testimony after the first three witnesses, Domina said Joe Whatley, one of the Alabama lawyers for the cattlemen, told him that with the testimony of economist Robert Taylor of Auburn, Whatley thought they’d made a case that they could submit to the jury and get a verdict that wouldn’t be taken away.
Domina said they called witnesses representing the class in the class action lawsuit and some more feeders from other parts of the country and their economist, Taylor.
“Bob had been in depositions for four full days with Tyson,” Domina said. “He had performed hundreds of regression analyses and had seen more than a million data points from Tyson records.”
Each data point represented a sale of cattle.
“He had looked at more than a million individual transactions,” Domina said. “The attack on him was that he wasn’t qualified and hadn’t done enough work.”
Domina said Taylor had seen more about the packing industry than all of the economists in the history of the United State Department of Agriculture had seen because the packers had never disclosed the data to the USDA.
“When we closed with our evidence,” Domina said, “we wanted to reach Julia and the other 11 jurors with one single, forceful, simple, but really important impression.”
Herman Schumacher from near the border of North and South Dakota was their last witness. That part of the country, Domina said, has land with little utility except for grazing cattle.
“He got on the witness stand and he was only there four or five minutes,” Domina said, “but after I asked him to describe where he was from and describe the appearance and configuration of the lay of the land in those states, I said, ‘What do you use land like that for?'”
Schumacher leaned forward in the witness stand, looked at Domina and then looked at the jury and said, “We live on cattle.”
Tyson’s lawyer, Domina said, asked Schumacher if he flew to Montgomery just to say what he said. Schumacher replied, “Yes.”
“Did you have a good flight?” asked the Tyson lawyer.
“Yes,” Schumacher replied.
“Hope you have a good flight home,” the Tyson lawyer said.
Domina said the packer missed the point.
“We hoped the jury hadn’t,” Domina said.
One of the important things in the case, Domina said, was that they were able to make public testimony by some of the officers and directors of the nation’s largest slaughterhouse.
One of those directors was a former undersecretary of agriculture. She gave a deposition that Domina videotaped in Sioux City, Iowa.
“When I got home that evening,” Domina said, “I said to my wife, ‘If I ever get a chance to play the deposition that was given today by a director of IBP, the cattlemen will win their case.’”
In the courtroom, Domina played the videotape and watched the look on the jurors’ faces.
“I watched every single, solitary juror’s face turn from dumbfounded to expression-filled to mirthful,” Domina said. “I watched the United States district judge, who was trying to keep a close rein on his face, bite his hand so he would not laugh as we listened to a director of IBP — not once, not twice, but three times — testify under oath that the company’s annual revenues were nine million dollars.”
When Domina asked her if she was sure it million and not billion, she said it was million.
“That was one of her better answers,” Domina said.
Domina said the IBP lawyers called captive suppliers to the stand.
“They affirmed the description of the market that our witnesses had given,” Domina said. “They described the advantages of captive supply and said they had the right to contract, and therefore we should lose.”
IBP proved captive supply can assure a steady and continuous stream of cattle to the packing plant.
“We, of course, conceded that,” Domina said.
Bruce Bass, the IBP vice president in charge of procuring cattle, testified that captive supply assured a steady stream of cattle to the plant, and that’s why the company uses captive supplies.
Domina said Bass admitted that the packer would have to pay more if they bought the cattle on the cash market.
Bass, Domina said, admitted to setting the price for IBP’s cattle bids each day, and that the bid depended upon the inventory at the plants. That inventory includes the cattle under contract. The more cattle under contact, the lower the price.
“He shrugged his shoulders,” Domina said, “and said, ‘Of course.'”
With that, Domina contended, the vice president for cattle procurement for the largest beef packer in the United States admitted a violation of the Packers and Stockyards Act.
Domina said that at the end of the trial, the judge announced he would instruct the jury according to guidelines under the Sherman Anti-Trust Act, not the Packers and Stockyards Act.
“The difference is that the burden of proof under the Sherman Anti-Trust Act is significantly higher,” Domina said. “The reason it is significantly higher is because if you bring a Sherman case, you’re entitled to triple damages and you’re entitled to recover attorney fees.”
There’s no provision for that under the Packers and Stockyards Act.
Domina said that by then he thought the judge had become frightened of the lawsuit.
During a battle over a motion earlier in the case, Domina said, the judge commented that he didn’t know how he would ever impose an injunction on IBP.
“In this candid and intelligent and thoughtful exchange, the judge — who should get credit for it, not be condemned — made it very clear that he was threatened by the responsibility that he suddenly realized he had,” Domina said.
The Omaha attorney said since 1921 there have been 15 presidents of the United States and there have been 24, soon to be 25, attorneys general.
“None of them,” Domina insisted, “have enforced the Packers and Stockyards Act in an effective way, and certainly not since Franklin Roosevelt’s first term in the early 1930s.”
Despite the stiffer requirements, Julia and the 11 other jurors returned a verdict for the cattlemen and awarded them $1.28 billion.
But the judge, viewing the case through the lens of the Sherman Anti-Trust Act, where any economic justification for IBP’s actions justifies the action, a few weeks later set aside the jury verdict.
“Our contention is that we didn’t try a Sherman Anti-Trust case,” Domina said. “If we had, the verdict would have been $3.8 billion, not $1.3. We would have had an attorney’s fee award.”
Domina said profit doesn’t justify a monopoly.
“It never has,” Domina said. “It never will. If it does, then the anti-trust law has been repealed by judges.”
The case has been appealed to a three-judge panel in the 11th Circuit Court of Appeals.
One of those judges is an expert in anti-trust cases.
“In one published opinion by this judge,” Domina said, “he starts his opinion by saying, ‘The anti-trust laws of the United States are the Magna Carta of our economic freedom. They are as important to our economic liberty as the Bill of Rights is to our personal liberty.’
“We think we’ll get a fair shake from him and the other two judges.”
Domina said he thinks the cattlemen have a good chance on appeal.
“We may have to retry the damages aspect of the case,” he conceded, “but we expect that there will be injunctive relief.”
If the appellate judges find for the cattlemen, there will be another trial for injunctive relief, that is, an order by the judge changing the way packers buy cattle.
The appeals court could send the case back down and order that the damages aspect of the trial that was held in Montgomery last year be retried.
Retrying the case wouldn’t be all that disappointing, Domina said.
“We probably have the potential to get a larger verdict,” he opined. “We’d like to keep the one we have, but if we have to retry it, then so be it.”
Domina said he expects to hear from the appeals court sometime before June, but there is no timetable for the judges to issue a ruling.
If the court finds for IBP, Domina said the cattlemen can ask the entire 11th Circuit, 11 judges, to hear the case. That is not likely, he said, but it could happen.
In the end the case probably will be appealed to the U.S. Supreme Court.
“If we win in the 11th Circuit, Tyson can go through the same steps,” Domina said.
The Supreme Court does not have to hear the case. They can let the appellate court ruling stand.
“A lot of people think that this particular anti-trust case will wind up on the Supreme Court’s docket,” Domina said. “We’ll see.”
After the judge in Alabama read out the verdict, Domina ran into Julia and two other women from the jury at the foot of the stairs in the Montgomery federal courthouse.
“Julia leaned forward and grabbed my hand and said, ‘I was prepared to stay here in this building until Christmas if I had to to get this verdict for your people.'”
Julia, Domina said, has become one of the most important people in the history of the cattle business.
Stay Informed!Subscribe to information and news updates related to farming, food and health issues, click here!
Follow me on TwitterMy Tweets
- This Cattleman's Got A Beef
Photo: Sean Cayton - 2003People producing good food from happy animals, while improving the environment, shouldn’t have to fear the government.
Photo above featured in a 2003 article: This cattleman's got a beef, Mike Callicrate and Ranch Foods Direct take on the big meat packers by Kathryn Eastburn
- BIG Food Exposed
- Great Ranches of the West
Purchase Great Ranches of the West for only $34.95 and $20 will go to an Organization or Project of your choice!
"An eye opening and heart touching portrait of a culture and industry that we are in great danger of losing. This book will help readers understand the urgency of preserving the Western ranchlands inhabited by families and rural communities that provide nourishing food for our nation, preserve a healthy natural environment and entrust that great American values will endure."
- Mike Callicrate
An Endangered Species
Every month 1,000 ranches go out of production. It's the national security issue that no one is talking about.
Food Policy & LawE. Coli Confessions Part I
by John Munsell | Oct 11, 2011
Editor's Note: This is the first part in a series written by John Munsell of Miles City, MT, who explains how the small meat plant his family owned for 59 years ran afoul of USDA's meat inspection program. The events he writes about began a decade ago, but remain relevant today.
They say that confession is good for the soul. I've been involved in a series of ugly events since my plant in 2002 recalled 270 pounds of ground beef contaminated with E.coli O157:H7 and now want to admit the embarrassing truth for public review. more
Tagsadvanced meat recovery antibiotics beef checkoff Big Food BPI Callicrate Callicrate Beef Callicrate Cattle Co. Cargill Chipotle Colorado Springs COOL Dudley Butler e. coli Eric Schlosser fast food nation food Inc. Foodopoly GIPSA HSUS IBP Industrial Agriculture JBS McDonald's meat packers Mike Callicrate Monsanto NCBA OCM Organization for Competitive Markets pink slime R-CALF Ranch Foods Direct Rick Hughes Smithfield Sodexo steroids Sysco Tom Vilsack Tyson U.S. Farmers and Ranchers Alliance USDA Vandana Shiva Walmart zilmax
Top Posts & Pages
National News Supplement