Beef Packers Seek Dismissal Of Antitrust Lawsuit

Cattle in feedlot ( CAB )

Lawyers for America’s largest beef packing companies filed papers on Friday seeking dismissal of the class action suit filed against them by a group of ranchers last year.

The beef packers claim the “direct” evidence of their alleged scheme to drive down beef prices consists of “unreliable hearsay from two unidentified witnesses, neither of whom have personal knowledge of any collusion.”

Last April, R-CALF USA filed suit in Chicago against Tyson Foods, Inc., JBS S.A., Cargill, Inc., and National Beef Packing Company, LLC, and certain of their affiliates alleging that from at least January 1, 2015 through the present, the packers conspired to depress the price of fed cattle they purchased from American ranchers, thereby inflating their own margins and profits.

In July, that suit along with others against the beef packers, were consolidated in Minnesota federal court. U.S. Magistrate Judge Hildy Bowbeer said in July the court would oversee three proposed class actions filed by ranchers and industry trade groups alleging the packers violated federal antitrust law by suppressing prices.

In their request for dismissal on Friday, according to a report by Law360, the beef packers claimed that even after filing a 100-page brief opposing dismissal, the rancher’s legal team had not shown nearly enough facts to allow the case to proceed to massive antitrust discovery.

In addition to calling plaintiff’s witnesses’ testimony “hearsay,” the packers said, “The complaint also fails to allege any parallel action; fails to allege any ‘plus factors’ tending to show collusion; and fails to allege specific actions by each defendant in support of the supposed conspiracy. And it ignores the federal government’s explanation that market forces – not collusion – accounted for the changes in fed cattle prices and slaughter volumes that are at the center of plaintiffs’ claims.”

Antitrust plaintiffs are required to “provide sufficient factual information to provide the grounds on which the claim rests, and to raise a right to relief above a speculative level,” according to a prior antitrust case decided by the Eighth Circuit court in 2017. In that case, the court said, “Plaintiffs here are not required to show that their allegations are likely true, but at the same time, plaintiffs are required to plead allegations that are plausible, meaning backed up by factual allegations [rather than] mere speculation or conclusions.”

In Friday’s filing, the beef packers said the ranchers “make all of these allegations because they do not like the fact that fed cattle prices fell from historic highs starting in 2015.” The packers cited a Government Accountability Office that reported “that fall was due to market factors, not collusion.”

Further, the packers said Friday that “plaintiffs ignore demand factors, [but] these well-documented changes in market conditions amply explain any reductions in slaughter volumes, even as prices came down. So it is not just that plaintiffs’ allegations themselves are inadequate; there also is an obvious alternative explanation for all of plaintiffs’ complaints.”

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