R-CALF continues court battles to change the course of the beef business
In spite of recent losses in its efforts to litigate changes to the beef business, R-CALF continues to use the court system to get its way.
Steve Dittmer, BEEF Magazine
Oct 08, 2020
Dittmer is Executive Vice President of the Agribusiness Freedom Foundation.
There have been a decision and two filings in R-CALF’s busy litigation department in recent days.
One was likely considered a win for the industry, one a further attack on the Beef Checkoff and the other a motion by activists harassing the industry.
In 2019, R-CALF and its Park Avenue, New York legal partners sued the big four U.S. meatpackers, alleging conspiracy to fix and suppress fed cattle prices, violating antitrust laws. A Minnesota judge’s opinion released Sept. 29 said that “Because Plaintiffs have not pleaded their direct evidence with sufficient detail and because they have not pleaded parallel conduct sufficient to support an inference of a price-fixing conspiracy,” he was dismissing the case. Several other cases had been consolidated with the R-CALF case and were included in the dismissal.
When we wrote about examining this Complaint in detail in 2019, we sarcastically ended our “analysis” with this quip, “Gee, what an airtight case.”
The Minnesota District Court judge who dismissed the case didn’t put it that way. But he did refer to “little evidence” regarding a meatpacker conspiracy to manipulate fed cattle prices and the Complaint’s resorting to “group pleading” about how the market reacted.
A big allegation by R-CALF was that the packers had conspired to cut slaughter numbers so that they could cut costs, drive cattle prices down and make more money. How the packers were to cover fixed costs with less revenue and still make money wasn’t addressed. We’ve mentioned before that R-CALF CEO Bill Bullard is a master at cherry-picking data and dates to try to prove a point. The judge picked up on that, too.
His opinion notes that the most specific allegations all relate to a single year, 2015, when the major packers reduced slaughter volume. He added that the case said little about the ensuing years when volume increased.
Of course, we know prices were up through 2014 and part of 2015 largely because cattle supplies had dropped.
The judge’s opinion also indicated confidential witnesses cited in the suit were not credible because of a lack of detail, lack of proof of their allegations and even information on what companies they worked for. In addition, the two witnesses alleged two different types of collusion, weakening the case.
The opinion also noted that cash sales of fed cattle had decreased and alternative marketing agreements (AMAs) had increased in recent years. Specifically, the Complaint compared the record prices of 2014 and alleged the drop in prices in 2015 was due to the packers colluding to reduce slaughter, buy fewer cash cattle, coordinate their procurement, buy more imported cattle and curtail processing or close plants.
The court noted that given all the factors presented in the case, despite allegations of collusion, there was a “natural explanation” for the packers reacting to the markets, the cattle supply and the nature of packing house operations for “parallel conduct.”
Then there’s the checkoff ...
That’s not all ...