April 12, 2006
Jury sets $9.25 mln in fines vs. beef companies
ABERDEEN, South Dakota (Reuters) - A federal jury in South
Dakota on Wednesday recommended fines totaling $9.25 million
against three of the largest U.S. beef companies in a suit that
alleged the companies used incorrect government beef prices to
drive down cattle prices.
The recommended fines include $4 million against Tyson
Foods Inc.; $3 million against Cargill Meat Solutions, a unit
of Cargill Inc.; and $2.25 million against Swift & Co. A fourth
company named in the suit, National Beef Packing Co., was
Tyson, the largest U.S. meat company; and Cargill, the No.
2 beef producer, said they were disappointed in the jury's
decision. Tyson said it will appeal if the decision is upheld,
while Cargill said it was studying its options.
Swift & Co. did not immediately comment.
The suit related to the period of April 2 to May 11, 2001,
when calculating errors by the U.S. Agriculture Department
caused beef prices to be quoted lower than they should have
been in the USDA's daily boxed beef reports. USDA later
admitted the errors and published the correct prices.
Three cattle producers filed the class-action suit in 2002,
claiming that before USDA announced the errors, the beef
companies knowingly used the incorrect data as leverage to
depress cattle prices.
The court case went to the eight-member jury on Tuesday.
"I think it is huge. I'm excited," said Herman Schumacher,
a Herreid, South Dakota, producer and one of the three who
filed suit. "I think the verdict is strong. The courts, I
believe, will uphold it even at the appellate level."
The other plaintiffs were Roger Koch of Nebraska, and
Michael Callicrate of Kansas.
"While we're disappointed by the jury's decision, this case
is not over and if the verdict is entered by the court we
intend to appeal," Tyson said in a statement. "As noted during
the trial, our company was unaware of the USDA price reporting
mistake until it was publicly announced."
Tyson said it dealt fairly with producers during the period
in question and "paid all amounts agreed upon for cattle."