Food & Agriculture Quarterly June 2020 - Page 20

of market manipulation and unfair practices on the part of the four largest meat packing companies, who together control approximately 80 percent of the beef processing. An onslaught has followed. Iowa’s Republican Senator, Chuck Grassley, wrote his own letter, on March 31, 2020, to Attorney General Barr and Secretary of Agriculture Sonny Perdue calling on their “departments to investigate concerns raised by America’s farmers and ranchers about possible illegal practices in the cattle industry.” On April 6, 2020, Nebraska Republican Senator Deb Fischer delivered a letter to Secretary Perdue stating a belief that the issue had been developing over the last 12 months and the COVID-19 pandemic had only brought the cattle market issue to a head. On April 24, 2020, Senators Mike Lee and Amy Klobuchar, the Chairman and Ranking Member, respectively, of the Subcommittee on Antitrust Policy & Consumer Rights, delivered a letter to Attorney General Barr, Secretary Perdue, and Commodity Futures Trading Commission Chairman Heath Tarbert, expressing similar concerns. This was followed on May 5, 2020, with a letter to Attorney General Barr from 11 Attorneys’ General that expressed “concerns regarding market concentration and potential anticompetitive practices by the meat packers in the cattle industry” Investigations are underway. Secretary Perdue announced that the USDA’s Packers and Stockyards Division is investigating the divergence between farm and retail beef prices. On May 6, 2020, President Trump weighed in, telling reporters he had asked the DOJ to investigate the allegations. Then, on May 12, 2020, 19 Senators joined a letter expressing their concerns “about the heightened allegations of suppressed prices for cattle,” and urging the “DOJ to review the many dynamics at play here, including the allegations of price manipulation and actions taken to restrict competition.” A DOJ investigation is likely underway. Mushroom: Producers File Malpractice Lawsuit. The Mushroom litigation has been well-documented, but there is a new wrinkle. As a reminder, Mushroom growers and one of their cooperatives were accused of conspiring to reduce supply and increase prices. While the Mushroom growers and their cooperative argued the Capper-Volstead Act protected their conduct from antitrust liability, the court found that the cooperative had included at least one member of the cooperative that was not a farmer under the definition of the Act, exposing the cooperative’s entire membership to antitrust liability. One of the Capper-Volstead Act’s rigid administrative requirements is that to enjoy antitrust protection each of the cooperative’s members must qualify as a farmer, or the like, under the Act’s amorphous definition. Now, the mushroom growers are themselves suing. The cooperative has sued their former law firm, Saul Ewing Arnstein and Lehr LLP, alleging the advice the firm gave them two decades ago resulted in the above litigation and exposure to antitrust damages. They seek $50 million in damages. Specifically, the growers allege that the firm’s mistakes in forming the cooperative and admitting two non-farmers into the cooperative’s membership left the farmer-members unprotected under the Capper-Volstead Act. The case is American Mushroom Cooperative et al. v. Saul Ewing Arnstein & Lehr LLP et al., Philadelphia County Case No. 200302211 (C.C.P. Pa. 2020). Dairy: Producers Can Challenge No-Poaching Agreements. Dairy Farmers of America, Inc. (“DFA”) has been defending multiple antitrust class action lawsuits filed in a variety of jurisdictions. Now, 115 farmers that optedout of the class action may proceed to a jury trial in Vermont. The farmers had opted out of a prior class action lawsuit against DFA. Among other allegations, the farmers allege that DFA conspired with other cooperatives to not compete among each other for dairy farmer members. In other words, the farmers allege DFA and the other cooperatives agreed not to poach one another’s farmer-members, which the plaintiff-farmers contend was a violation of the antitrust laws. United States District Judge Christina Reiss ruled that the farmers had brought forth sufficient evidence to raise a genuine issue for trial. That evidence included the covenants not-to-solicit and sharing of information regarding farmer pay programs, and most favored PAGE 20