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