A federal judge dismissed antitrust claims filed by a putative class of cattle ranchers suing some of the world’s largest meatpackers in a longrunning case that alleges an industry-wide scheme to fix beef prices.
Meatpacking giants
Tunheim appeared doubtful of the ranchers’ ability to save their case, writing that they “have not shown how they would amend their complaint to establish antitrust standing or otherwise overcome the deficiencies in their first pleading.”
The dominant meatpackers have faced years of litigation from suppliers, retailers, and consumers over their alleged market manipulation. The lawsuit is part of a wave of cartel litigation involving livestock, agriculture, and protein. JBS, a Brazilian meatpacker, reached a $52.5 million class action settlement with beef wholesalers in September 2022.
A group of cow-calf ranchers—the first step in the beef supply chain—alleged in an October 2022 lawsuit that the meatpacking giants coordinated to reduce the volume of beef, thereby driving up prices due to a steep drop in supply in 2015. That both harmed consumers and retailers on one side, and suppliers like the ranchers on the other, they said.
The meatpackers violated the Sherman Act’s provisions against price-fixing and market allocation and the Packers and Stockyards Act, the ranchers said, in addition to two sets of state antitrust and consumer protection laws. But Tunheim found the harm they suffered was too far removed from the meatpackers’ alleged price and supply manipulation.
No ‘Causal Relationship’
There are too many stages in the beef supply chain—and too much time between the ranchers’ sale of cows and meatpackers’ purchase of them—to adequately establish standing for the Sherman Act and Packers and Stockyards claims, Tunheim said.
He applied a 1983 antitrust standing test established by the US Supreme Court in Associated General Contractors of California v. California State Council of Carpenters. The test requires in part that plaintiffs demonstrate a causal connection between the alleged violation and the harm they suffered, whether Congress intended the antitrust laws to address that type of harm, that the defendants had “improper motive,” and how directly the injury and market restraint are connected.
“The Court finds that Plaintiffs failed to establish antitrust standing under AGC,” Tunheim wrote, referring to the high court test. “They did not plausibly allege a causal relationship between Defendants’ conduct and their injury, or that their injury and damages are in fact traceable to Defendants’ actions. Plaintiffs instead rely on inferences based upon the Court’s prior analysis for Class Plaintiffs, which is not informative here given the more attenuated connection between Plaintiffs raising calves and Defendants processing and packing beef.”
He found similar issues warranted dismissal of the charges under various state laws.
Tunheim denied the ranchers leave to amend the complaint, but said they can file a letter with the court outlining their plans to fix the standing issues, “which the Court will then consider and determine whether leave to amend is warranted.”
The case is In Re: Cattle and Beef Antitrust Litigation, D. Minn., No. 0:22-md-03031, 8/17/23.
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