A federal appeals court has made a “bold decision,” according to the Southeast Texas Record, that will make it easier for farmers to sue meat packers. The case involves chicken farmers working under contract to Pilgrim’s Pride. Bo Pilgrim, the company’s owner, is also a contract grower with Pilgrim’s Pride, but he works under a payment system that is not offered to other farmers. The Texas growers sued Pilgrim’s Pride under the Packers and Stockyards Act, arguing Bo Pilgrim was receiving “undue and unreasonable preference.”
Other courts have ruled that farmers making claims under the Stockyards Act must show that fair competition has been harmed. That’s a huge hurdle, and an expensive one to cross, leaving many small growers without protection under federal law. It’s also an interpretation that other courts have adopted.
The importance of the Texas case is that a federal appeals court has ruled that farmers can sue under the Stockyards Act without proving an adverse effect on competition. This will open up the courts for small producers who feel they’ve been wronged by large packers.