A federal court jury awarded $1.28 billion Tuesday to a group of cattlemen after finding that the nation's largest beef packer, Tyson Fresh Meats Inc., had unfairly manipulated cattle prices.
Attorneys for Tyson Fresh Meats said they planned to appeal the class action verdict.
Cattlemen from across the country filed suit in 1996 against Tyson, known then as IBP Inc., claiming the company used contracts with a select few beef producers to create a captive supply of cattle.
The plaintiffs said Tyson relied on this captive supply when cattle prices were high and entered the market for cattle only when prices were low _ thereby depressing cattle prices.
"This verdict represents an extraordinary day for cattlemen in this country," said the cattlemen's attorney, Randy Beard of Guntersville.
IBP merged with Arkansas-based Tyson Foods Inc. in 2001.
The trial lasted about a month and jurors deliberated for about four days before returning the verdict.
Eight years have passed since six cattlemen filed a class-action lawsuit on behalf of up to 30,000 producers who sold cattle to Tyson in the cash market from February 1994 to October 2002.
The exact size of the class is unknown, and Tyson contends it is much smaller than 30,000.
Central to the cattlemen's claim is Tyson's use of marketing agreements in which cattle producers pledge to ship a certain number of cattle to a packer. The plaintiffs contend Tyson used those agreements to drive prices down, threatening the livelihood of thousands of ranchers.
Tyson countered that even though it buys roughly one-third of the 30 million cattle sold to U.S. packers each year, that share of the market does not allow the company to set the market price.
An Auburn University agricultural economist testified that Tyson's contracts had driven down cattle prices by 5.1 percent, or about $2.1 billion, during the eight-year class period. The defense countered with two economists who claimed the Auburn professor's model greatly exaggerated the plaintiffs' alleged loss.
