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Sixth Circuit Joins `Legion' Of Appellate Courts Requiring Proof of Anticompetitive Effect to Support PSA Claims

Wednesday, May 12, 2010

(American Meat Institute)

In a ruling consistent with seven other appellate courts, the United States Court of Appeals for the Sixth Circuit held that for a plaintiff to establish under Sections 202(a) or 202(b) of the Packers and Stockyards Act (PSA) that a practice is "unfair, unjustly discriminatory, or deceptive," the plaintiff must show that the practice has an anticompetitive effect — that it adversely affects or is likely to adversely affect competition. 

In its opinion in Terry v. Tyson Farms, Inc. the three judge panel stated that it was joining a "legion" of appellate courts that have held that demonstrating an anticompetitive effect is a necessary element of a PSA claim.

AMI and the National Chicken Council (NCC) jointly submitted an amicus brief in the Terry case urging the Sixth Circuit to adopt the position taken by the other appellate courts.  The Sixth Circuit agreed, stating that the "tide" of precedent had become a "tidal wave," with this decision coming on the heels of a recent decision in Fifth Circuit, Wheeler v. Pilgrim's Pride Corp., in which the Fifth Circuit came to the same conclusion and in which NCC and AMI also participated as amicus. 

Eight federal appellate courts have now considered whether the PSA requires a showing of anticompetitive effect with every circuit concluding such a showing is necessary.  The plaintiffs in Terry still could file a petition for certiorari in the U.S. Supreme Court.    

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