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U.S. Court of Appeals Reverses Lower Court Ruling in Schumacher Case

Wednesday, January 30, 2008

(American Meat Institute)

The United States Court of Appeals for the Eighth Circuit yesterday held that a plaintiff must show that a packer acted intentionally in order to violate a provision of the unlawful practices section of the Packers and Stockyards Act (PSA).

The 8th Circuit decision reverses a previous lower court ruling that several meat packers had violated section 202(e) of the PSA when the Agricultural Marketing Service (AMS) erroneously reported beef prices provided by the packers as part of the AMS mandatory price reporting program.

After carefully reviewing the relevant PSA provisions, the court of appeals rejected the plaintiffs’ claim that they did not need to show that the packers had acted intentionally, stating that “[I]n sum, we conclude that to prove a violation of 202(e) a plaintiff must show that a packer intentionally committed unlawful conduct.” Because “the plaintiffs produced no evidence that the Packers intentionally violated the PSA by manipulating or controlling … cattle prices ….” the court of appeals ordered the trial court to enter judgment for the packers rather than remand the case to the trial court for further proceedings.

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