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American Meat Institute Seeks Preliminary Injunction Against South Dakota Livestock Price Matching, Reporting Law

Thursday, June 24, 1999

The American Meat Institute (AMI) today filed a lawsuit to enjoin a South Dakota state law that requires South Dakota meat packers to pay the same prices every day for comparable livestock regardless of changes in
market conditions or other factors. In its complaint, filed today in the United States Court for the District of South Dakota Central Division, AMI said the law violates the Commerce Clause of the U.S. Constitution.

Slated to go into effect July 1, the law requires South Dakota meat packers to pay the same price for comparable livestock to producers from South Dakota and other states, and even from Canada -- a requirement which is impermissible under the U.S. Constitution. Packers also would be required to report prices paid to producers on a daily basis. Under the law, producers who do not believe they have received the highest price paid can sue packers and, if the producer prevails, receive triple damages.

The law was passed in the wake of record low hog prices resulting from an enormous oversupply of hogs. Low cattle prices also fueled support for the bill.

“Through the Pricing Statute, the State of South Dakota has adopted a statute that directly regulates and discriminates against interstate commerce,” the complaint stated. “The practical effect of the Pricing Statute is that the State of South Dakota has attempted to project its legislation outside of its borders…The Pricing State violates the Commerce Clause of the U.S.

For this reason, the Institute asked that the Court find the law invalid and unenforceable. “South Dakota’s new Pricing Statute is a clear example of a misguided effort by a state to help livestock producers rebound from low livestock prices that are largely attributable to the simple economics of oversupply. The state legislators who supported this bill did not understand the ramifications of its passage,” said AMI President J. Patrick Boyle. “This law’s provisions violate the U.S. Constitution and will have enormous ripple effects in other states and in Canada. We are confident that the Court will rule in our favor.”

AMI represents the interests of packers and processors of beef, pork, lamb, veal and turkey products and their suppliers throughout North America. Headquartered in Washington, DC, the Institute provides legislative, regulatory and public relations services, conducts scientific and economic research, offers marketing and technical assistance and sponsors education programs.

For more information contact:
Janet Riley
Vice President, Public Affairs
James Ratchford
Manager, Public Affairs

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