Last month a jury decided on a $1.28-billion penalty against Tyson Fresh Meats in a class-action lawsuit. Now, a federal judge has ruled the Alabama jury's decision is unjust.
The case was brought against Tyson because of the packer's use of forward contracts and marketing agreements in the cattle market. The plantiffs, six cattleman, who actually filed the case in 1996 against IBP, contend that Tyson used the marketing agreements to manipulate cattle prices and purchase animals from select producers. The jury agreed.
At the core of the issue is the battle over consolidation in agriculture. The jury apparently saw the case as the plight of small agriculture against large agriculture. Some analysts also believe the large award was a backlash from the public's increasing distrust of and disgust with corporate America.
But the jury's decision has the potential to impact more than Tyson or the cattle market, it could force a change in the way U.S. packers purchase livestock– including hogs.
The judge's latest ruling does not change the jury's finding that Tyson violated the law. It merely says the 1.28-billion penalty "clearly overstates the defendant's liability in this case." The judge will now determine the penatly.
Of course Tyson is appealing the case altogether, asking the judge to overturn the finding that it violated the law. He has not yet ruled on that request.