Amicus Curiae Brief — Terry v. Tyson Farms, Inc.

» OFFICE OF THE CLE?

ne

ALTON T. TERLY,

Petitioner,

TYSON FARMS, INC.,

Respondent

On Petition For Writ Of Certiorari

To The United States Court Of Appeals

For The Sixth Circuit

BRIEF OF 55 FARMING, RANCHING, AND

CONSUMER ORGANIZATIONS AS AMICI CURIAE

IN SUPPORT OF THE PETITIONER

DAVID A. BALTO DAVID G. VELDE

Counsel of Record General Counsel

(application pending) NATIONAL FARMERS UNION

LAW OFFICE OF DAVID A. BALTO 20 F St. NW, Suite 300

1350 I St. NW, Suite 850 Washington, DC 20001

Washington, DC 20005 202-554-1600

202-789-5424

david.balto@yahoo.com

COCKLE LAW BRIEF PRINTING CO (800) 22

OR CALL COLLECT (402) 342-2831

TABLE OF CONTENTS

fe Ge ae

Table of Authorities

Interest of Amici Curiae

Introduction and Summary of Argument

Argument

[. Current market conditions make inter-

pretation of the PSA a critical issue of

national importance

The PSA is Broader than the Sherman

TN TE Fai ovina concn eeeecesccte cccsndneress

The Sixth Circuit Misconstrued the PSA

by Conflating PSA Standards with Anti-

trust Standards Used Under the Sher-

man and Clayton Acts

[V. Statutory Construction Rules Require a

Plain Reading of §§ 192(a)and(b)

Conclu

Appendix

Amici List..

TABLE OF AUTHORITIES

CASES

Armour & Co. v. United States, 402 F.2d

(7th Cir. 1968)

Bates v. United States, 522 U.S. 23 (1997)

Been v. O.K. Indus. Inc., 495 F.3d 1217 (10th

Cir. 2007)

Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc.,

429 U.S. 477 (1977)

Connecticut Natl Bank v. Germain, 503 U.S.

Ds” 0 Sa Rs a ne aT eA, GEIR ON Ter Ne Dal Re LF

FTC v. Motion Picture Adver. Co., 344 U.S. 392

(1953)

FTC v. Sperry & Hutchinson, & Co., 405 U.S.

BNC EIR it ctl Kut pcarsavedeusensdieehecintoicieatesieueeat Le,

Gerace v. Utica Veal Co., 580 F. Supp. 1465

Er he ok a aaa a ee eae 17

Group Life {ns. & Health Co. v. Royal Drug Co.,

te ac ocodsndecscvanecsenvenisvmeantpaernines 15

Kinkaid v. John Morrell & Co., 321 F. Supp. 2d

1090 (N.D. Iowa 2004)

Lamte v. U.S. Trustee, 540 U.S. 526 (2004)............... L!

London v. Fieldale Farms Corp., 410 F.3d 1295

(11th Cir. 2005)

Oncale v. Sundowner Offshore Servs., Inc., !

U.S. 75 (1998)

Russello v. United States, 464 U.S. 16 (1983)

TABLE OF AUTHORITIES — Continued

Schumacher v. Tyson Fresh Meats, Inc

F. Supp. 2d 748 (D.S.D. 2006)...

Stafford v. Wallace, 258 U.S. 495 (1922)

Standard Oil Co. of New Jersey l l/nited

States, 221 U.S. 1(1911)..

Swift & Co. v. United States, 393 F.2d 247 (7th

ia cass apecawesees

lennessee Valley Authority v. Hill, 437 U.S. 153

(1978)

United States v. Perdue Farms, Inc., 680 F.2d

eh ie”. CO, ae .):)) are

Wheeler v, Pilgrim’s Pride Corp., 591 F.3d 355

(5th Cir. 2009) ...............008. 1 Se oe)

White v. Pilgrim’s Pride Corp., 2008 WL

4471656 (E.D. Tex. Sept. 29, 2008).....

Whitman v. Am. Trucking Ass’ns, 5.

(2001)

Wilson & Co. v. Benson, 286 F.2d 891 (7th Cir

7 U.S.C. § 192(a). ; passim

U.S.C. § 192(b)...... ; passim

U. § 192(c) ....

U. Y 192(d)...

f U.S.C. $ 192(e)....

TABLE OF AUTHORITIES — Continued

(Oth Fee ef re peers SOPOT,

15 U.S.C. § 45(a)(1)....... ene ee «in

H.R. Rep. No. 85-1048 (1957) | rR one 1,8

OTHER AUTHORITY

AM. BAR Ass’N, Antitrust Law Developments

OT ee me)

Am. ANTITRUST INs’T, The Next Antitrust Agen-

da (Albert A. Foe red., 2OO8)........ccsccccccscccsccvocsesssees 6

Antonin Scalia, The Rule of Law as a Law of

Rules, 56 U. Cut. L. REv. 1175 (1989) .............. 14,17

Brief for the United States of America as

Amicus Curiae supporting Plaintiffs-

Appellees, Wheeler v. Pilgrim’s Pride Corp.,

591 F.3d 355 (5th Cir. 2009) (No. 07-40651) ..........10

Brief for Petitioner, Terry v. Tyson Farms, Inc.,

PN, «SAIN SPI so sccuccéuascascesnsonccodavesocescesvedensaes 12

C. Robert Taylor, Buyer Power Litigation in

Agriculture: Pickett v. Tyson Fresh Meats,

Inc., 53 ANTITRUST BULL. 455 (2008)........ satire

Christopher Bass, More than a Mirror: the

Packers and Stockyards Act, Antitrust Laws,

and the Injury to Competition Requirement,

12 DRAKE J. Acric. L. 423 (2007).................... Ene

Concentration in Agriculture and an Examina-

tion of the JBS/Swift Acquisitions: Hearing

Before the Subcomm. On Antitrust, Compett-

tion Policy and Consumer Rights, 110th

Cong. 3 (2008)

TABLE OF AUTHORITIES — Continued

Page

Michael C. Stumo & Dougias J. O’Brien, Anti

trust Unfairness vs. Equitable Unfairness in

Farmer/Meatpacker Relationships, 8 DRAKE

J. AGRIC. L. 91(2003).............. Iiedechitidesetvenvaviilly iy aM

NATL AGrIc. STAT. SERVICES, U.S. DEP’T OF

Acric., U.S. Broiler Industry Structure

SUN suds ccnkice seus cceusiauschessensesdioesetein re driauiasueebal wie

Nigel Key & James M. McDonald, Local Mo

nopsony Power in the Market for Broilers?

Evidence from a Farm Survey, Presented at

the Annual Meeting of the Agricultural and

Applied Economics Association (July 27-29,

I fe eh Ae ee sa

Note, Challenging Concentration of Control in

the American Meat Industry, 117 HArv. L.

ee ee CRED oe Au ccuucusanvacniveceovecs ee os ae

Peter Carstensen, Buyer Power, Competition

Policy, and Antitrust: The Competitive Effects

of Discrimination Among Suppliers, 53 ANT!

PRIS TULA, BIE CO) vvescsssiscssesctdscccvsreenss Pesetavee

Public Workshop Exploring Competition in

Agriculture: Poultry Workshop, U.S. DEP’T OF

JUSTICE & U.S. Dep’r or AGric. (May 21,

aad ioe tetera ane a carats odes at ot us Chae ve anasaiobantevntes 4

Steve W. Martinez, Vertical Coordination in the

Pork and Broiler Industries: Implications for

Pork and Chicken Products, FOOD AND RURAL

ECONOMICS DIVISION, ECONOMIC RESEARCH

SERVICE, U.S. DEP’r OF AGRICULTURE, AGRIC

ECONOMICS REPORT No. 777 (1999)....... er 5

Vi

TABLE OF AUTHORITIES — Continued

William FE. Rosales, Dethroning Economi

Kings: The Packers and Stockyards Act of

1921 and its Modern Awakening, 5 J. AGRI

& Foop Inbus. Ora., Article 4 (2004) 1,9

INTEREST OF AMICI CURIAE

The current question before this Court is an issue

of critical national importance and will determine the

effectiveness of the Packers and Stockyards Act (PSA)

in meeting its central goal of creating fair, open

efficient, and transparent markets for livestock. Se

H.R. Rep. No. 85-1048, at 2 (1957). Recent court

decisions have ignored the plain language and intent

of the Act by grafting an anticompetitive injury r«

quirement on its remedial provisions, thereby treat

ing the Act as if it were another antitrust law rather

than a law designed to prevent a myriad of abuses in

agricultural markets

he amici are 55 farming, ranching and consume!

groups, that represent more than 400,000 farmers

and ranchers nationwide, and are actively engaged

in advocating for free and competitive agricultural

markets. The National Farmers Union, with a mem

bership of 250,000 farm and ranch families, works to

protect and enhance the economic interests and

quality of life of family farmers and ranchers and

Pursuant to Supreme Court Rule 36.7 amici state that

1) this brief draws from an amicus brief presented in the Fifth

Circuit in Wheeler v. Pilgrim’s Pride, infra, p. 12, and Prof. Peter

Carstensen, counsel for the petitioner here, assisted in the

drafting of the Wheeler brief; and 2) no person or entity other

than the amici, their members and counsel have made a mone

tary contribution intended to fund the preparation or submis

sion of this brief. Pursuant to Rule 37.3 the parties were

provided with at least 10 days notice of amici’s intention to file

and all parties have consented to the filing of this brief and such

consents are lodged herewith

rural communiti« he Rural Advancement Fou

dation Internationa! USA (RAFI-USA) cultivate

markets, policies and communities that support

thriving, socially just, and environmentally sound

family farms. The Ranchers Cattlemen Action Legal

Fund, United Stockgrowers of America (“R-CALF

USA”) 1 a national non protit cattle ; ociation

representing thousands of U.S. cattle producers in 46

tates on issues concerning Lernationa! rade and

marketing to ensure the profitability and continued

viability of independent U.S. cattle producer: Dh

Organization for Competitive Markets is a national

non-profit, public policy research organization that

works to help return the food and agricultural! ecto!

to true supply-demand based competition throug!

ompetitive markets. ‘The American Antitrust Inst

tute (AAI) is an independent non-profit education

research, and advocacy organization devoted to

advancing the role of competition in the economy

protecting consumers, and sustaining the vitality of

the antitrust law AAI believe that because there

are limit: to what antitrust an be expected

achieve, Congress has the authority to impose ma!

ket-facilitating statutes that do not necessarily incor!

porate antitrust doctrines. Amici are all actively

engaged 1m) advocating for lree and competitive apr

cultural market and believe that granting the

Petition for Writ of Certiorari is a crucial st

maintaining the integrity of the Packer ind St

yards Act

INTRODUCTION AND

SUMMARY OF ARGUMENT

The PSA was designed by Congress to be broader

than the antitrust legislation preceding it because of

the nature of abuses in agricultural markets, and the

inability of standard antitrust law to effectively rein

in these abuses. Classic tenets of statutory constru

tion require a plain reading of sections 192(a) and (b)

of the PSA to prevent unfair practices that harm

farmers. Grafting onto these provisions a require

ment to demonstrate an adverse impact on competi

tion will severely restrict the ability to bnng action

under the PSA. and unde rmine conpre ional intent

to ensure fair and competitive livestock markets. The

unique nature of abuses by highly concentrated

buyers in agricultural markets, and in particular the

broiler market. only underscor the nece ity ol]

Court review to clarify that there is no unwritten

requirement ol demonstrating competitive injury

the PSA

ARGUMENT

I. CURRENT MARKET CONDITIONS MAKE

INTERPRETATION OF THE PSA A CRITI-

CAL ISSUE OF NATIONAL IMPORTANCE

The PSA is of vital importance now more than

ever because of the increasing concentration of meat

processing market toth the legislative and execu

tive branche have demonstrated that increasing

market concentration is a crucial public policy con

cern. In 2010, the United States Department of

Justice and the Department of Agriculture (USDA)

embarked in a precedent-setting joint effort to exam-

ine competition in agriculture. In a series of hearings

attended by thousands of farmers, the enforcement

agencies heard from hundreds of farmers and _ re-

ceived over 15,000 public comments. The hearings

addressed the crisis in agriculture markets resulting

from increased processor concentration, which has led

to decreased compensation for farmers, forcing thou-

sands of farmers out of business.’

Nowhere is this crisis as stark as in the broiler

market. As USDA Secretary Vilsack observed “in

1963 the top four firms controlled 14% of chickens

slaughtered, today it is roughly 57%... . [I]t is not

uncommon for a grower to have to do business

with only one company in their area.” Public Work-

shop Exploring Competition in Agriculture: Poultry

Workshop, U.S. Der’? or Justice & U.S. DEPT OF

' Congress has expressed similar concerns. In 2008, the

Subcommittee on Antitrust, Competition Policy and Consumer

Rights of the Senate Judiciary Committee conducted a hearing

on concentration in agriculture because of the concerns that

increased consolidation results in “reduced market opportuni-

ties, possible anti-competitive and predatory business practices,

and fewer choices and higher cost for American consumers.”

Concentration in Agriculture and an Examination of the

JBS/Swift Acquisitions: Hearing Before the Subcomm. On

Antitrust, Competition Policy and Consumer Rights, 110th Cong.

3 (2008) (statement of Sen. Grassley, Member, Sen. Comm. on

the Judiciary).

Acric. Il (May 21, 2010), available at http://www.

justice.gov/atr/public/workshops/ag2010/alabama-ap

workshop-transcript.pdf (hereinafter Poullry Work

shop) (emphasis added). The broiler industry has

been transformed from an industry once consisting

of millions of flocks to one consisting of “less than

50 specialized, vertically integrated agribusiness

firms.” Nat’. AGric. Star. Services, U.S. Derr Or

Aacric., U.S. Broiler Industry Structure (2002).

Other economic studies have confirmed that

processing in the broiler industry is highly concen-

trated and this makes the market susceptible to

abusive practices and reduced compensation for

growers. See, e.g., Steve W. Martinez, Vertical Coordi

nation in the Pork and Broiler Industries: Implica

tions for Pork and Chicken Products, FOOD AND RURAL

ECONOMICS DIVISION, ECONOMIC RESKARCH SERVICE,

U.S. Der’r OF AGRICULTURE, AGRICULTURAL IECONOMICS

Rerort No. 777 (1999). A preliminary study per-

formed by two USDA economists found that growers

with a single integrator in their area receive nearly

7% tess in fees than those growers with four or more

companies in their area. Nigel Key & James M.

McDonald, Local Monopsony Power in the Market for

Broilers? Hvidence from a Farm Survey at 2, Presented

at the Annual Meeting of the Agricultural and Ap-

plied Economics Association (July 27-29, 2008),

avatlable at http://ageconsearch.umn.edu/bitstream/

6073/2/sp08ke30. pdf,

6

Processor concentration has driven farmers from

the market in other meat markets. Secretary Vilsack

noted the number of hog farms has declined from

666,000 farms in 1980 to roughly one-tenth of that

today: 67,000, and the number of cattle farms de-

clined from 1.6 million to roughly 950,000 during this

same period, representing a loss of over 600,000

cattle farms in just the past three decades. Poultry

Workshop at 5.

As explained in a report of the American Anti-

trust’ Institute, the diminishing opportunities for

farmers and ranchers are due to a dramatic increase

in concentration at the processing level. AM. ANTI.

TRUST INS’T, THE Next ANTITRUST AGENDA, 290-305

(Albert A. Foer ed., 2068). This report documents the

critical lack of competition in numerous agriculture

processing markets and notes that the USDA failed to

fully implement the PSA’s enforcement provisions or

“make any effort to protect vulnerable growers from

exploitation.” /d. at 310. Relevant to this matter, the

report demonstrates that contracts forced upon

poultry producers often contain a variety of exploita-

tive and abusive conditions. /d.

The antitrust laws are often inadequate to police

abusive or harmful conduct by powerful buyers.

Harms from buyer power extend beyond direct effects

on “upstream” or “downstream” competition as tradi-

tionally understood in antitrust law. Buyers in a

highly concentrated market have great discretionary

power in markets where there are many sellers

2

(

and few buyers. See Peter Carstensen, Buyer I

wer»s,

Competition Policy, and Antitrust: The Competitive

Effects of Discrimination Among Suppliers, 53 ANTI

TRUST BULL. 271, 289 (2008). Discretionary power can

be used to harm individual producers by exclusion

from the market, discriminatory practices, or undue

favoritism. 7d. at 297-302. This is currently happen

ing in the broiler industry, where broiler processing

firms, such as Tyson Farms, can exercise their power

in an abusive manner because the localized nature of

the production complexes limit the integrators with

whom sellers can contract. Key & McDonald at 3.

Proper interpretation of the PSA is vital to pro-

tect farmers and ranchers from abusive and deceptive

I

practices of processors, especially in those markets

dominated by a few buyers. Many of these practices

in broiler markets, such as delayed weighing of

poultry, denying producers access to the weighing

process, delivering diseased poultry or misleading

representations may not rise to the level of an anti-

trust violation. Yet the purpose of the PSA was to

prevent these abusive practices by powerful buyers in

highly concentrated agricultural processing markets.

See William E. Rosales, Dethroning Economic Kings:

The Packers and Stockyards Act of 1921 and tts

Modern Awakening, 5 J. AGric. & Food INDUS. OrRG.,

Article 4 at 1-2 (2004).

As Congress recognized when the PSA was

enacted in 1921, the antitrust laws are inadequate

to protect farmers and ranchers from exploitation.

Since then the law has become clear that the anti-

trust laws require a showing that conduct harms the

‘SN

competitive process, not merely exploits market

power lawfully obtained. See Brunswick Corp. v.

Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489 (1977)

(citing Brown Shoe Co. v. United States, 370 U.S.

294, 320 (1962)). Moreover, even when competition is

adversely affected, it is sometimes extremely difficult

to prove. See AM. BAR Ass’N, ANTITRUST LAW DEVELOP.

MENTS 809-37 (6th ed. 2007) (describing the costs and

complexities of demonstrating an adverse effect on

competition under the antitrust laws). The PSA was

an explicit effort to protect farmers from the abuses of

the use of buyer power inherent in agricultural

markets where Congress deemed the antitrust laws

to be insufficient. See Michael C. Stumo & Douglas J.

O’Brien, Antitrust Unfairness vs. Equitable Unfair-

ness in Farmer/Meatpacher Relationships, 8 DRAKE J.

AGckic. L. 91, 98-94 (2008); see also Christopher M.

Bass, More than a Murror: the Packers and Stock-

yards Act, Antitrust Laws, and the Injury to Competi

tion Requirement, 12 DRAKE J. AGric. L. 423, 428

(2007) (discussing historical context in which the PSA

was adopted).

Il. THE PSA IS BROADER THAN THE SHER-

MAN AND CLAYTON ACTS

The primary purpose of the PSA is “to assure fair

competition and fair trade practices in_ livestock

marketing and in the meatpacking industry.” H.R.

Rep. No. 85-1048 (1957). When Congress passed the

PSA, it was primarily motivated to protect farmers

from abusive and deceptive practices by powerful

9

livestock buyers. Stumo & O’Brien at 91-92. The goal

was to enact a broad statute similar to Section 5 of

the Federal Trade Commission Act that would give

farmers and the USDA the power to challenge abu-

sive and unfair practices that could not be effectively

challenged under the Sherman and Clayton Acts.

Congress enacted the statute because the antitrust

statutes had failed to remedy the ongoing unfair and

deceptive conduct in the market. Rosales at 6-10;

Note, Challenging Concentration of Control in the

American Meat Industry, 117 HArv. L. Rev. 2643,

2657 (2004).

The PSA was intentionally designed to be broad-

er than its analogous antitrust laws, the Sherman

and Clayton Acts. See C. Robert Taylor, Buyer Power

Litigation in Agriculture: Pickett v. Tyson” Fresh

Meats, Inc., 53 ANTITRUST BULL. 455, 456-57 (“|The

PSA] was intended to go much further than the

Sherman and Clayton Acts to protect livestock

producers (the sellers) from various unfair and anti-

competitive practices by meatpackers (the buy-

ers)....”). The text of the statute itself states this

explicitly, noting that the private right of action

under the PSA: “shall not in any way abridge or alter

remedies now existing at common law or by statute,

but the provisions of this chapter are in addti-

tion to such remedies.” 7 U.S.C. § 209(b) (emphasis

added). This Court confirmed a broad construction of

this statute in Stafford v. Wallace, 258 U.S. 495, 514-

15 (1922):

10

The chief evil feared [by the PSA] is the mo-

nopoly of the packers, enabling them unduly

and arbitrarily to lower prices to the shipper,

who sells, and unduly and arbitrarily to in-

crease the price to the consumer, who

buys. ... Expenses incurred in the passage

through the stockyards necessarily reduce

the price received by the shipper, and in-

crease the price to be paid by the consumer.

If they be exorbitant or unreasonable, they

are an undue burden on the commerce which

the stockyards are intended to facilitate. Any

unjust or deceptive practice or combina-

tion that unduly and directly enhances

them is an unjust obstruction to that

commerce.

(emphasis added). More recent case law has con-

firmed the role of the PSA to combat a broad range of

unfair and anticompetitive practices. See United

States v. Perdue Farms, Inc., 680 F.2d 277, 280 (2d

Cir. 1982) (“As originally enacted in 1921, the purpose

of the [PSA] was to combat anticompetitive and

unfair practices.”) (emphasis added).

The Department of Justice in this case and in

earlier cases under the PSA agrees that Congress

intended for the PSA to cover practices that were not

violations of the antitrust laws and that it is inappro-

priate to require a showing of competitive harm. See

Brief for the United States of America as Amicus

Curiae Supporting Plaintiffs-Appellees at = 13,

Wheeler v. Pilgrim’s Pride Corp., 591 F.3d 355 (5th

Cir. 2009) (No. 07-4065 1).

1]

Il. THE SIXTH CIRCUIT MISCONSTRUED

THE PSA BY CONFLATING PSA STAN-

DARDS WITH ANTITRUST STANDARDS

USED UNDER THE SHERMAN AND CLAY-

TON ACTS

The PSA was enacted years after the Sherman

Act and the watershed moment in its jurisprudence,

Standard Oil Co. of New Jersey v. United States,

which interpreted section 1 of the Act to bar only

agreements that “unreasonably” restrain trade. 221

U.S. 1 (1911). The PSA’s broader nature was indeed a

direct response to the inability of the previous anti-

trust legislation to effectively curtail unfair or decep-

tive practices in the meatpacking industry:

(Slection 2 of the Clayton Act, section 5 of the

Kederal Trade Commission Act and the pro-

hibitions in the Sherman Anti-Trust Act were

not broad enough to meet the public needs as

to business practices of packers. Section

[192](a) and (b) was enacted for the purpose

of going further than prior legislation in the

prohibiting of certain trade practices which

Congress considered were not consonant

with the public interest.

Wilson & Co. v. Benson, 286 F.2d 891, 895 (7th Cir.

1961).

The Sixth Circuit below narrowly construed the

PSA to be consistent with the antitrust laws notwith-

standing that the statute was specifically designed to

broaden the scope of culpability where antitrust

legislation was too narrow. In holding that § 192(a)

12

and (b) require an anticompetitive effect, the court

conducted no independent analysis but rather relied

wholly on the supposed unanimity of the circuits

because “the rationale employed by our sister circuits

is well-reasoned and grounded on sound principles of

statutory construction.” Brief for Petitioner, App. 14a.

Without reviewing any of the relevant arguments, the

court followed the Fifth Circuit’s reasoning that

because “the purpose of the Packers and Stockyards

Act ... is to protect competition, ... only those prac-

tices that will likely affect competition adversely

violate the act.” 7d. at lla (quoting Wheeler v. Pil-

grim’s Pride Corp., 591 F.3d 355, 357 (5th Cir. 2009)

(en banc) (9-7 vote)).

However, the Fifth Circuit, and the other circuits

that have followed the same reasoning, are wrong;

among other things, they have ignored that this

Court expressly held with respect to Section 5 of the

Federal Trade Commission Act, a similarly broad

unfairness statute. Like the PSA, the FTC Act was

passed in order to supplement previous antitrust laws

by prohibiting a broader category of unfair and anti-

competitive practices: “Unfair methods of competition

in or affecting commerce, and unfair or deceptive acts

or practices in or affecting commerce, are hereby

declared unlawful.” 15 U.S.C. § 45(a)(1). In FTC v.

Sperry & Hutchinson, & Co., the FTC held that

Sperry had violated the FTC Act by attempting “to

suppress the operation of trading stamp exchanges.”

Sperry, 405 U.S. 233, 234 (1972). Sperry challenged

the holding and the Fifth Circuit agreed with Sperry

13

holding that the “FTC could halt only conduct that

violated either the letter or the spirit of the antitrust

laws.” /d. at 235. This Court however reversed that

holding and held that “unfair competitive practices

were not limited to those likely to have anticompeti-

tive consequences after the manner of the antitrust

laws; nor were unfair practices in commerce confined

to purely competitive behavior.” /d. at 244. See also

Been v. O.K. Indus. Inc., 495 F.3d 1217, 1240 (10th

Cir. 2007) (Hartz, J., concurring and dissenting)

(Discussing how the PSA is an “offspring of the FTC

Act” and broader than the antitrust laws.)

In Sperry, this Court faced the very issue posed

in this case — whether to graft on a requirement of

showing an adverse effect on competition on a broad

statute condemning unfair practices. This Court

rejected that proposition, holding that the FTC Act

proscribes “practices as unfair or deceptive in their

effect upon consumers regardless of their nature

or quality as competitive practices or their effect

on competition|.|” Sperry & Hutchinson, 405 U.S.

at 239 (emphasis added). There is no requirement of

effect on competition in the FTC Act because “[t]he

point where a method of competition becomes ‘unfair’

within the meaning of the |FTC] Act will often turn

on the exigencies of a particular situation, trade

practices, or the practical requirements of the busi-

ness in question.” FTC v. Motion Picture Adver. Co.,

344 U.S. 392, 396 (1953).

14

Like the FTC Act, the PSA proscribes acts that

would not be illegal under other antitrust legislation.

See Armour & Co. v. United States, 402 F.2d 712, 722

(7th Cir. 1968) (“[slection 202(a) [i.e., 192(a)} should

be read liberally enough to take care of the types of

anticompetitive practices properly deemed ‘unfair’ by

the Federal Trade Commission ... and also to reach

any of the special mischiefs and injuries inherent in

livestock and poultry traffic.”); see also Swift & Co. v

United States, 393 F.2d 247 (7th Cir. 1968); see also

Stumo & O’Brien at 93-97 (discussing the added

breadth o} the PSA in terms of micro [unfairness] and

macro [antitrust] effects). Thus, any requirement that

a plaintiff prove an adverse effect on competition is

inconsistent with the purposes of the statute.

IV. STATUTORY CONSTRUCTION RULES RE-

QUIRE A PLAIN READING OF §§ 192(a)

AND (b)

Courts should “resist reading words or elements

into a statute that do not appear on its face.” Bates v.

United States, 522 U.S. 23, 29 (1997). Resolving

statutory ambiguities without a solid textual anchor

makes a court’s “pronouncement([s] appear[ |] uncom-

fortably like legislation.” Antonin Scalia, The Rule of

Law as a Law of Rules, 56 U. Cui. L. Rev. 1175, 1185

(1989); see also Oncale v. Sundowner Offshore Servus.,

Inc., 523 U.S. 75, 79 (1998) (“it is ultimately the

provisions of our laws rather than the principal

concerns of our legislators by which we are gov-

erned.”). Justice Scalia’s reasoning is well supported:

15

“courts must presume that a legislature says in a

statute what .t means and means in a statute what it

says there.” Connecticut Nat'l Bank v. Germain, 503

U.S. 249, 253-54 (1992): see also Lamie v. U.S. Trus-

tee, 540 U.S. 526, 534 (2004) (“It is well established

that ‘when a statute’s language is plain, the sole

function of the courts — at least where the disposition

required by the text is not absurd — is to enforce it

according to its terms.’”).

“(Tihe starting point in any case involving the

meaning of a statute[] is the language of the statute

itself.” Group Life & Health Ins. Co. v. Royal Drug

Co., 440 U.S. 205, 210 (1979). The language at issue

here from the Packers and Stockyards Act, 7 U.S.C.

§§ 192(a)-(b), is unambiguous and clear:

It shall be unlawful ... for any live poultry

dealer with respect to live poultry to: (a) En-

gage in or use any unfair, unjustly discrimi-

natory, or deceptive practice or device; or (b)

Make or give any undue or unreasonable

preference or advantage to any particular

person or locality in any respect, or subject

any particular person or locality to any un-

due or unreasonable prejudice or disad

vantage in any respect.

7 U.S.C. § 192(a)-(b). Judge Garza in his dissent in

Wheeler correctly noted that neither Section 192(a) or

(b) contain language that would limit its application

only to acts that have an adverse effect on competi-

tion. Wheeler, 591 F.3d at 374 (Garza, J., dissenting).

16

Further, Congress did place language requiring

an adverse effect on competition in other subsections

of § 192, which is further evidence that no adverse

effect on competition is required in subsections (a)

and (b). See 7 U.S.C. § 192(c) (* ... if such apportion-

ment has the tendency or effect of restraining com-

merce or of creating a monopoly.”); 7 U.S.C. § 192(d) (“

. or with the effect of manipulating or controlling

prices, or of creating a monopoly ... or of restraining

commerce.”); 7 U.S.C. § 192(e) (“... or with the effect

of manipulating or controlling prices, or of creating a

monopoly ... or of restraining commerce.”). ““Where

Congress includes particular language in one section

of a statute but omits it in another section of the

same [alct, it is generally presumed that Congress

acts intentionally and purposely in the disparate

inclusion or exclusion.’” Russello v. United States, 464

U.S. 16, 23 (1983) (citation omitted); see also Wheeler,

591 F.3d at 374 (Garza, J. dissenting) (if Congress

intended to limit the scope of § 192(a)-(b) it would

have included language to do so).

The other opinions relied upon below ignored the

strict standards of statutory construction and at-

tempted to read into the PSA antitrust provisions

which simply are absent. For example, in Been, the

court found the PSA’s antitrust background as reason

to read a requirement of adverse effect on competi-

tion. Been at 1229. In London, the court reached the

same conclusion by relying on the PSA’s legislative

history, “antitrust ancestry,” and “policy considera-

tions.” London v. Fieldale Farms Corp., 410 F.3d

17

1295,1307 (11th Cir. 2005). Both decisions are incor-

rect as to the legislative intent, but in any case fall

into the trap Justice Scalia warns of above, and make

decisions “appear| | uncomfortably like legislation.”

Scalia at 1185.

Numerous district courts have followed the

instructions to rely on the plain language of the

statute. The Northern District of Iowa noted that:

“only a strained reading of the statute could require

that practices that are ‘unfair’ or ‘deceptive’ within

the meaning of § 192(a) must also be ‘monopolistic’ or

‘anticompetitive’ to be prohibited.” Kinkaid v. John

Morrell & Co., 321 F. Supp. 2d 1090, 1103 (N.D. Iowa

2004). See also Schumacher v. Tyson Fresh Meats,

Inc., 434 F. Supp. 2d 748, 754 (D.S.D. 2006) (“7 U.S.C.

§ 192(a)[] does not prohibit only those unfair and

deceptive practices which adversely affect competi-

tion.”); White v. Pilgrims’ Pride Corp., 2008 WL

4471656 (E.D. Tex. Sept. 29, 2008) (ruling that plain-

tiff need not prove an adverse effect on competition

under § 192(a)-(b)); Gerace v. Utica Veal Co., 580

F. Supp. 1465 (N.D.N.Y 1984) (dismissing argument

that § 192(a) required a showing of restraint on trade

or competition).

“(Congress] does not ... hide elephants in mouse

holes.” Whitman v. Am. Trucking Ass’ns, 531 U.S.

457, 468 (2001). By reading an adverse competitive

effect into sections 192(a)-(b), courts have spotted an

elephant in this mouse hole. This Court’s own prece-

dent is that courts cannot take the place of Congress

in deciding matters of policy. 7ennessee Valley Author

v. Hill, 4837 U.S. 153, 194-95 (1978)

Lt

CONCLUSION

We re spectfully reque t that the Cour

petition for a Writ of Certiorar!

Ke pectfully ubmitted

DAVID A. BALTO DAVID G. VELDI

General Counse!

NATIONAL FARMERS U

20 F St. NW. Suite 300

1) POOO!]

’ j )

( OUNSCI O} Record

application pending

LAW OFFICE OF DAVIDA

1350 1 St. NW, Suite 850 Washinvton, |

Was hington, DC 20005 102-554-1600

| 2 b{ () A274

App. ]

AMICI LIST

Alabama Contract Poultry Growers Association

Alaska Farmers Union

American Agriculture Movement

American Antitrust Institute

American Grassfed Association

California Farmers Union

Campaign for Contract Agriculture Reform (CCAR)

Center for Food Safety

Citizens for Private Property Rights (MO)

Colorado Independent Cattle Growers Association

Contract Poultry Growers Association of the Virginia

Farm and Ranch Freedom Alliance

Food & Water Watch

Hispanic Organizations Leadership Alliance:

Idaho Farmers Union

Illinois Farmers Union

Independent Beef Association of North Dakota

(I-BAND)

independent Cattlemen of Nebraska

Independent Cattlemen of Wyoming

Indiana Farmers Union

Institute for Agriculture and Trade Policy

mH .

App

lowa Farmers Union

Island Grown Initiative

Kansas Cattlemen’s Association K

Kansas Farmers Union

Michigan Farmers Union

Midwest Environmental Advocate

Mi l ippl Live tock Market \ ociatl

Mi Ou I il a) | }

National Cat! ¢c Rura le |

Nati il kami ar ‘ lil

N ti 1] Farmers Or t

Nati il Fa ( |

National La I IVa

New Kengland } iTmMet!l Ll) nio

Nortt ( oimMAa 4 mnt ici . { LI Ly ‘ I \ {

North Carolina Envi e Networ

Ohio karmers Uni

App Ky

Organization for Competitive Market

Pennypack Farm & Education Cente1

Powder River Basin Resource Council

R-CALF United Stockgrowers of America

Rural Advancement Foundation Internationa

USA (RAFI-USA)

South Dakota Stockgrower Associati

Texas Farmers Union

United Poultry Growers Asso

Utah Farmers Unior

Virginia Association for Biological I

Western Organizatior f Re irce ¢ V()]

Wisconsin Farmers Unio