Chicago - A federal judge in Alabama denied a request by a group of 10 cattlemen to certify a class action suit against IBP claiming it colluded with other packers to control prices.
The Dakota City, Nebraska-based packer said that the ruling this week by Judge W. Harold Albritton in the suit filed in 1996 cited a lack of evidence to support the allegation.
"The Plaintiffs have failed to meet their burden in moving for class certification," said IBP, quoting the judge's ruling.
The action by the Montgomery, Alabama, judge means the plaintiffs can continue their legal actions individually but not as a group. The suit was filed July 10, 1996, by cattle growers or feeders from seven states who were members of The Cattlemen's Legal Fund of Amarillo, Texas.
The lawsuit alleged that IBP's practice of "formula" pricing of live cattle reduces open competition among packers and allows them to control prices in violation of the Packers and Stockyards Act of 1921. It asked the court to certify all cattle producers as a class so all could be represented in the case.
Formula pricing refers to an arrangement where a feedyard or producer agrees in advance to supply a packer with a set amount of cattle at a price based on a formula agreed.
Cattlemen say such "captive supply" arrangements by the top packers has created huge leverage for packers in bargaining down live cattle prices with nonformula suppliers.
One of the 10 plaintiffs, cattle feeder Mike Callicrate of St. Francis, Kansas, said that those filing the suit against IBP planned to continue their actions individually. Now that the class action request has been denied, he also expected more lawsuits by cattle producers and feeders against IBP.
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