Packers & Stockyards Act Claims

• Pages: 83-104

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CHAPTER III

PACKERS & STOCKYARDS ACT CLAIMS

A. Introduction

The Packers & Stockyards Act of 1921 (PSA or Act)1 seeks to

ensure fair business practices and competition in livestock, meat, and live

poultry markets. It does so by regulating numerous aspects of the

production, transfer, and slaughter of livestock and poultry and

proscribing specific categories of related conduct. The Act creates causes

of action for the U.S. Department of Agriculture (USDA) and private

parties, which allow the imposition of civil penalties, damages, and

injunctive relief for violations by regulated entities, including packers,

stockyards, poultry dealers, and swine contractors.

This chapter first provides an overview of the scope of the PSA,

including the types of regulated persons and proscribed conduct. Next, it

explores the administration and enforcement of the PSA by the USDA.

Finally, this chapter discusses the right to bring a private right of action

asserting violations of the PSA.

B. Regulated Persons

The PSA regulates packers, “stockyards,” live poultry dealers, swine

contractors, and “associated persons” such as market agencies and

dealers. The statute defines each term in detail.

In general, “packers” are persons that manufacture meats from

“livestock” (including beef and swine, but not poultry) or market such

products.2 “Stockyards” are generally persons that provide a forum for

the sale and transfer of livestock between owners and packers.3 A “live

poultry dealer” generally refers to any person that buys poultry for

slaughter, including companies that contract with others under a “poultry

1. Pub. L. No. 67-51, 42 Stat. 159 (codified at 7 U.S.C. §§ 181-229).

2. 7 U.S.C. §191.

3. 7 U.S.C. §202(a).

84 Agriculture and Food Handbook

growing arrangement.”4 Similarly, a “swine contractor” is generally a

person that contracts with others to produce swine.5

The statutory term “associated persons” includes any “market

agency” and any “dealer.” “Market agency” means “any person engaged

in the business of (1) buying or selling in commerce livestock on a

commission basis or (2) furnishing stockyard services.”6 The term

“dealer” means “any person, not a market agency, engaged in the

business of buying or selling in commerce livestock, either on his own

account or as the employee or agent of the vendor or purchaser.”7 Market

agencies or dealers may also be persons employed by stockyards and

packers.

C. Proscribed Conduct

The PSA “was enacted to prevent unfair practices, price fixing and

manipulation, and monopolization” by packers.8 The PSA proscribes

seven categories of “unlawful practices.”9 As will be discussed in further

detail, either the USDA or a private party may bring a cause of action for

alleged violations of the PSA.

Specifically, Section 202 makes it unlawful for regulated persons to

do any of the following:

a) “Engage in or use any unfair, unjustly discriminatory, or

deceptive practice or device;”10

4. 7 U.S.C. § 182(a)(10).

5. 7 U.S.C. § 182(a)(12).

6. 7 U.S.C. §201(c).

7. 7 U.S.C. §201(d).

8. Pickett v. Tyson Fresh Meats, 420 F.3d 1272, 1287 (11th Cir. 2005); see

also Wheeler v Pilgrim’s Pride Corp., 591 F.3d 355, 358 (5th Cir. 2009)

(en banc) (observing that the PSA’s objective was “to secure the flow of

livestock from the far ms and ranges to the sl aughtering cente r and into

meat products unburdene d by collusion that und uly lowered the pri ces to

the shipper and undul y increased the price to the consumer”) (citing

Stafford v. Wallace, 258 U.S. 495, 513 (1922)).

9. These practices are enumerated in 7 U.S.C. § 192, but the section is often

referred to as “Section 202,” which was the applicable section number in

the original PSA.

10. 7 U.S.C. § 192(a).