Iowa Public Television


Cattleman Surprised With Tyson's $16K Legal Bill

posted on June 26, 2009

PIERRE, S.D. (AP) - Cattle rancher and auctioneer Herman Schumacher was surprised to find a sign posted on the door of his Herreid home saying he owes nearly $16,000 in legal fees to Tyson Fresh Foods.

The writ of execution from a federal judge was put on his door on June 11 because he owes legal expenses after losing a lawsuit he and two other cattlemen filed against Tyson and some other meatpackers that alleged the meatpackers violated federal law by intentionally manipulated or controlled prices.

Schumacher and his supporters argue that Tyson is seeking the $15,881 in retaliation because of the lawsuit.

"Basically, they're making an example out of me, you know, saying `We're the big guys, stay out of my way,'" Schumacher said.

In court documents, the meatpackers said the legal fees are required for at least a part of their expenses for fighting the lawsuit. U.S. District Court Judge Charles Kornmann of Aberdeen did not allow recovery of all the legal costs, saying the case dealt with issues never before decided in court and Tyson did not show that some expenses were reasonable.

Gary Mickelson of Tyson said Friday that the company is just seeking to recover the legal costs a judge ordered Schumacher to pay in December.

"This is simply a matter of someone refusing to pay a bill that was due more than six months ago," Mickelson said.

Schumacher said he's handled foreclosure and bankruptcy sales for 35 years as an auctioneer but has never seen signs posted like the ones now stuck to his door.

Schumacher said he believes the legal costs are unfair because the cattle ranchers won the case in a jury trial but lost in an appeal. Still, he acknowledges the bill is his responsibility and some people have volunteered to help him pay.

Tyson has no interest in taking Schumacher's home. The court simply put a lien on Schumacher's property until the debt is paid, Mickelson said.

"This matter demonstrates the consequences of taking unfounded claims to court. The plaintiffs tried to blame the packers for an unintentional market reporting mistake made by the USDA. Our company did nothing wrong, and the federal court system ultimately agreed," Mickelson said in an e-mail.

From April 2, 2001, to May 11, 2001, the U.S. Department of Agriculture misreported the boxed beef cutout prices for choice and select cuts of meat.

The lawsuit alleged that Tyson, Cargill Meat Solutions Corp. doing business as Excel Corp., Swift Beef Co., and National Beef Packing Co., knowingly used that erroneous information to pay cattle producers less than they would have paid if the prices had been correctly reported. The packers denied knowing about the faulty reports before the USDA acknowledged the error.

A jury awarded the cattle ranchers $9.25 million from four large meatpackers, but a three-judge panel of the 8th U.S. Circuit Court of Appeals overturned the verdict after finding that the ranchers failed to show the companies intentionally manipulated or controlled prices.

Schumacher's supporters and the media gathered at his home Friday to talk about the legal fees and the campaign to push Congress and the USDA to boost cattle prices by increasing competition in the market.

"My challenge to the producers out there is to keep up the fight. I believe in the American way, and I do believe if we stay focused, we'll win in the end," Schumacher said.

Cattle ranchers want the federal government to restore the competition because packers now drive prices paid to ranchers down by importing beef from other nations, using cattle owned by the packers themselves, and using cattle pledged to packers without a price being determined, said Bill Bullard, chief executive officer of R-CALF USA, a Billings, Mont.-based group that represents smaller independent producers.

Prices paid to farmers and ranchers are low, but people pay high prices for beef in grocery stores, Bullard said.

"It is clear evidence the system is broke and harming both cattle producers and beef consumers," he said.

Mickelson said Tyson values independent cattle producers and depends on them. Tyson does not own cattle until they are purchased for processing, he said.

Tags: agriculture animals beef cattle courts livestock meat news