Nine cattlemen have filed a $1 billion class-action lawsuit against Tyson Foods Inc., the nation's largest poultry processor, citing violations under the Racketeering Influence Corruption Order (RICO).
The plaintiffs allege that Tyson Foods gave former USDA Secretary Mike Espy and other agency officials $12,000 in illegal gratuities in "a pattern of racketeering activity" to win preferential treatment from USDA regulators. In December, Tyson Foods pled guilty to criminal charges brought by the federal government as part of an investigation into illegal activities involving Tyson and Espy.
The cattlemen's suit contends Tyson Foods and other poultry processors benefited from Tyson's alleged influence and "gained an unfair competitive advantage" that has cost cattle producers at least $1 billion since January 1993.
The suit claims Tyson's influence on Espy directly led to a more stringent inspection and regulation process for beef than for poultry. Primarily at issue is action taken in March 1993 when USDA decreed a "zero tolerance" policy against fecal matter on beef, then waited until July 1994 to set "a substantially less rigorous" policy for poultry.
Producers Strike Back Wayne Newton, Benton County, IA, cattle feeder, is an original plaintiff. "We monitor every load of cattle and saw our yields drop significantly in March and April of 1993 after the zero tolerance policy was passed," says Newton. "It became evident we were being put to a tougher test than anyone else.
"We decided as a group that it was time to put a line in the sand and say the government can't be bought. Our customers need assurances that all meat is safe," adds Newton.
Representing nine cattlemen from Iowa, Minnesota, Texas, Georgia and California, trial lawyer Wythe Willey filed the suit February 20 in U.S. District Court for the Northern District of Iowa on behalf of the U.S. beef industry. Willey, a commercial cattleman from Cedar Rapids, IA, also took the lead four years ago to force the USDA to eliminate water adding allowances for poultry. (See November 1997, BEEF).
If the court accepts the "class-action" status for the lawsuit, the list of plaintiffs could grow to 40,000 - the approximate number of producers and feeders who have marketed cattle since 1993. Newton believes several thousand of the country's beef producers will join the suit. "It's in their best interest to level the playing field," he says.
Under RICO guidelines plaintiffs who win cases citing racketeering violations or activities that predicate violations of the statute - such as bribery - are entitled to triple damages. Therefore, the claim that beef producers have lost $1 billion as a result of Tyson's actions could result in a $3 billion check to the U.S. beef industry to be split among all "classed" producers.
Cattle producers who have been damaged by the inequitable regulation between meat and poultry can add their name to the class-action lawsuit by contacting Wythe Willey at 319/365-5111, Wayne Newton at 800/472-0675 or Dave Nichols at 515/369-2829.
