Fifth Circuit Limits Application of Packers and Stockyards Act

A fractured Fifth Circuit Court of Appeals has determined that claims alleging violation of the Packers and Stockyards Act of 1921 must be supported by proof of injury, or likelihood of injury, to competition. Wheeler v. Pilgrim’s Pride Corp., No. 07-40651 (5th Cir., decided December 15, 2009). The issue arose from a complaint filed by certain poultry “growers,” alleging under the Act that another grower “was given a contract [with defendant] on preferable terms.” The district court and a Fifth Circuit panel concluded that the Act did not require a showing of adverse effect on competition and allowed the claims to proceed. The appeals court, in a 9-7 decision, reversed, finding the district court erred in denying defendant’s motion for summary judgment.

Four judges joined the majority opinion but authored a concurrence to more clearly discuss the statutory interpretation principles at issue in the case. The dissenting judges, relying on the “unambiguous language” of the law, would have found that sections 192 (a) and (b) “do not require a showing of competitive injury.”