Schumacher v. Tyson Fresh Meats, Inc.

2004 DSD 5, 221 F.R.D. 605, 2004 U.S. Dist. LEXIS 11666, 2004 WL 1368441
CourtDistrict Court, D. South Dakota
DecidedJune 7, 2004
DocketNo. CIV.02-1027
StatusPublished
Cited by13 cases

This text of 2004 DSD 5 (Schumacher v. Tyson Fresh Meats, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. South Dakota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Schumacher v. Tyson Fresh Meats, Inc., 2004 DSD 5, 221 F.R.D. 605, 2004 U.S. Dist. LEXIS 11666, 2004 WL 1368441 (D.S.D. 2004).

Opinion

ORDER

KORNMANN, District Judge.

BACKGROUND

[H1] Defendants are all packers who are in the business of purchasing cattle from cattle producers, slaughtering the cattle, and selling the carcass or parts thereof to wholesalers and retailers for consumption by the public. Defendants are the four largest packers in the United States and account' for 80% of the cattle purchased for slaughter in the nation. Much of the cattle purchased by the defendants is processed into what is known in the industry as “boxed beef.” Boxed beef consists of a package weighing approximately 78 pounds containing vacuum-sealed portions of beef. It is the primary product that packers sell to their customers.

[112] The prices received by beef packers for boxed beef are factors of some importance in determining the price packers pay cattle producers for fed cattle. On April 2, 2001, the United States Department of Agriculture (“USDA”) began collecting and publishing twice daily the boxed beef prices received by the packers, the collecting and [608]*608reporting having been required by the Livestock Mandatory Reporting Act of 1999 (“LMRA”), 7 U.S.C. §§ 1635-1636h. On May 14, 2001, USDA discovered that, due to its own faulty software (the “blame the computer syndrome”), USDA was incorrectly reporting to the public (including, of course, cattle producers) the prices of “choice” and “select” boxed beef because USDA erroneously included the price of lower valued “no-roll” in computing choice and select boxed beef prices. The result was that the publicly reported prices of choice and select boxed beef were substantially lower than the correct prices which had been duly reported to USDA by the packers.

[113] Plaintiffs filed this action against the four major packers alleging that, during the first six weeks that USDA began reporting boxed beef prices, defendants knowingly used the inaccurate prices published by USDA to negotiate the purchase of slaughter cattle from plaintiffs at prices substantially lower than would have been economically justified had plaintiffs known the accurate higher prices that defendants were receiving for their boxed beef. Plaintiffs contend that defendants’ conduct constituted an unfair or deceptive practice in violation of the Packers and Stockyards Act (“PSA”), 7 U.S.C. §§ 181-229. Plaintiffs also seek damages under common law unjust enrichment principles, alleging that cattle producers received many millions of dollars less than they would haye been entitled to demand from defendants during that approximate six week period of time.

[If 4] This matter is before the court on plaintiffs’ motion to certify this matter as a class action pursuant to Fed.R.Civ.P. 23. A rigorous analysis is required.

DECISION

Federal Rule Civil Procedure 23(a) permits class certification where:

(1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class.

Fed.R.Civ.P. 23(a); Alpern v. UtiliCorp United, Inc., 84 F.3d 1525, 1539 (8th Cir. 1996). The four prerequisites for class certification can be referred to as (1) numerosity, (2) commonality, (3) typicality, and (4) adequacy of representation. Paxton v. Union National Bank, 688 F.2d 552, 559 (8th Cir. 1982). “An action may be maintained as a class action only if all four prerequisites of Rule 23(a) are satisfied and, in addition, one of the three subsections of Rule 23(b) is met.” Pickett v. IBP, 197 F.R.D. 510, 513 (M.D.A1.2000). “The burden is on the party who seeks to certify a class to show that the prerequisites of Rule 23 are established.” Id.

(1) Numerosity.

[II5] Rule 23(a) requires that the class be “so numerous that joinder of all members is impracticable. Plaintiffs contend that there are thousands of putative class members who sold cattle to each of the defendants during the proposed class period.” A July 2, 2001, report to the Secretary of Agriculture from the Livestock Mandatory Price Reporting System Review Team (hereinafter “LMPR report”) (see Doc. 38) noted that in 2000, about 116 feedlots accounted for about 40% of feedlot cattle marketed while the rest of the 97,091 feedlots collectively accounted for the remaining 60% marketed. The report noted that 2.84 million feeder cattle were sold during the proposed class period. The report states in another section that, based upon Agricultural Marketing Service data, 3.211 million head of steers and heifers were marketed during those 6 weeks. Those figures are known to exclude auction barns and packers not required to report sales. About 26% of the sales during the proposed class period were direct sales.

[116] The report does not offer an estimate of the number of different producers who marketed cattle during the proposed class period. However, taking into account the LMPR report’s figures as to the number of feedlots marketing on an annual basis, one would expect the class to exceed 100 (I assume from common knowledge that major feedlots market at least monthly, not just [609]*609once a year) and possibly 1000 potential members. Tyson admits in its brief that it purchased cattle during the proposed class period from thousands of producers. There are no arbitrary rules regarding the necessary size of classes, Paxton, 688 F.2d at 559, but, clearly, the numerosity requirement is easily satisfied here.

[117] In addition to the size of the class, I may take into account “the nature of the action, the size of the individual claims, the inconvenience of trying individual suits, and any other factor relevant to the practicability of joining all the putative class members.” Paxton, 688 F.2d at 559-560. Producers who sold only 100 fed cattle at the target weight of 750 pounds would, taking into account a conservative $0.30 difference per cwt in price, see LMPR report, have allegedly received approximately $225 less as a result of the under reported boxed beef prices.1 Producers who sold fewer animals would have incurred an even smaller economic impact. Very few litigants would embark on expensive protracted litigation in the hope of recovering $225 or less.

[IT 8] I also believe that, because defendants purchase over 80% of the cattle in this country, individual cattle producers would have a disincentive to come forward and sue the defendants. Most cattle producers cannot risk losing their only buyers should defendants choose not to do business with them any longer.

(2) Commonality.

[119] While Rule 23(a) requires “questions of law or fact common to the class,” it “does not require that every question of law or fact be common to every member of the class.” Paxton, 688 F.2d at 561.

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Bluebook (online)
2004 DSD 5, 221 F.R.D. 605, 2004 U.S. Dist. LEXIS 11666, 2004 WL 1368441, Counsel Stack Legal Research, https://law.counselstack.com/opinion/schumacher-v-tyson-fresh-meats-inc-sdd-2004.