### F I LE D U. S . COURT OF AP PE ALS E LEVE NTH CI RCUI T A ugus t 16, 2005 T HOM AS K. KAHN C L E RK

Honora ble Richard Mills, United States District Judg e for the Central District of * I llinois , sitti ngby

designation. [ P UB L I S H] I N THE UN I TE D STATE S C OU RT OF APPE ALS F O R T H E E L E V E N T H C IR C U IT

________________________ N o. 04- 12137

________________________ D . C . D ocketN o. 96 -011 03 -C V -N H E N R Y L E E “L E R O Y ” P I C K E T T , M I K E C A L L I C R A T E , e t a l., P la in tif f s - A p p e lla n ts , ve r s us

T Y S O N F R E S H M E A T S , I N C ., D e f e n d a n t- A p p e lle e .

________________________ A pp ea l fr om the U ni t ed S t at es D i stri ctC ou rt f o rth e M i d d l e D i s tr i c to f A l a b a ma

_________________________ ( A u gu s t 16, 2005) B ef ore C A RN E S and C O X , C i rc ui tJudg es , and M IL L S , D i stri ctJudg e. *2

C A RN E S , C i rc ui tJudg e: H e nr y L e e P i c ke tti s the ow ne rof a c a tt l e - pr oduc i ng f

a r m l oc a t e d thi r ty - f

i ve m i l es south o f M on t go m ery, A l abam a. In thi s c l as s a ct i on l aw sui the i s the l ea d pl ai nt i ff re pres ent i ng a nat i on al cl as s of c att l e produ ce rs w ho se l l thei r f ed c a ttle

— c o w s r a is e d s p e c if ic a lly f o rs la u g h te r— to m e a t- p a c k in g p la n ts e x c lu s iv e ly o n th e c a s h m a r k e t. T y s on F r e s h M e a t s , I nc . , f or m e r l y I ow a B e e f

P r oc e s s or s , I nc . ( I B P ) , i s the la r g e s t m e a t- p a c k in g c o m p a n y in th e U n ite d S ta te s . I t p r o c e s s e s th ir ty - f iv e to f o r ty p e r c e n t o f

th e s te a k s , h a m b u r g e r s , a n d o th e rc o n s u m e rb e e f p r o d u c ts s o ld in rest au ran t s an d su p erm ark et s n at i o n w i d e. T yso n p u rch ases so m e cat t l e o n th e cash m a r ke tf r om pr oduc e r s l i ke P i c ke tt . S i nc e 1994 T y s on ha s a l s o pur c ha s e d a si gn i fi ca ntpo rt i on of i t s c att l e throu gh m arket i ng agre em ent s w i th catt l e produ ce rs in s te a d o f

f r o m th e c a s h m a r k e t. P i c ke ttc ont e nds tha tT y s on ha s us e d m a r ke t i ng a gr e e m e nt s t o de f l a t e the pr i c e of f e d c a tt l e on the c a s h m a r ke ta nd the m a r ke ta s a w hol e i n or de rt o r e ap the b e n e f its o f lo w e rp r ic e s . T o s to p T y s o n f r o m u s in g m a r k e tin g a g r e e m e n ts a n d to r e c o v e rf o rlo s s e s in c u rr e d f

r o m th e lo w e rp r ic e s th a t r e s u lte d o n th e c a s h m a r k e t, P i ckettsued T ys on . H e broug htthe l aw sui ton behal f of a l l ca sh m arketse l l er s c la im in g th a t T y s o n h a d e n g a g e d in u n f a irp r a c tic e s a n d m a n ip u la te d p r ic e s in v io la tio n o f

th e P a c k e r s a n d S to c k y a r d s A c t o f 1 9 2 1 , 7 U .S .C . § 1 8 1 e t s e q .3

T he i s s ue s thi s c a s e r a i s e s , a nd i t s pr oc e dur a l hi s t ory , a r e be s tunde r s t ood af t era di sc ussi on of the ca tt l e a nd m ea t -pac ki ng i nd ustri es and t he m arketw here th e y m e e t. I.

“ F e d c a tt l e ” a r e born, r a i s e d, a nd m a rke t e d e xc l us i ve l y f ors l a ught e r . T he p r o c e s s b e g in s w ith th e b ir th o f a c a lf o n a c a ttle - p r o d u c in g f a r m w h ic h e x is ts s ol e l y t o br e e d a nd r a i s e c a tt l e , f e e d the m , a nd the n s e l l the m t o m e a t - pa c ki ng pl ant s f or proces si ng i nt o b ee f produ ct s. T he fi rs t20 0 d ay s of aca l f’ s l i fe ar e s pe ntf e e di ng f r om he rm othe r . A f

t e rtha t , the c a l f

i s w e a ne d a nd s pe nds the ne xt 2 0 0 d a y s e a tin g f

e e d , g r a s s , o rw h e a t. A f te rth e c a lf

h a s b e e n f

e d f o r4 0 0 d a y s , th e p r o d u c e rs e n d s it a lo n g w ith a ll th e o th er cal v es b ei n g rai sed atth e sam e t i m e t o a feed yard . T h e feed yard i s a fa rm spec i fi ca l l y des i gn ed t o fee d the ca l ves i nt ensi vel y s o they are i n p ea k c o n d itio n w h e n s o ld to th e m e a t p a c k e r s . S o m e p r o d u c e r s h a v e f e e d y a r d s o n th e ir farm s, w h i l e o th ers sen d th ei r cal v es t o th i rd p arty feed yard s w h i ch n o to n l y fi n i sh fe ed in g th em b u t also b ro k erth e c attl e to th e m ea t p ac k er s o n th e p ro d u ce r’s behal f. A tthe f e e d y a r ds , e a c h c a l f

i s puti nt o a pe n w i th f

i f ty t o 200 othe rc a l ve s f

or the i nt e ns i ve f

e e di ng pr ogr a m , w hi c h us ua l l y l a s t s 120 da y s . W he n the f e e di ng prog ra m i s f

i ni shed, ea ch ani m al i deal l y w ei gh s 125 0 p ou nd s, the i nd ustry ’ s t ar get4

w e ig h t. O nc e the c a tt l e i n a pe n ha ve be e n f e d i nt e ns i ve l y f

or120 da y s , a nd ha ve hope f ul l y r e a c he d the t a r ge tw e i ght , the y m us tbe s ol d t o a m e a t - pa c ki ng pl a nt w i thi n tw o w ee ks. If

the fe d catt l e a re no tsol d w i thi n thatt i m e per i od , they b e c o m e to o e x p e n s iv e f o rth e f e e d y a r d to m a in ta in a n d a ls o b e c o m e le s s d e s ir a b le t o the m e a tpa c ke r s . T he y be c om e t oo e xpe ns i ve be c a us e c a tt l e ga i n us a bl e w e i ght m or e s l ow l y a f

t e rr e a c hi ng 1250 pounds a nd e ve ntua l l y s t op ga i ni ng i ta ta l l , but the y s t i l l m us tbe f

e d. T he y be c om e l e s s de s i r a bl e t o m e a tpa c ke r s be c a us e the c a tt l e s t a r tt o ga i n m or e f a ta nd the m a r ke ti s f

orm e a tnotf

a t . T he poi nti s tha tthe tw o- w e e k w i ndow f

ors e l l i ng f

e d c a tt l e a f

t e rthe y ha ve be e n a ta f e e d y a r d f

or120 da y s i s c r i t i c a l t o the pr oduc e r s , the f e e d y a r ds , a nd the m e a tpa c ke r s . ( F ore a s e of r e f e r e nc e , f r om thi s poi nton w e w i l l r e f e rt o f e d c a tt l e a s s i m pl y “ c a tt l e , ” e xc e pt w here qu ot i ng . ) O n c e a m e a t p a c k e rp u r c h a s e s a p e n o f c a ttle , it h a s th o s e c a ttle h a u le d to its f a c t ory a nd s l a ught e r s the m . T he pa c ke rthe n pr oc e s s e s the c a r c a s s e s i nt o di f f e r e nt c ut s of m e a t( e . g. , ha m bur ge r , N e w Y or k s tr i p, a nd f i l e tm i gnon) , pa c ka ge s the d i fferen tcu t s, an d sel l s th em t o m eatw h o l esal ers, rest au ran t s, an d g ro cery st o res. T he process w e have desc ri bed h as been used t o p re pare ca tt l e f or the m arket si n ce p ack ers b eg an b u yi n g p en s o f cat t l e d i rect l y fro m p ro d u cers o n th e cash m arketabou tsi xty y ea rs ago. (B ef ore that , the bu yi ng and sel l i ng of ca tt l e w as5

done thr ough a ge nt s a ts t oc ky a r ds i n m a j orc i t i e s i n the M i dw e s tw i th C hi c a go b e in g th e la r g e s t.) D u r in g a ll b u t th e la s t d e c a d e o rs o , p a c k e r s p u r c h a s e d c a ttle a lm o s t e x c lu s iv e ly th r o u g h th e c a s h m a r k e t. T hi s i s how the c a s h m a r ke tw or ks . B uy e r s f r om the m e a t - pa c ki ng c om pa ni e s s pr e a d outa r ound the c ountry t o the di f f e r e ntf e e d y a r ds a nd i ns pe c tthe pe ns of c a tt l e tha ta r e r e a dy t o be s ol d. I f the buy e rl i ke s the c a tt l e i n a pe n, he m a k e s a n o f

f e rto th e p r o d u c e ro rf

e e d y a r d o p e r a to r . T h e p r o d u c e ro ro p e r a to ris fr ee t o acc eptor re

j ec tthe packer’ s off

er ; i n d ec i di ng w hether t o d o so, he oft en c ons i de r s of

f e r s be i ng m a de f

orothe rpe ns of

c a tt l e a r ound the c ountry . ( M uc h of th is in f o r m a tio n is r e la y e d o v e rth e te le p h o n e f r o m o n e p r o d u c e ro ro p e r a to rto a nothe r . ) O f

t e n, the pr oduc e rorf

e e d y a r d ope r a t ora nd the buy e rf r om the pa c ki ng pl anthagg l e over the pri ce . If they e ventual l y a gree on a pri ce , the ca tt l e i n the pen a r e de l i ve r e d t o the pa c ki ng pl a nts e ve n da y s f r om the da t e of

the a gr e e m e nton pri ce . T he pri ce the packer pai d for the pen o f c att l e i s r eport ed t o a ce ntra l offi ce a n d a v e r a g e p r ic e s a r e p u b lis h e d e a c h w e e k . In the m i d-19 80 s anu m ber of c att l e produ ce rs began l oo ki ng for anew me th o d o f

ma r k e t i n g th e i rc a tt l e t o p a c k e r s , o n e th a td i d n o tr e q u i r e a s mu c h t i me a nd ha s s l e a s ne got i a t i ng e ve ry pe n of c a tt l e on the c a s h m a r ke t . T he y c a m e up w i th m a r ke t i ng a gr e e m e nt s a nd e ve ntua l l y pe r s ua de d the pa c ke r s , i nc l udi ng T y s on, t o be gi n us i ng thos e a gr e e m e nt s f ors om e of

the i rpur c ha s e s . T he us e of m a r ke t i ngTh ere c ord re fl e c ts that f ro m 19 94 to 2 00 2 Tyso n h a d p urc ha se d a ny wh e refrom t

wenty 1 to fifty perc ent of its cattle supply through marke ting agreements.

6 a gr e e m e nt s s pr e a d s l ow l y thr oughoutthe i ndus try a tf i r s tbutbe ga n t o pi c k up s t e a m i n the 1990s . B y 1994 T y s on, a m ong othe r s , w a s us i ng m a r ke t i ng a gr e e m e nt s t o pr oc ur e a s ubs t a nt i a l pa r tof the c a tt l e i tne e de d. 1 U nde rthe ty pi c a l m a r ke t i ng a gr e e m e nt , a f e e d y a r d ope r a t orw i l l c a l l a nd t e l l the m e a tpa c ke r ’ s buy e rtha the ha s a pe n of c a tt l e a ti t s pe a k a nd r e a dy t o be s ol d. T he f

e e d y a r d ope r a t orpr om i s e s t o ha ve the c a tt l e de l i ve r e d t o the f a c t or y f or s l a ught e rw i thi n tw o w e e ks , w i th the pa c ke rge tt i ng t o pi c k the e xa c tda t e of de l i ve ry w i thi n tha ttw o- w e e k pe r i od. T he pr i c e pa i d f orthe c a tt l e unde rthe m arket i ng agre em enti s pegged atthe pu bl i cl y r el ea se d average c as h-m arketpri ce f o rth e w e e k p r io rto w h e n th e a g r e e m e n t is m a d e . T h e a g r e e m e n t c o m m o n ly p r o v i d e s th a ta f

t e rth e c a tt l e a r e p r o c e s s e d th e p r i c e wi l l b e a d j u s t e d u p o rd o wn ba s e d on the qua l i ty orthe y i e l d of the c a r c a s s e s . T he a dj us tm e nti s qui c kl y a nd e a s ily c a lc u la te d b y T y s o n a s m a tte ro f c o u r s e in p r o c e s s in g th e c a ttle . T o su m m ari ze, th e d i fferen ce i s th atw i th m ark et i n g ag reem en t s, u n l i k e cash m a r ke tpur c ha s e s , the pr i c e i s s e tnotthr ough bi ddi ng buta ut om a t i c a l l y a tthe c a s hm arketpri ce the w ee k b ef ore the agree m enti s m ade, the pri ce i s usual l y a dj ust ed base d o n p ost -s l augh t erqu al i ty or y i el d, and t he packer pi cks the ac tual del i very d a te w ith in th e tw o - w e e k p e r io d th a t b e g in s w h e n th e a g r e e m e n t is m a d e .Th ec la ss P ic ke tt repre sentswa s initi ally c e rtif ie d a s all c attl eprod

uc e rswh o s old

c attl e 2 on the ca sh market to Tyson, including those who also sold cattle to Tyson through marke ting agre ements . Werevers e d this initial c la ss c e rtif ic atio n a ft e r de c idingthat Pic ke tt, wh o s old cattle to Tyson exclusively on the ca sh market a

nd was c halleng ing theleg ality of the mar

keting agre ements , c ould n ot ade qu ate ly and fairly repre sent t

heint e re sts of

prod uc e rswh o h a d s old cattle to Tyson through both the cash ma rket a nd marke ting agreements. Pickett v. I owa B eef Processors, 209 F .3d 1276, 1280–81 (11th Cir. 2000). On remand, the cla ss definition was re s tric te d toc attlep ro d

u c e r s wh o s o ld

c attletoT ys o ne xc lu s iv e ly o nth ec a s hma

r k e t. We denied Tyson permission to appeal this second c lass cer tification. I owa B eef

Processors, Inc. v. Pickett, No. 02-90002 (11th Cir. Mar 5, 2002) . It is thi s narrower class that Pickett represents. In his complaint, Pi ckett claims that Ty son violated the Packers and Stockyards Ac t 3 through the use of c aptive supply arrang ements. “Captive supply” is Pickett’s pejorative term for Tyson’s procurement of c attle through either of two methods for purchasingcattle outside the c a s hm ar k e t : m ar k e t i n gagre e m e nt s an d

f o r w ard c o ntra c t s . T h ep art i e s agre eth atT ys o nb uys only about threeperc ent of its cattle through forwa rd contracts, which is too littl e to haveany e ff e c t on thec a shmarke t pric e . F or that re a so n, thebrie fse ssenti ally igno refo rw ard

c ontra c ts, and wewi ll t oo . M arke tingagre e mentsa c c ount f or a signif ic ant a mou nt o f Tyso n’ s c attl e purcha se s, e no ugh toa ff

e c t pric e , a

nd fo r t hat re a so n th e y

arethefo c us of

thebrie fsand

thi s op ini on . Wewi ll n ot b ere ferringto m arke tingagre e mentsa s “ c a ptivesu pp ly”arrang e ments beca use, as the district c ourt pointed out, the term is a misnomer. Under marketing agreements, a producer’s c attle is captive f or no more tha

n two weeks. Pickett v. Tyson Fre sh Meats, Inc., 315 F . Su pp . 2 d 1 17 2, 11 75 n. 1 ( M. D. Al a . 2 00 4) . M ore ov e r, “ c a ptive ”me ans no thingmorein t his c onte xt tha

n th at Tyso n h a s a

c ontra c tual right to d e liv e ry of thec attl ein e xch ang efo r which it must pay the purc hase price. It would be as de scriptive to re fer to these cattle as “c ontrac tual supply .” 7 II. P i c ke tt , a nd the c l a s s m e m be r s he r e pr e s e nt s , s e l l the i rc a tt l e e xc l us i ve l y on the ca sh m arket . T hey c l ai m thatthrou gh m arket i ng agre em ent s T ys on has bee n 2 abl e t o m ani pu l at e the pri ce of ca tt l e on t he ca sh m arket . T ys on i s the l ar gestm ea t 3 pa c ke ri n the c ountry . I tpr oc e s s e s f or ty pe r c e ntof

a l l ha m bur ge r s a nd s t e a ks on A m er i ca n d i nn ert abl es . T ys on sl augh t er s 10 m i l l i on ca tt l e e ac h yea r, near l y oneha l f of the 25 m i l l i on c a tt l e tha ta r e pur c ha s e d a nd s l a ught e r e d by m e a t - pa c ki ng p la n ts in th is c o u n try .8

P i c ke tt ’ s the ory i s tha tT y s on ha s us e d m a r ke t i ng a gr e e m e nt s a nd i t s l a r ge m a r ke ts ha r e t o a r t i f

i c i a l l y r e duc e pr i c e s on the c a s h m a r ke t . P r i c e s f orc a tt l e on the c a s h m a r ke ta r e r e s pons i ve t o s uppl y a nd de m a nd. P i c ke ttc l a i m s tha tby us i ng m a r ke t i ng a gr e e m e nt s T y s on ha s w i thdr a w n a l a r ge a m ountof de m a nd f

r om the c a s h m a r k e t, th e r e b y s u b s ta n tia lly d e c r e a s in g p r ic e p r e s s u r e th e r e . T h e r e s u lt, in P i ckett ’ s vi ew , i s thatprod ucer s s el l i ng on the ca sh m arkethave go tt en a l ow er p r ic e f o rth e irc a ttle . A r e d u c e d c a s h - m a r k e t p r ic e b e n e f its T y s o n in tw o w a y s . F i rs t , T ys on i s abl e t o o bt ai n the ca tt l e thati tst i l l pu rc hase s on the ca sh m arket ( m i l l i ons of

he a d e a c h y e a r ) a ta l ow e rpr i c e . S e c ond, be c a us e the pr i c e T y s on p a y s f o rm a r k e tin g a g r e e m e n t c a ttle is p e g g e d to th e a v e r a g e c a s h - m a r k e t p r ic e , it p a y s le s s f

o rth o s e c a ttle to o . A c c or di ng t o P i c ke tt , the l ow e rpr i c e s tha tT y s on pa y s f orc a tt l e a r e nota n u n i n t en d ed co n seq u en ce o f i t s h eav y u se o f m ark et i n g ag reem en t s t o p u rch ase m uc h of i t s ne e ds . T o the c ontr a ry , P i c ke tta l l e ge s tha tthos e l ow e rpr i c e s a r e the pr i m a ry , i nt e nde d c ons e que nc e of m a r ke t i ng a gr e e m e nt s . H e c l a i m s tha ta c hi e vi ng l ow e rpr i c e s i n tha tm a nne rc ons t i tut e s a n unf a i rpr a c t i c e a nd the m a ni pul a t i on of p r ic e s in v io la tio n o f

th e P a c k e r s a n d S to c k y a r d s A c t. T he c a s e w a s tr i e d f

orf ourw e e ks . B e f

or e the c a s e w a s s ubm i tt e d t o the j u ry , Ty s o n mo v e d th e d i s tr i c tc o u r tf o rj u d g me n ta s a ma tt e ro f l a w u n d e rFe d . R. C i v. P . 50( a ) . T he m ot i on a s s e r t e d, a m ong othe rgr ounds , tha tT y s on ha d pr ove n aWe have substituted “mar ketingagreement” for

the term “ captive supply” in the verdict 4 form. See a

nte, at 7 n.3. 9 nu m ber of c om pet i t i ve j ust i fi ca t i on s f or usi ng m arket i ng agre em ent s, the fa ctual ex i st en ce o f w h i ch w ere n o td i sp u t ed b y an y ev i d en ce. T h e d i stri ctco u rtal m o st grant ed T ys on ’ s R ul e 50(a) m ot i on , ob se rvi ng thatP i cketthad p re se nt ed “ a very th in c a s e ,” b u t it d e c id e d to r e s e r v e ru lin g o n th e m o tio n to s e e w h a t th e ju ry w o u ld do . T he di stri ctcourtexpl ai ned t hatgrant i ng the m ot i on before the j ury ver di ct ri sked havi ng t o re- do the w ho l e tri al i f the appel l at e c ou rtdi sa gree d, and a retri al w o u ld b e lo n g a n d c o s tly . T h e j u ry’ s “ v erd i ct ” co n si st ed o f an sw ers t o a n u m b er o f i n t erro g at o ri es. S peci fi ca l l y, the j ury w as as ked— “ ye s” or “ no ”— w hether i tfoun d, by a prepon dera nce of the evi dence: 1. T hatthere i s anat i on w i de m arketfor f ed ca tt l e? 2 . T h a t th e d e f

e n d a n t’s u s e o f

[ m a r k e tin g a g r e e m e n ts ] h a d a n a n ticom pet i t i ve ef

fe cton the ca sh m arketfor f ed ca tt l e? 3. T ha tthe de f

e nda ntl a c ke d a l e gi t i m a t e bus i ne s s r e a s on orc om pe t i t i ve ju stificatio n fo r u sin g [m ar k etin g ag re em en ts]? 4 . T h a t th e d e f

e n d a n t’s u s e o f

[ m a r k e tin g a g r e e m e n ts ] p r o x im a te ly c a us e d the c a s h m a r ke tpr i c e t o be l ow e rtha n i tothe rw i s e w oul d ha ve be e n? 5. T ha tthe de f

e nda nt ’ s us e of

[ m a r ke t i ng a gr e e m e nt s ] i nj ur e d e a c h a nd ev ery m em b er o f th e p l ai n t i ffs’ cl ass? 4 T h e ju ry a n s w e r e d “y e s ” to e a c h o f th o s e f iv e q u e s tio n s . T h e v erd i ctfo rm i n stru ct ed th e j u ry th at , i f i td i d an sw er “ yes” t o al l o f th o se q u est i o n s, i tsh o u l d an sw er th ese ad d i t i o n al q u est i o n s:Be foresubmitt ing thequestions to the jury , the district court had made c lear to the 5 parties that even if it entered a judgment for Pickett and theclass, it had no intention of usingas the amount of damag es the jury ’s answer to question number 6: “I ’m not—and no matter what verdic t this j ury

comes back with, I ’m not g oing to enter a judgment on that number if they bring one in bec ause what we’ re talking a bout hereincludes peoplewho are not member s of the cla ss.” The c ourt’s point was that the a mount of reduc tion in the cash market price of cattle wa s too broad a me a sureof

damag e s, be c a

us eit inc lude d th os ewh o s old so mec attl eoutsi dethec a sh marke t, and those produc ers were not in the c lass. Be forewe g et into the merits of the issues raised in this appeal, there is a proc edural 6 iss ueari singfrom t

hejur y verdic t f or m th at w ene e d toa dd

re ss. Th efo rm

is unu su al be c a

us eit did no t a sk thejur y to re tur n a g e neral verdic t and

thejur y did no t re tur n o ne , even th ough it answered all of the interrog atories in fa vor of Pickett. A que stion arose at oral argument about whether an order grantingRule 50(b) re lief properly may be entered wheretherehas been no g eneral verdict for e ither par ty . Cf. Fe d. R. Civ. P . 49(a) ; Mason v. Ford Motor Co., 307 F.3d 1271, 1274 (11th Cir. 2002) (“ When Rule 49(a) is employed, the jury makes spec ific factual 10 6. W ha ta m ount , i f

a ny , do y ou f

i nd tha tde f

e nda nt ’ s us e of

[ m a r ke t i ng a gr e e m e nt s ] da m a ge d the c a s h m a r ke tpr i c e of f e d c a tt l e s ol d t o [ the defe nd ant ] du ri ng the peri od fr om F ebruary1, 19 94 , throu gh O ct ob er 31, 2002? 7 . D i d th e d efen d an t ’ s u se o f [m ark et i n g ag reem en t s] d ep ress th e cash m arketpri ce for f

ed ca tt l e purchas ed by [the defendant ] by an equal pe r c e nt a ge f

ore a c h y e a rof

the c l a s s pe r i od? I f

y oura ns w e ri s y e s , by wh a tp e r c e n t ? T he j ury w rot e “ $1 , 28 1, 69 0, 00 0. 00 ” i n the qu es t i on nu m ber 6 bl ank. Itansw er ed 5 qu es t i on nu m ber 7 “ no . ” F ol l ow i ng the verdi ctthe di stri ctcourtgrant ed T ys on ’ s R ul e 50(b) renew ed m o tio n f o rju d g m e n t a s a m a tte ro f la w , ru lin g “th a t [ P ic k e tt’s ] e v id e n c e is i n su ffi ci en tt o su p p o rta fi n d i n g th at[T yso n ] l ack ed a l eg i t i m at e b u si n ess j u st i fi cat i o n fo r i t s u se o f [m ark et i n g ag reem en t s] . ” P i ck ettv . T yso n F resh M eat s, I nc . , 315 F . S upp. 2d 1172, 1175 ( M . D . A l a . 2004) . I te nt e r e d f i na l j udgm e ntf

or T y s o n . T h is is P ic k e tt’s ap p e a l f r o m th a t ju d g m e n t. 6finding s; and the judg e make s the ultimate leg al conc lusions based on those facts.”).

The a nswer is found in Rule 50(b) (2)( B) , which provide s that “if no verdict was returne d” by

the jury, the district court is authorized to “dire ct entry of judgment as a matter of law” on a renewed motion for it. Fe d. R. Civ. P . 50(b)( 2)(B ). This result make s sense. I f the evidenc e that the plaintiff presente d at trial is insufficient for the jury rea sonably

to return a verdic t f or theplaintif

f, thede fendant i s entitle d tojudgment re g ardle ss o f whe ther t hejur y did return a verdic t. The absence of

a verdict in these circumstances is not materially different from the situation wherethe district court grants a de fenda nt’s motion for judgment as a matter of law before the c ase is submitted to the jury , which is authorized under Rule 50(a) . 11 III. We r e v i e w d e n o v o a d i s tr i c tc o u rt ’ s g r a n to f j u d g m e n ta s a m a tt e ro f l a w, appl y i ng the s a m e s t a nda r d a s the di s tr i c tc our t . C l e ve l a nd v. H om e S hoppi ng N e tw or k, I nc . , 369 F . 3d 1189, 1192 ( 11th C i r . 2004) . A di s tr i c tc our ts houl d gr a nt j udgm e nta s a m a tt e rof l a w w he n the pl a i nt i f

f pr e s e nt s no l e ga l l y s uf

f i c i e nt e v id e n tia ry b a s is f

o ra r e a s o n a b le ju ry to f in d f o rh im o n a m a te r ia l e le m e n t o f h is c a us e of a c t i on. I d. T he c our ts houl d de ny i ti f the pl a i nt i f

f pr e s e nt s e nough e vi de nc e t o c r e a t e a s ubs t a nt i a l c onf l i c ti n the e vi de nc e on a n e s s e nt i a l e l e m e ntof th e p la in tif

f’s c a s e . W a tk in s v . S v e r d ru p T e c h ., I n c ., 1 5 3 F .3 d 1 3 0 8 , 1 3 1 3 ( 1 1 th C i r . 1998) ; B ogl e v. O r a nge C ounty B d. of C ounty C om m ’ r s , 162 F . 3d 653, 659 (1 1 th C i r. 1 9 9 8 ) (“ [I] n o rd er t o su rv i v e a d efen d an t ’ s m o t i o n fo r j u d g m en tas a m a tte ro f la w . . . th e p la in tif

f m u s t p r e s e n t e v id e n c e th a t w o u ld p e r m it a r e a s ona bl e j ury t o f

i nd i n the pl a i nt i f

f’ s f a voron e a c h a nd e ve ry e l e m e ntof the cl ai m . ”) . A.12

P i c ke tta nd hi s f

e l l ow c l a s s m e m be r s c ont e nd tha tT y s on’ s m a r ke t i ng a gr e e m e nt s vi ol a t e d the P a c ke r s a nd S t oc ky a r ds A c t . T he r e l e va nts e c t i ons of the P S A m a k e it: u n l aw fu l fo r an y p ack er o r sw i n e co n tract o r w i th resp ectt o l i v est o ck , m eat s, m e a tf ood pr oduc t s , orl i ve s t oc k pr oduc t s i n unm a nuf a c tur e d f or m , orf or a n y liv e p o u ltry d e a le rw ith r e s p e c t to liv e p o u ltry , to : ( a ) E nga ge i n orus e a ny unf a i r , unj us t l y di s c r i m i na t or y , orde c e pt i ve p r a c tic e o rd e v ic e ; o r. . . ( e ) E nga ge i n a ny c our s e of bus i ne s s ordo a ny a c tf orthe purpos e or w i th the e f

f e c tof m a ni pul a t i ng orc ontr ol l i ng pr i c e s , orof c r e a t i ng a m onopol y i n the a c qui s i t i on of , buy i ng, s e l l i ng, orde a l i ng i n, a ny a r tic le , o ro f

r e s tr a in in g c o m m e r c e . . . . P ac kers and S t ockyar ds A ct§ 2 02 (a ), (e ), 7 U . S . C . § 1 92 (a ), (e ). I t is u n d is p u te d th a t T y s o n is a m e a t p a c k e ra n d th a t th e P S A ap p lie s to its bu si ness . T he di sput e i s over w hati s a n “ un fa i r” prac t i ce and w hatconst i tut es

“ any a ctfor the pu rpose or w i th the ef fe ctof m ani pu l at i ng or cont rol l i ng pri ce s. ” P i c ke ttc ont e nds he ha s e s t a bl i s he d unf a i rne s s a nd pr i c e c ontr ol orm a ni pul a t i on unde rthe P S A by pr ovi ng tha tT y s on’ s m a r ke t i ng a gr e e m e nt s c a us e d the c a s hm ark etp ri ce, an d th e o v eral l m ark etp ri ce, fo r cat t l e t o b e l o w er th an i to th erw i se w o u l d b e. If th atw ere al l P i ck ettw ere req u i red t o p ro v e h e m i g h tw i n , b ecau se the r e w a s e vi de nc e a ttr i a l t o s uppor tthe j ur y ’ s f i ndi ng tha tthe us e of

m a r ke t i ng a gr e e m e nt s ha s r e s ul t e d i n l ow e rpr i c e s f orc a tt l e both on the c a s h m a r ke ta nd theWe say that Pickett “might win”beca use the c ritical evidence that the use of mar keting 7 agreements cause d lower prices in the mar kets was the te stimony

of Profe ssor Tay

lor, an e xpert wi tne ss f or Pic ke tt, and

thereareDa

ub e rt iss ue s invo lvinghiste stimony . Se eDa ub e rt v. Merre ll Dow Pharms., Inc., 509 U.S. 579, 113 S. Ct. 2786 (1993). The existence a nd seriousness of those issues arepartly

ref lected in the district c ourt judg e’s c omment that if he were the fac tfinder, “ I ’d say, Dr. Ta ylor, you’renuts.” Given the ba sis of our dec ision to affirm the district court’s judgment on grounds independent of any Daubert issues, we c an assume f or pre sent pur

po se s th at Tyso n’ s u seof marke tingagre e mentsdid le a d tolow e r p ri c e s in

thec attl e marke ts. 13 m arketas a w ho l e. 7 T y s on, of

c our s e , ur ge s a c ontr a ry r e a di ng of the P S A . I tt a ke s the pos i t i on thatbecause the P S A w as m ea ntas a prot ec t i on agai nstant i -c om pet i t i ve pract i ce s by m e a tpa c ke r s , P i c ke ttm us te s t a bl i s h m or e tha n tha tthe us e of m a r ke t i ng agre em ent s have decr ea se d the pri ce for c att l e. H e m ustes t abl i sh thatthei r use has a d v e r s e ly a f

f e c te d c o m p e titio n , w h ic h r e q u ir e s s h o w in g th a t m a r k e tin g a g r e e m e n ts h a v e n o p r o - c o m p e titiv e ju s tif ic a tio n s . T h e d is tr ic t c o u r t r e s o lv e d th is is s u e in T y s o n ’s f a v o r . A f te rit d id s o , th is C o u r t r e s o lv e d th e m e a n in g o f “u n f a ir ” p r a c tic e in P S A § 2 0 2 ( a ) in th e s a m e w a y . In L on do n v . F i el dal e F arm s C orp. , 41 0 F . 3d 12 95 (11t h C i r. 20 05 ), w e hel d that

“ i n or de rt o s uc c e e d on a c l a i m unde rthe P S A , a pl a i nt i f f m us ts how tha tthe d e f e n d a n t’s u n f

a ir , d is c r im in a to ry o rd e c e p tiv e p r a c tic e a d v e r s e ly a f f e c ts o ris lik e ly to a d v e r s e ly a f

f e c t c o m p e titio n .” I d . a t 1 3 0 3 . T h is , w e e x p la in e d , is c o n s is te n t w ith th e p u rp o s e a n d in te n t b e h in d th e P S A . “A t th e tim e o f e n a c tm e n t, the c hi e f e vi l C ongr e s s f

e a r e d w a s the m onopol y of the pa c ke r s . ” I d. a t130214

( c itin g S ta f

f o r d v . W a lla c e , 2 5 8 U .S . 4 9 5 , 5 1 4

– 1 5 , 4 2 S . C t. 3 9 7 , 4 0 1 ( 1 9 2 2 ) ) .

“ T he pr i m a ry purpos e of the P S A w a s ‘ t o a s s ur e f a i rc om pe t i t i on a nd f

a i rtr a de pr a c t i c e s i n l i ve s t oc k m a r ke t i ng a nd i n the m e a tpa c ki ng i ndus try . ’ ” I d. ( quot i ng H . R . R ep . N o . 8 5 -1 0 4 8 , at1 (1 9 5 8 )). Itw as ai m ed ath al t i n g p ract i ces w h o se p u rp o s e w a s to d e s tr o y c o m p e titio n . I d . T h e L o n d o n d e c is io n s e ttle s in th is c ir c u it th a t b y “u n f

a ir ” p r a c tic e , P S A § 2 0 2 ( a ) m e a n s a p r a c tic e th a t d o e s o ris lik e ly to a d v e r s e l y a f

f e c tc o m p e t i t i o n . I d . a t1 3 0 3 ; s e e a l s o Ad k i n s v . C a g l e F o o d s J V, L L C , 4 1 1 F .3 d 1 3 2 0 , 1 3 2 4 n .6 ( 1 1 th C ir . 2 0 0 5 ) . I n the L ondon c a s e the r e w a s no P S A § 202( e ) pr i c e m a ni pul a t i on orc ontr ol c l a i m , a s th e r e i s i n th i s c a s e , b u tth e p r i n c i p l e s a n d p u rp o s e s b e h i n d th e s e two cl osel y r el at ed prov i si on s of the A ctar e the sa m e. S ec t i on 20 2(e) i s a i m ed at p rev en t i n g a p art i cu l ar typ e o f u n fai rn ess i n th e m eat -p ack i n g i n d u stry, n am el y, pr i c e m a ni pul a t i on a nd c ontr ol a nd the c r e a t i on of m onopol i e s . W i th s e c t i on 2 0 2 ( e ) , a s w ith s e c tio n 2 0 2 ( a ) , “th e c h ie f e v il C o n g r e s s f

e a r e d w a s th e m o n o p o ly o f th e p a c k e r s ,” a n d th e p r im a ry p u rp o s e “w a s to a s s u r e f a irc o m p e titio n a n d f

a ir tra de pract i ce s. ” L on do n, 41 0 F . 3d at13 02 . F or the sa m e r ea sons a s ec t i on 20 2(a) unf a i rne s s c l a i m r e qui r e s a pl a i nt i f f t o s how a n a dve r s e e f

f e c ton c om pe t i t i on, s o d o e s a s e c tio n 2 0 2 ( e ) p r ic e m a n ip u la tio n o rc o n tr o l c la im . Itw as no tC on gres s’ i nt enti n enact i ng the P S A t o i nt er fe re w i th a m ea t p a c k e r ’s b u s in e s s p r a c tic e s w h e r e th o s e p r a c tic e s d id n o t in te r f e r e w ith15

co m p etit io n . S ee IB P , In c. v . G li ck m an , 1 8 7 F .3 d 9 7 4 , 9 7 8 (8 th C ir. 1 9 9 9 ) ( “[W ]e ar e . . . m i nd ful thatthe pu rpose behi nd the A ctw as no tt o so u psetthe tra di t i on al pr i nc i pl e s of

f r e e dom of

c ontr a c t , a s t o r e qui r e a n e nt i r e l y l e ve l pl a y i ng f i e l d f or a l l . ” ( quot a t i on om i tt e d) ) . I f a pa c ke r ’ s c our s e of

bus i ne s s pr om ot e s e f

f i c i e nc y a nd a i ds c om pe t i t i on i n the c a tt l e m a r ke t , the c ha l l e nge d pr a c t i c e c a nnot , by de f i ni t i on, advers el y a ff

ec tcom pet i t i on . S ee L on do n, 41 0 F . 3d at13 04 (“ W e not e that el i m i nat i on of a c om pet i t i ve i m pactre qu i re m entw ou l d sub vertthe po l i cy j us t i f i c a t i ons f orthe P S A ’ s a dopt i on. ” ) ; s e e a l s o J a c ks on v. S w i f tE c kr i c h, I nc . , 53 F . 3d 1452, 1458 ( 8th C i r . 1995) ( “ W e a r e c onvi nc e d tha tthe purpos e be hi nd § 202 of the P S A , 7 U . S . C . § 192, w a s nott o s o ups e tthe tr a di t i ona l pr i nc i pl e s of f r e e d o m o f

c o n tr a c t. T h e P S A w a s d e s ig n e d to p r o m o te e f f ic ie n c y , n o t f

ru s tr a te i t . ” ) ; G l i c k ma n , 1 8 7 F. 3 d a t9 7 8 ( s a me ) ; G r i f f i n v . Smi th f

i e l d Fo o d s , I n c . , 1 8 3 F. S up p. 2d 82 4, 82 8 (E . D . V a. 20 02 ) ( sa m e) . In thi s c as e, the j ury f

ou nd thatT ys on ’ s use of m arket i ng agre em ent s “ had an ant i -c om pet i t i ve ef

fe cton the ca sh m arketfor f ed ca tt l e” and t hatT ys on “ l ac ked a l e gi t i m a t e bus i ne s s r e a s on orc om pe t i t i ve j us t i f i c a t i on f orus i ng” m a r ke t i ng a gr e e m e nt s . T he di s tr i c tc our t , i n gr a nt i ng T y s on’ s R ul e 50( b) m ot i on f or j udgm e nta s a m a tt e rof l a w , c onc l ude d tha tP i c ke ttha d f a i l e d t o pr e s e nta ny e vi de nc e t o c a l l i nt o que s t i on T y s on’ s e vi de nc e e s t a bl i s hi ng tha tm a r ke t i ng a g r e e m e n ts : ( 1 ) a llo w th e c o m p a n y to k e e p u p w ith c o m p e tito r s in th e m e a t-16

p ack i n g i n d u stry w h o al so w ere reap i n g th e co stb en efi t s o f m ark et i n g ag reem en t s; ( 2 ) p r o v id e th e c o m p a n y w ith a r e liab le a n d c o n s is te n t s u p p ly o f c a ttle to k e e p its f a c to r ie s a t f

u ll c ap a c ity ; ( 3 ) r e d u c e th e tr a n s a c tio n c o s ts o f h a v in g to n e g o tia te i ndi vi dua l l y f

or200, 000 pe ns of

c a tt l e a y e a rt o m e e ti t s ne e ds ; a nd ( 4) pe r m i tthe c o m p a n y to m a tc h its c a ttle p u r c h a s e s w ith th e n e e d s o f its c u s to m e r s . S e e P ic k e tt, 31 5 F . S up p. 2d at11 75 –7 7. In the di stri ctcourt ’ s vi ew , “ the tri al re cord i s barre n of a ny e vi de nc e w hi c h w oul d pe r m i tthe j ur y t o c onc l ude tha t[ T y s on] l a c ke d a l egi t i m at e busi ness j ust i fi ca t i on for i t s use of [m arket i ng agre em ent s] . ” I d. at 1 1 7 6 . P i ckettcont ends thatthe di stri ctcourtgo ti tw rong . H e a rgues thatthere w a s e vi de nc e t o s uppor ta f i ndi ng tha ta l l of

T y s on’ s c om pe t i t i ve j us t i f i c a t i ons f or u sin g m ar k etin g ag re em en ts w er e p re tex tu al, th u s r en d er in g re as o n ab le th e ju ry ’s f i ndi ng tha tT y s on ha d no c om pe t i t i ve j us t i f i c a t i on f ordoi ng s o. T he pr e t e xti s s ue ap p lie d to th e ju s tif

ic a tio n s T y s o n a s s e r te d is w h a t th is c a s e tu rn s o n . I f th e r e is evi dence fr om w hi ch a j ury r ea sonabl y c ou l d fi nd thatno ne of T ys on ’ s a ss ert ed j us t i f i c a t i ons a r e r e a l , tha te a c h one i s pr e t e xtua l , P i c ke ttw i ns . O the rw i s e , T y s on w in s . B. W e m ent i on ed ea rl i eri n thi s opi ni on thatm arket i ng agre em ent s w er e or i gi na t e d by c a tt l e pr oduc e r s , notm e a tpa c ke r s . S om e c a tt l e pr oduc e r s i ns i s ton17

s e llin g th e irc a ttle th r o u g h th o s e a g r e e m e n ts a n d w ill n o t u s e th e c a s h m a r k e t. O th er s p re fe r to u se m ar k etin g ag re em en ts fo r s o m e o r a ll o f th eir c attl e. T ys o n ’s fi rstco m p et i t i v e j u st i fi cat i o n fo r u si n g th e m ark et i n g ag reem en t s i s th ati tm u stu se th e m in o r d e rto h a v e a c c e s s to th e c a ttle o f th o s e p r o d u c e r s . O th e rw is e , it w ill lo s e a ll o f

th a t s u p p ly , w h ic h c o n s titu te s a s ig n if ic a n t s h a r e o f

th e m a r k e t, to its c o m p e tito r s w h o d o u s e th e a g r e e m e n ts . A s th e d is tr ic t c o u r t f o u n d , r e s tr ic tin g its o w n u s e o f

m a r k e tin g a g r e e m e n ts “w o u ld p o s e p r o b le m s f o r[ T y s o n ], a s it w o u ld h a v e f e w e rc a ttle to c h o o s e f

r o m , a n d th e q u a lity a n d r e liab ility o f its c a ttle s u p p ly w oul d l i ke l y s uf

f e r . ” I d. a t1176. I n othe rw or ds , T y s on ne e ds t o us e m a r ke t i ng a gr e e m e nt s t o m e e tthe c om pe t i t i on. T yso n p resen t ed a n u m b er o f w i tn esses w h o t est i fi ed t o th e factu al p rem i se of thi s j us t i f

i c a t i on: T y s on’ s c om pe t i t or s us e m a r ke t i ng a gr e e m e nt s a nd T y s on w oul d s uf

f e ra s e r i ous c om pe t i t i ve di s a dva nt a ge i f i tdi d notus e the m . S om e of P ic k e tt’s o w n w itn e s s e s te s tif ie d to th e s a m e th in g . N o o n e d is p u te d th is j us t i f i c a t i on a s a f

a c tua l m a tt e r . I ns t e a d, P i c ke tt ’ s pos i t i on i s tha tthi s j us t i f i c a t i on is le g a lly in s u f

f ic ie n t. H e in s is ts th a t a p r a c tic e o f p u r c h a s e r s th a t is u n f

a irto se l l er s s ho ul d n otbe al l ow ed on the grou nd thatal l pu rc hase rs do i t . In ot her w or ds , the r e oughtnotbe a “ m e e tthe c om pe t i t i on” de f e ns e t o c onduc ttha tthe P S A o th e rw is e p r o h ib its . T h e la w d o e s r e c o g n iz e a m e e t th e c o m p e titio n d e f e n s e in a n o th e rc o n te x t.18

T h e R o b in s o n - P a tm a n A c t, w h ic h a m e n d e d th e C la y to n A n titru s t A c t, g e n e r a lly pr os c r i be s pr i c e di s c r i m i na t i on be tw e e n di f f e r e ntpur c ha s e r s of

c om m odi t i e s of lik e g r a d e a n d q u a lity . R o b in s o n - P a tm a n A c t § 2 ( a ) , 1 5 U .S .C . § 1 3 ( a ) . T h a t is , a c o m m o d itie s d e a le rc a n n o t c h a r g e its f a v o r e d p u r c h a s e r s a lo w e rp r ic e w h ile se l l i ng ata hi gh erpri ce t o o thers . T he R ob i nson -P atm an A ct , ho w ever , re cogn i ze s a n e xc e pt i on a nd pr ovi de s f ora n a bs ol ut e de f

e ns e i f a m e r c ha nt ’ s l ow e rpr i c e t o a pu rc hase r “ w as m ade i n g oo d fai th t o m ee tan equal l y l ow pri ce of a c om pet i t or. ” I d. § 13( b) . T ha tde f

e ns e ha s be e n r oundl y c r i t i c i z e d. S e e H oove rC ol orC orp. v. B a y e rC orp. , 199 F . 3d 160, 163 ( 4th C i r . 1999) ( c ol l e c t i ng c r i t i que s of the R o b in s o n - P a tm a n A c t b y J u s tic e F r a n k f u r te ra n d J u d g e s B o r k a n d P o s n e r ) . I n a ny e ve nt , the P S A i s notthe R obi ns on- P a tm a n A c t . U nl i ke the l a tt e r , the P S A d o e s n o t e x p r e s s ly p r o v id e a m e e t th e c o m p e titio n d e f e n s e . C o n g r e s s c o u ld h a v e w r itte n th a t d e f

e n s e in to th e P S A ju s t a s it d id in th e R o b in s o n - P a tm a n A c t. W e w oul d be m os tr e l uc t a ntt o do C ongr e s s ’ w r i t i ng f ori t , e s pe c i a l l y w he n the wi s d o m o f

th e p r o v i s i o n we a r e a s k e d t o wr i t e i n t o th e s t a tu t e i s d e b a t a b l e . B u twe n eed n o tg o so far as t o rej ectth e m eetth e co m p et i t i o n d efen se i n P S A cases, b ecau se i n th i s case th atd efen se w o u l d n o tm att er. Itw o u l d n o tm att er b ecau se T y s on ha s of

f e r e d othe rj us t i f

i c a t i ons f ori t s us e of

m a r ke t i ng a gr e e m e nt s , a nd thos e j us t i f

i c a t i ons a r e l e ga l l y pe r m i s s i bl e a nd f a c tua l l y unc ontr a di c t e d i n the r e c o r d .19 C. T yso n ’ s seco n d p ro ffered co m p et i t i v e j u st i fi cat i o n fo r m ark et i n g ag reem en t s i s tha tthe i rus e pr ovi de s the c om pa ny w i th a r e l i a bl e a nd s t a bl e s uppl y of c a tt l e f or i t s pac ki ng pl ant s. T hi s i s a n u nq uest i on abl y l egi t i m at e j ust i fi ca t i on . S ee G l i ckm an, 18 7 F . 3d at97 8 (“ T he re cord dem on stra t es thatthe [busi ness prac t i ce ] i s a n e f f or tby I B P t o ha ve a m or e r e l i a bl e a nd e f f i c i e ntm e thod of

obt a i ni ng a s u p p ly o f c a ttle . T h e [ P S A ] w a s d e s ig n e d to p r o m o te e f f ic ie n c y , n o t f

ru s tr a te it.” ( q u o ta tio n o m itte d ) ) . T y s o n c o n te n d s th a t, b e c a u s e th e r e a r e n o t e n o u g h c a ttle in th e m a r k e t to m e e t th e d e m a n d s o f

th e e n tir e p a c k in g in d u s try f r o m w e e k to w e e k , a n d b e c a u s e it m u s t p u r c h a s e 2 0 0 ,0 0 0 h e a d o f c a ttle e a c h w e e k to k e e p its p r o c e s s in g p la n ts runni ng a tf

ul l pr oduc t i ve c apa c i ty , the c om pa ny ha s t o s truggl e t o ke e p a c ons t a nt s u p p ly o f c a ttle c o m in g in to its p la n ts . B e f o r e 1 9 9 4 T y s o n h a d to n e g o tia te i n d i v i d u al l y fo r each p en o f cat t l e i tp u rch ased . It s co m p et i t o rs w ere al so ne got i a t i ng on the s a m e pe ns of c a tt l e , a nd the pr oduc e r s w e r e f r e e t o a c c e ptor r e j e c tT y s on’ s of

f e r e d pr i c e f

ora pe n. I f

T y s on’ s of

f e r s w e r e r e

j e c t e d f ore nough pe ns , the c om pa ny c oul d notf i l l i t s f a c t ory f orthe ne xtw e e k a nd i tw oul d notha ve e n o u g h p r o d u c t to m e e t its c u s to m e r s ’ d e m a n d s . M a r ke t i ng a gr e e m e nt s m a ke the i nve nt ory c runc h m uc h l e s s c runc hy f or T y s on. T he y a r e ne got i a t e d tw o w e e ks i n a dva nc e of de l i ve ry of

the c a tt l e , a nd20

T ys on pi cks the exactdat e of del i very w i thi n thattw o-w ee k p er i od . T hese fe atures pr ovi de T y s on w i th gr e a t e ra bi l i ty t o pl a n i t s pur c ha s e s a nd t o ke e p a s t e a dy f l ow o f c a ttle c o m in g in to its p la n ts . B y c o n tr a s t, th e c a s h m a r k e t p r o v id e s T y s o n w ith n o l eew ay ab o u tth e d el i v ery d at e, b ecau se cat t l e p u rch ased o n i tare al w ays del i vere d seven days af

t erpu rc hase . O n the ca sh m arketthere i s agrea t erri sk that T y s o n ’s b u y e r s w ill p u r c h a s e to o little c a ttle f o rits n e e d s , o rto o m u c h f o rits p la n ts to p r o c e s s w ith in th e c o n s tr ic tio n s o f th e d e liv e ry d a te s . T h e e c o n o m ic e f f e c t o f th e s e d if f e r e n c e s b e tw e e n th e tw o p r o c u r e m e n t m e th o d s is c r itic a lly im p o r ta n t f

o ra la r g e m e a t p a c k e rw h o s e p r o f it d e p e n d s o n k e e p in g its p la n ts o p erat i n g atfu l l cap aci ty w i th o u ti n t erru p t i o n s. T h e u n d e r ly in g f

a c ts r e la tin g to th is ju s tif ic a tio n w e r e n o t d is p u te d a t tr ia l. B oth T y s on’ s a nd P i c ke tt ’ s w i tne s s e s t e s t i f i e d t o the m . J a m e s H e rr i ng, pr e s i de nt of F ri on a I nd ustri es , a c ol l ec t i on of fe ed ya rds i n the T exas panh andl e, t es t i fi ed th a t b u y in g c a ttle th r o u g h m a r k e tin g a g r e e m e n ts g u a r a n te e s f o rT y s o n a c e r ta in num be rof

c a tt l e pe rw e e k. L e e B or c k, the pr e s i de nta nd pr i nc i pa l ne got i a t orf or th e B e e f M a r k e tin g G r o u p , a c o n s o r tiu m o f th ir te e n f

e e d y a r d s in th e M id w e s t, t e s t i f i e d tha tm a r ke t i ng a gr e e m e nt s e ns ur e tha tT y s on w i l l “ ha ve a pe r c e nt a ge of th e irc a ttle th a t a r e g o in g to b e p r o c u r e d f o ra p la n t th a t’s d if

f ic u lt to p r o c u r e c a ttle f or . ” J e rry H a us m a n, a n e c onom i c s pr of e s s orf r om the M a s s a c hus e tt s I ns t i tut e of T e c h n o lo g y , te s tif

ie d th a t “w h a t m a r k e tin g a g r e e m e n ts d o is it h e lp s [ T y s o n ] to21

bett ersc hedu l e i t s pl ant s. A nd by cutt i ng do w n the vari abi l i ty, they’ re go i ng t o g et grea t ercapaci ty ut i l i za t i on and h i gh erprofi t s. ” A nd B ruce B as s, T ys on ’ s hea d buy e r , s t a t e d tha tm a r ke t i ng a gr e e m e nt s e ns ur e a c ons i s t e nts uppl y of c a tt l e f orthe c o m p a n y ’s p r o c e s s in g p la n ts . P rofe ss or C atheri ne D urham , on e of P i ckett ’ s e xp ertec on om i st s, agre ed w ith th is a s s e s s m e n t w h e n s h e w a s a s k e d a b o u t th e u s e o f m a r k e tin g a g r e e m e n ts on c r os s - e xa m i na t i on: Q . Y o u w o u ld a g r e e w ith m e , P r o f e s s o rD u rh a m , th a t m a r k e tin g a g r e e m e n ts al so hel p [T ys on ] gu ar ant ee a m i ni m um supp l y of c att l e a tthe pl ant s thatget m a r k e tin g a g r e e m e n t c a ttle , r ig h t? A . Y es. Q . A nd [ T y s on] ha s a va l i d bus i ne s s i nt e r e s ti n ha vi ng a s t e a dy s uppl y of c a ttle a t its p a c k in g p la n ts , r ig h t? A . Y es. T he e c onom i c s of

thi s a r e s i m pl e . A s P r of e s s orH a us m a n e xpl a i ne d, be i ng ab le to k ee p it s p ro ce ss in g p lan ts o p er atin g at ca p ac ity h as in cr ea se d T ys o n ’s effi ci en cy. K eep i n g th e d o o rs t o i t s p l an t s o p en an d th e m ach i n ery ru n n i n g i s a fi xed costfor T ys on . N o m att erho w m any c att l e the pl antproces se s on a gi ven da y , T y s on ha s f

i xe d c os t s f

orthe f a c i l i ty a nd e qui pm e nt , the e l e c tr i c i ty us e d t o run the pl a nt , a nd the s a l a r i e s of a m i ni m um num be rof

e m pl oy e e s ne e de d t o run the pl ant . W hether the pl antsl augh t er s 2, 00 0 h ea d o r 20, 00 0 h ea d o f c att l e on a gi ven d a y , th e f

ix e d c o s t w ill b e th e s a m e . I f T y s on s l a ught e r s 20, 000 he a d of c a tt l e , the f

i xe d c os t s of

ope r a t i ng the22

p la n t a r e d iv id e d b y a f

a c to rth a t is te n tim e s la r g e rth a n w h e n it s la u g h te r s o n ly 2, 00 0 h ea d. T he m ore c att l e T ys on proces se s on a gi ven d ay , the l es s the fi xed c os tpe rhe a d. B y e ns ur i ng tha tthe pr oc e s s i ng pl a nt s a r e c ons i s t e nt l y f i l l e d a nd ope r a t e a torne a rc apa c i ty , the us e of m a r ke t i ng a gr e e m e nt s pr ovi de s T y s on w i th a m or e c os t - e f

f e c t i ve ope r a t i on. T hi s r e s ul t , w hi c h i s e nt i r e l y i n ha r m ony w i th the g o a ls o f th e P S A , s e e J a c k s o n , 5 3 F .3 d a t 1 4 5 8 ( “T h e P S A w a s d e s ig n e d to pr om ot e e f

f i c i e nc y , notf

rus tr a t e i t . ” ) , i s al e gi t i m a t e , pr o- c om pe t i t i ve j us t i f i c a t i on. P ic k e tt o f

f e r e d n o e v id e n c e to d is p u te th e e x is te n c e o f th is ju s tif

ic a tio n . I ns t e a d, thr ough e xa m i na t i on of T y s on’ s w i tne s s e s , P i c ke tts i m pl y br oughtoutthe unr e m a r ka bl e f

a c ttha ti f

T y s on w e r e w i l l i ng t o pa y “ a hi gh e nough pr i c e ” or

“ thr ow ourbi l l f

ol d outthe w i ndow ” i tc oul d ge tf r om the c a s h m a r ke ta s m a ny c a ttle a s it w a n te d f

o rits p r o c e s s in g p la n ts ( a n d e v e n th e n it w o u ld b e d if f ic u lt) . O f co u rse, i n h yp o th et i cal s w h ere eco n o m i c co n strai n t s are assu m ed aw ay, e c o n o m ic p r o b le m s a r e n o t p r o b le m s . B u t th is is n o t a h y p o th e tic a l c a s e . T y s o n is an ac tual bu si ness thatop er at es i n the re al w orl d throu gh re al m arket s w here there a r e r e a l e c o n o m ic lim its . T y s o n h a s c o m p e tito r s w h o s ta n d r e a d y , w illin g , a n d a b le to u n d e r c u t th e p r ic e o f

its p r o d u c t if

it p a y s to o m u c h f

o rth e r a w m a te r ia ls u s e d to p r o d u c e th a t p r o d u c t. D. T y s o n ’s th ir d p r o f

f e r e d c o m p e titiv e ju s tif

ic a tio n f o rp u r c h a s in g s o m e o f

its23

c a ttle th r o u g h m a r k e tin g a g r e e m e n ts is th a t d o in g s o r e d u c e s its tr a n s a c tio n c o s ts by e l i m i na t i ng the ne e d t o ne got i a t e f ore a c h i ndi vi dua l pe n of c a tt l e , a s i tm us ton the c a s h m a r ke t . W i th the c a s h m a r ke t , buy e r s f orT y s on a r e c ons t a nt l y on the road i nspect i ng pens of ca tt l e i n a never-e nd i ng ef fortt o see i f the ca tt l e i n eac h pe n m a t c h the qua l i ty the c om pa ny ne e ds t o f i l l i t s c us t om e r s ’ or de r s . O nc e the b u y e rf in d s a p e n th a t ap p e a r s to f it th e n e e d s , h e p la c e s a b id w ith th e p r o d u c e r . T he pr oduc e rus ua l l y i s c onduc t i ng s i m ul t a ne ous ne got i a t i ons w i th one orm or e of T y s on’ s c om pe t i t or s f

orthe s a m e pe n. A f

t e rda y s of

goi ng ba c k a nd f

or th, the p ro d u cer ch o o ses th e h i g h estb i d , w h i ch m ay o r m ay n o tb e T yso n ’ s. T h i s p ro cess i s c os t l y f

orboth the pr oduc e r s a nd T y s on be c a us e i tt a ke s s o m uc h t i m e . T y s on ha s t o s uc c e s s f

ul l y outbi d othe rpa c ke r s f orm or e tha n 1, 000 pe ns e ve ry w e e k ( the pe ns e a c h c ons i s t i ng of

be tw e e n f

i f ty a nd 200 c a tt l e ) i n or de rt o m e e ti t s ne e d f or 2 0 0 ,0 0 0 h e a d p e rw e e k . A s a n u m b e ro f

T y s o n ’s w itn e s s e s te s tif ie d , m a r k e tin g a g r e e m e n ts e lim in a te the t i m e a nd ener gy spentby packers and p rodu ce rs nego t i at i ng for i nd i vi du al pens. U nd erthe agree m ent s the pri ce of the ca tt l e i s s etatthe avera ge ca sh-m arket pr i c e ( pl us a y i e l d a dj us tm e nttha ti s de t e r m i ne d a f t e rpr oc e s s i ng) . M r . B or c k, the pri nci pal nego t i at or for B M G fe ed ya rds, t es t i fi ed thatw hen u si ng the ca sh m arket he w as spendi ng three or four days a w ee k o n the ph on e w i th m ea tpackers nego t i at i ng the pri ce for hi s pea k catt l e. T hi s w as “ no tvery prod uct i ve t i m e. ”24

W ith th e m a r k e tin g a g r e e m e n t s y s te m , M r . B o r c k e s tim a te d th a t it n o w ta k e s “h a lf a da y a w e e k” t o s e l l the pe a k c a tt l e t o the pa c ke r . H e s pe nds the r e s tof thi s “ hi ghpr i c e d m a na ge m e ntt i m e t o try a nd be m or e e f f i c i e nti n ourope r a t i ons a nd i n the ca re t aki ng of the ca tt l e. ” O th e rc a ttle p r o d u c e r s a n d f e e d y a r d o p e r a to r s a g r e e d w ith M r . B o r c k . J im K e l l e r , a f

e e d y a r d ope r a t ori n K a ns a s , t e s t i f i e d tha the pr e f

e rr e d m a r ke t i ng a g r e e me n t s b e c a u s e h e “ d i d n ’ th a v e t o w a s t e t i me t a l k i n g a b o u tp r i c e s . So me pe opl e l i ke tha t . T he y l i ke ha ggl i ng ove rpr i c e . I don’ t . I don’ t . I a l w a y s thi nk I coul d p robabl y be doi ng som ethi ng di ff er ent . ” P rofe ss or H ausm an t es t i fi ed that be c a us e the pr i c e i n m a r ke t i ng a gr e e m e nt s i s s e t , “ m a r ke t i ng a gr e e m e nt s a r e goi ng t o d ecrease transacti o n s co st s an d th erefo re d ecrease the co st s fo r [T yso n ] an d al so l i ke w i s e f

orthe f e e dl otope r a t ora s w e l l . ” T hi s w a s a va l i d bus i ne s s j us t i f i c a t i on, he c ont i nue d, “ be c a us e i t ’ s e c onom i c a l l y e f f i c i e ntt o de c r e a s e y ourtr a ns a c t i ons c o s ts . A n y th in g th a t d e c r e a s e s c o s ts lik e th a t in c r e a s e s e c o n o m ic e f f ic ie n c y , b o th fo r [T yso n ] , fo r th e feed l o to p erat o r, an d al so fo r th e U . S . eco n o m y. ” M r. B ass, T ys on ’ s hea d b uyer , confi rm ed thi s. H e s ai d thatfr om 19 94 t o 2 00 2, T ys on has b e e n a b le to d e c r e a s e th e n u m b e ro f b u y e r s it e m p lo y s b y a b o u t f if te e n p e r c e n t, p a r tly b e c a u s e o f

th e in c r e a s in g p o p u la r ity o f m a r k e tin g a g r e e m e n ts a m o n g c a ttle p r o d u c e r s a n d f

e e d y a r d s . P i ckettdi d n otdi sput e a ny of thi s. In fa ct , m any of hi s w i tness es agre ed25

w i th T ys on ’ s w i tness es thatm arket i ng agre em ent s r el i eve produ ce rs and p ac kers f r om the bur de n of

s pe ndi ng the i rt i m e on ne got i a t i ng pr i c e s , i ns t e a d of on r a i s i ng and p roce ss i ng ca tt l e. B re ttG ot t sc h, a c att l e produ ce r f rom N ebra ska w ho t es t i fi ed for P i ckett , conceded thatw i th m arket i ng agre em ent s buyer s a nd fe ed ya rd ope r a t or s do notne e d t o “ go thr ough the pr oc e s s of bi ddi ng a nd ne got i a t i ng pri ce s. ” R ob ertR othw el l , a c att l e produ ce r a nd fe ed ya rd op er at or i n N ebra ska, t e s t i f i e d tha tpur c ha s i ng c a tt l e thr ough m a r ke t i ng a gr e e m e nt s r e qui r e s l e s s t i m e a nd e n e r g y th a n p u r c h a s in g c a ttle th r o u g h th e c a s h - m a rk e t s y s te m . A n d J e f f B ie g e r t, a nothe rpr oduc e rf

r om the M i dw e s t , j oke d tha tw i th m a r ke t i ng a gr e e m e nt s , the buy e r s f orpa c ki ng c om pa ni e s “ c oul d be pl a y i ng gol f i f [ the y ] w a nt e d t o, a nd the ca tt l e w i l l st i l l getm arket ed. ” In sum , i tw as un di sput ed atthe tri al thatm arket i ng agre em ent s a re a m ore e f f ic ie n t m e a n s f

o rb o th m e a t p a c k e r s a n d c a ttle p r o d u c e r s to o p e r a te in th e m a r k e t. I tw a s undi s put e d tha tus e of the a gr e e m e nt s ha s l ow e r e d the tr a ns a c t i on c os t s of prod ucer s a nd m ea tpackers , i ncl ud i ng T ys on . W i tness es for bot h p art i es r e c o g n iz e d th a t th e s e a r e p r o - c o m p e titiv e b e n e f its f o rth e in d u s try . T h o s e b e n e f its a r e e n tir e ly c o n s is te n t w ith th e g o a ls o f th e P S A . S e e G lic k m a n , 1 8 7 F .3 d a t 9 7 8 . E. T y s o n ’s f

in a l c o m p e titiv e ju s tif

ic a tio n f o ru s in g m a r k e tin g a g r e e m e n ts is th a t th e y a llo w th e c o m p a n y to p a y f o re a c h h e a d o f

c a ttle in a p e n in d iv id u a lly26

ba s e d on the qua l i ty of

the m e a t , r a the rtha n pa y i ng f orthe e nt i r e pe n “ on the a ve r a ge . ” A m ong othe rbe ne f i t s , thi s gi ve s pr oduc e r s a n i nc e nt i ve t o pr ovi de p ack ers w i th th e q u al i ty an d yi el d o f m eatth ey n eed t o sat i sfy th ei r cu st o m ers’ d em an d s. I n th e c a s h - m a r k e t s y s te m , b u y e r s f o rth e p a c k in g c o m p a n ie s p a y a s in g le pr i c e f ora n e nt i r e pe n of

c a tt l e w hi c h r e s ul t s i n a n a ve r a ge pr i c e pe rhe a d i n the p en . W i th th i s “ o n th e av erag e” syst em , p ro d u cers can p u tso m e o f th ei r l ess de s i r a bl e c a tt l e — thos e w i th l e s s qua l i ty m e a torl ow e rus a bl e m e a ty i e l ds

— i n the s a m e p e n a s h ig h - q u a lity , h ig h - y ie ld c a ttle . T h e p a c k e rw h o b u y s th a t p e n g e ts s om e c a tt l e tha tm a t c h i t s c us t om e r s ’ ne e ds a nd s om e tha tdo not . T he othe rs i de o f th e p r o b le m is th a t p r o d u c e r s w ith a la r g e s h a r e o f h ig h - q u a lity o rh ig h - y ie ld c a tt l e do nota l w a y s ge tr e w a r de d f ori t . T hi s di s pa r i ty be tw e e n the qua l i ty a nd yi el d o f th e cat t l e an d th e p ri ce p ai d fo r th em o n th e cash m ark et , w h i ch i s a d is p a r ity th a t c a n g o e ith e rw a y , is th e r e s u lt o f b u y e r s n o t b e in g a b le to c lo s e ly i ns pe c ta nd a s s e s s the qua l i ty a nd y i e l d of f i f ty t o 200 he a d of

c a tt l e i n e a c h of

the m a n y p e n s th a t th e y m u s t h a g g le o v e rin th e c a s h m a r k e t. W ith m a r k e tin g a g r e e m e n ts , m e a t p a c k e r s a ls o b u y a n e n tir e p e n o f c a ttle butw i th a n i m por t a ntdi f f e r e nc e : the pr i c e pa i d f orthe c a tt l e i s a dj us t e d up or do w n aft ersl augh t ert o ref l ec tthe ac tual qu al i ty a nd yi el d o f the m ea t . T he fi nal pr i c e de pe nds noton the buy e r ’ s i n- the - f i e l d e s t i m a t e of

the m e a ttha ta pe n of27

c a ttle w ill p r o d u c e , b u t o n th e a c tu a l m e a t th a t d o e s r e s u lt a f te rs la u g h te r . T h is f e a tu r e o f m a r k e tin g a g r e e m e n ts ta k e s a w a y th e in c e n tiv e f o rp r o d u c e r s to m ix l ow - qua l i ty a nd l ow - y i e l d c a tt l e i n w i th be tt e rone s , a nd i tgi ve s the m a n i nc e nt i ve t o i nc r e a s e the ove r a l l qua l i ty a nd y i e l d of the i rc a tt l e . B oth r e s ul t s a r e good f or th e in d u s try a n d f

o rc o m p e titio n . T he fa ctual prem i se for thi s j ust i fi ca t i on w as no tdi sput ed attri al . A nu m ber of w i tne s s e s , both f

orT y s on a nd f

orP i c ke tt , t e s t i f

i e d t o i t . M r . G ott s c h, w ho t e s t i f i e d f orP i c ke tt , s t a t e d tha tone a dva nt a ge of m a r ke t i ng a gr e e m e nt s i s tha tthe packer pay s the prod ucerfor e ac h cow i n the pen b as ed on the qu al i ty. M r. R o th w el l , an o th er o f P i ck ett ’ s w i tn esses, ag reed th ati n d i v i d u al p ri ci n g w as a

“ va l i d bus i ne s s j us t i f

i c a t i on” f

orbuy i ng a nd s e l l i ng c a tt l e thr ough m a r ke t i ng a gr e e m e nt s . A nd, M r . B i e ge r t , one of the N e br a s ka pr oduc e r s t e s t i f y i ng f or P ic k e tt, c o n c e d e d th a t “p a y in g a f e e d y a r d a p r e m iu m f

o rr e a lly h ig h q u a lity c a ttle w i l l cr ea t e e cono m i c i ncent i ves thatgo al l the w ay back t o the [produ ce r] and can cause the [produ ce r] t o stre ng then h i s c ow herd. ” P r of e s s orH a us m a n, T y s on’ s e xpe r t , a gr e e d w i th the thr e e pr oduc e r s w ho t es t i fi ed for P i ckett . H e s ai d thatby payi ng for e ac h h ea d o f c att l e, ra ther than pa y i ng f orthe pe n on the a ve r a ge , the pa c ke rc r e a t e s a n e c onom i c i nc e nt i ve f orthe pr oduc e r s t o gr ow be tt e rc a tt l e . H e w e nton t o e xpl a i n tha t“ i f y ou ge tpa i d the a ve r a ge , y ou don’ tha ve a n e c onom i c i nc e nt i ve ne a r l y a s m uc h; be c a us e i f y ou28

have som e bad catt l e a nd som e goo d catt l e, they s ortof aver age out . ” M r. K el l er , the fe ed ya rd m anager f rom K ansa s, concurred w i th the profes sor. H e t es t i fi ed that o n e th in g th a t “r e a lly b o th e r e d ” h im a b o u t th e c a s h m a r k e t w a s th a t “a ll th e c a ttle w er e gett i ng sol d for the very sa m e pri ce . A l l ca tt l e, no m att erw hatthey w er e, w hatqu al i ty, everythi ng gett i ng sol d o n the sa m e pri ce . ” B e c a us e pr i c e i s a dj us t e d t o f i ta c tua l qua l i ty a nd y i e l d, m a r ke t i ng ag reem en t s p ro v i d e T yso n w i th an o th er, rel at ed co m p et i t i v e b en efi t . L i k e m o st othe rc om pa ni e s i n ourc om pl e x e c onom y , T y s on ha s a s pe c i f i c ni c he m a r ke tf

or its p r o d u c ts

— in its c a s e , s te a k s a n d h a m b u r g e r s . I t is a v o lu m e m e a t d e a le r ; its l arg estcu st o m ers are su p erm ark etch ai n s. T o p ro v i d e fo r i t s cu st o m ers i n th e m o st i nexp ensi ve and effi ci entw ay , T ys on pref er s l ar ge, hi gh -y i el di ng ca tt l e t o l ea ner, h ig h - q u a lity c a ttle . H ig h - y ie ld c a ttle te n d to h a v e m id d le - g r a d e m e a t, a n d th a t is f in e w ith T y s o n . B y f

o c u s in g its p r o c u r e m e n t o n h ig h - y ie ld in s te a d o f h ig h - q u a lity cat t l e, T yso n i s b ett er ab l e t o m eetth e n eed s o f i t s cu st o m ers atl o w er co st s. T hrou gh m arket i ng agre em ent s, T ys on prov i des a n i ncent i ve for produ ce rs t o r a i s e a nd s e l l m or e hi gh- y i e l d c a tt l e . O n the c a s h m a r ke t , the be s tT y s on c a n do i s have i t s buyer s a tt em ptt o p urchas e pens thatappear t o h ave the hi gh es tnu m ber o f h i g h -yi el d cat t l e. B u tth ati s an i n ex actsci en ce. W i th m ark et i n g ag reem en t s, the po st -s l augh t erpri ce m ore c l osel y m at ches the ac tual yi el d, w hi ch prov i des a n i ncent i ve for produ ce rs t o sup pl y T ys on w i th the hi gh -y i el d catt l e i tneeds. S ee29

G ri ff i n, 18 3 F . S up p. 2d at82 8– 29 (r ej ec t i ng po rk prod ucer s’ P S A cl ai m i n p art b e c a u s e “[ t]h e D e f

e n d a n ts d e c id e d th a t th e g u e s s w o r k r e q u ir e d to f u lf ill th e ir needs a tca sh m arket s w as i neff i ci entfor them se l ves a nd the consum er ”) . T he fa ctual exi st ence of thi s pro-c om pet i t i ve benefi tw as no tdi sput ed at tr ia l. C o u n s e l f

o rT y s o n a s k e d P r o f

e s s o rH a u s m a n : “[ I ]f

a p a c k e ris b u y in g c a ttle unde ra m a r ke t i ng a gr e e m e nt , c a n i tdo a ny thi ng t o try t o i nf l ue nc e the ty pe of a ni m a l s tha tthe pa r t i c i pa t i ng f e e dy a r ds pr oduc e ? ” P r of e s s orH a us m a n r e s ponde d: Y e s . I t h a s — it o f

f e r s m o n e y . T h a t’s w h a t it d o e s . S o it h a s th is g r id a n d it s a y s , y ou know , i f

w e w a nthi ghe ry i e l d, w e ’ l l pa y y ou m or e m one y f or h i g h er yi el d . If i tp ays m o re m o n ey, th e feed yard o p erat o r i s g o i n g t o say, y ou know , m or e m one y i s good f orm e a nd m y c a tt l e ow ne r s , s o I ’ m goi ng t o try t o i nc r e a s e y i e l d. A n d , th e in c e n tiv e w o r k s . S in c e 1 9 9 4 , w h e n it b e g a n to s ig n if ic a n tly in c r e a s e its us e of m a r ke t i ng a gr e e m e nt s , the c a tt l e tha tT y s on ha s pur c ha s e d f r om m a r ke t i ng ag reem en t s h as h ad a h i g h er yi el d th an th e cat t l e i th as p u rch ased o n th e cash m a r k e t. I ns t e a d of

pr oduc i ng e vi de nc e t o di s put e the e xi s t e nc e of thi s a dva nt a ge of m a r ke t i ng a gr e e m e nt s , P i c ke tta r gue s tha tthe be ne f i tc oul d be obt a i ne d thr ough the c a s h ma r k e ti f

i tw e r e c h a n g e d . O n e o f Pi c k e tt ’ s tw o e x p e r t s , Pr o f e s s o rD u rh a m, t e s t i f i e d tha tthe c a s h m a r ke t , l i ke m a r ke t i ng a gr e e m e nt s , c a n a l s o pr ovi de i nc e nt i ve s f

orqua l i ty by m a ki ng the s a m e s or tof of f e r s a nd di s c ount s a nd prem i um s. S he di d n ot , ho w ever , cont ra di ctthe fa ctthat , as P i ckett ’ s w i tness es30

de s c r i be d i t s c urr e ntope r a t i on, the c a s h m a r ke tdoe s notpr ovi de i nc e nt i ve s f or qu al i ty a nd yi el d. W e dea l w i th rea l m arket s the w ay they a re , no tw i th h ow they m ig h t b e r e d r a w n o n th e b la c k b o a r d in a c la s s r o o m . P ic k e tt a ls o a r g u e s th a t c a ttle s o ld o n th e c a s h m a r k e t is o f h ig h e rq u a lity th an ca tt le so ld th ro u g h m ar k etin g ag re em en ts. P ro fe ss o r H au sm an , T ys o n ’s e x p e r t, a g r e e d th a t “th o s e f e e d lo ts th a t s e ll c a s h - o n ly c a ttle h a v e a s ig n if ic a n tly hi ghe rpe r c e nt a ge of

pr i m e a nd c hoi c e gr a de s tha n the f e e dl ot s tha ts e l l m a r ke t i ng a gr e e m e ntc a tt l e . ” T ha ti s , how e ve r , be s i de the poi ntbe c a us e T y s on i s notl ooki ng f o rh ig h - q u a lity m e a t. A s w e h a v e a lr e a d y e x p la in e d , T y s o n w a n ts h ig h - y ie ld m e a t, w h ic h te n d s to b e m id d le - q u a lity . T y s o n s tru c tu r e s its m a r k e tin g a g r e e m e n ts t o encou ra ge prod ucer s t o rai se hi gh -y i el di ng ca tt l e, no thi gh -qual i ty c att l e. Ituses m a r k e tin g a g r e e m e n ts to o b ta in th e k in d o f m e a t th a t it n e e d s to s u p p ly its c u s to m e r s a t a c o m p e titiv e p r ic e . T y s o n a n d its c u s to m e r s , n o t P ic k e tt, g e t to d e c id e w h a t k in d o f

m e a t it n e e d s . F. I n s um , w hi l e P i c ke ttpr e s e nt e d e vi de nc e a ttr i a l tha tT y s on’ s m a r ke t i ng agre em ent s have decr ea se d the pri ce of ca tt l e on t he ca sh m arketand o n the m arket a s a w h o le , h e d id n o t p r e s e n t a n y e v id e n c e f r o m w h ic h a r e a s o n a b le ju ry c o u ld c o n c lu d e th a t T y s o n la c k e d p r o - c o m p e titiv e ju s tif ic a tio n s f o ru s in g th e a g r e e m e n ts . T he e vi de nc e i s undi s put e d tha tm a r ke t i ng a gr e e m e nt s pr ovi de a m or e r e l i a bl e a nd31

s t a bl e s uppl y of

c a tt l e f orm e a tpa c ke r s , r e duc e the i rtr a ns a c t i on c os t s f or p u r c h a s in g c a ttle , a n d a llo w th e m to b e tte rm a tc h p r ic e to a c tu a l q u a lity a n d y ie ld . A j ury c oul d notr e a s ona bl y f i nd, a s the one i n thi s c a s e di d, tha tT y s on ha d no c o m p e titiv e ju s tif

ic a tio n f o ru s in g m a r k e tin g a g r e e m e n ts . T he j ury m a y ha ve be e n s w a y e d by m or e tha n the e vi de nc e r e l a t i ng t o c o m p e titio n a n d m a r k e ts . I n h is o p e n in g s ta te m e n t, P ic k e tt’s c o u n s e l s o u n d e d th is them e:I w a ntt o pa us e t o m e nt i on t o y ou tha tw e ’ r e t a l ki ng he r e a bouta pa r tof A m er i ca ’ s e cono m y thati s perhaps i n som e w ay s the m ostrom ant i ci ze d p a r t. W e c e le b r a te th e c a ttle b u s in e s s in o u rb o o k s a n d in o u rm u s ic a n d in ourl i t e r a tur e a nd i n ourm ovi e s , a nd ha ve f ory e a r s . A nd ove rthe y e a r s , the one thi ng tha tthe c a tt l e bus i ne s s ha s s t ood f ordur i ng the gr ow th a nd the devel op m entof ou r c ou ntry has bee n i nd ependence, fi er ce i nd ependence, m ea ni ng ful and forcef

ul i nd ependence. W h i l e t a l k a b o u tth e i n d e p e n d e n c e o f c a tt l e f a r me r s h a s e mo t i o n a l ap p e a l , th e PSA w as no tenac t ed t o p rot ec tthe i nd ependence of produ ce rs fr om m arketforc es . It w a s e na c t e d t o pr e ve ntunf a i rpr a c t i c e s , pr i c e f

i xi ng a nd m a ni pul a t i on, a nd m onopol i z a t i on. S e e L ondon, 410 F . 3d a t1301 ( “ A tthe t i m e C ongr e s s e na c t e d the P S A , th e c h ie f

e v il f e a r e d w a s th e m o n o p o ly o f th e p a c k e r s , e n a b lin g th e m u n d u ly a n d a rb itr a r ily to lo w e rp r ic e s to th e s h ip p e r , w h o s e lls , a n d u n d u ly a n d a rb itr a r ily t o i nc r e a s e the pr i c e t o the c ons um e r , w ho buy s . ” ( quot a t i ons a nd a l t e rna t i ons om i tt ed)) . T he P S A w as enac t ed t o ensure thatthe m arketw orked, and m arket s a re n o to r io u s ly u n r o m a n tic .32

T he di stri ctcourti n G ri ff i n v . S m i thfi el d F oo d, Inc. w as fa ce d w i th a si m i l ar ar gu m entby po rk prod ucer s a gai nstthe procurem entm etho ds of po rk packers . In tha tc a s e , S m i thf

i e l d, the l a r ge s tpor k pa c ke r , ha d s w i t c he d f r om buy i ng i t s hogs on the ca sh m arkett o b uyi ng them throu gh m arket i ng agre em ent s or obt ai ni ng them f r o m f a r m s th a t S m ith f

ie ld its e lf o w n e d . T h e p r o d u c e r s w h o d id n o t w a n t to s e ll thei r hog s throu gh m arket i ng agre em ent s s ued u nd erthe P S A , cont endi ng , as P i c ke ttc ont e nds he r e , tha tthe pa c ke r ’ s c onduc tw a s unf a i ra nd ha d the e f

f e c tof m a ni pul a t i ng orc ontr ol l i ng pr i c e s . G r i f f i n, 183 F . S upp. 2d a t825. In re j ec t i ng the po rk prod ucer s’ cl ai m , the courti n thatca se expl ai ned t hat the l a w s ui tw a s pr e m i s e d noton S m i thf i e l d’ s unw i l l i ngne s s t o do bus i ne s s w i th the prod ucer s. Id. at82 8. Inst ea d, the core of the prod ucer s’ com pl ai ntw as that S m i thfi el d h ad “ t i m i ng and q ual i ty c on trol st andards thatthe [produ ce rs ] fi nd an a f f r o n t to th e irin d e p e n d e n c e .” I d . T h is , th e c o u r t e x p la in e d , w a s n o t e n o u g h to pr ohi bi ta m or e e f

f i c i e nt , c ons i s t e nt , a nd c ons um e r - f r i e ndl y pur c ha s i ng m e thod: W h i l e s u c h i n d e p e n d e n c e ma y b e a v i r tu e i n ma n y r e s p e c t s , th e f a mi l y f a r m, th e c o rn e rg r o c e ra n d th e m a in s tr e e t s p e c ia lty s to r e h a v e a ll f a lle n v ic tim to the di r e c t i on i n w hi c h the c ountry ’ s e c onom y ha s de ve l ope d. N o de gr e e of sy m pathy for the [produ ce rs ’ ] di ff i cul ty i n m ai nt ai ni ng thei r tra di t i on al w ay o f d o in g b u sin es s tra n slates to w ro n g d o in g o n th e p ar t o f th e [ p ac k er ].

. . . . T h e [ p r o d u c e r s ’] e v id e n c e d e m o n s tr a te s th a t e c o n o m ic d e v e lo p m e n ts in thei r i nd ustry have ov ert aken them ; thei r e vi dence does notdem on stra t e that the i re c onom i c w oe s w e r e c a us e d by a ny a c t i ona bl e w r ongdoi ng of S m i th fi el d u n d er th e P S A o r an y o th er th eo ry.33

I d. a t828, 830. E x a c tly th e s a m e is tru e h e r e . P ic k e tt a n d h is f e llo w c la s s m e m b e r s c o u ld ha ve e nt e r e d i nt o m a r ke t i ng a gr e e m e nt s w i th T y s on. M a ny of the pr oduc e r s w ho te s tif ie d o n P ic k e tt’s b e h a lf

h a d th e m s e lv e s s o ld c a ttle th r o u g h th e m . W ith m arket i ng agre em ent s, prod ucer s do l ose s om e of thei r i nd ependence because m ea t pa c ke r s ge tt o di c t a t e the da t e of de l i ve ry a nd a dj us tthe pr i c e t o the a c tua l y i e l d of the c a tt l e . S om e pr oduc e r s f i nd the a dva nt a ge s of

m a r ke t i ng a gr e e m e nt s w or th a ny l os s of i nde pe nde nc e ; i tw a s , a f t e ra l l , pr oduc e r s w ho c a m e up w i th the i de a of m a r ke t i ng a gr e e m e nt s . O the rpr oduc e r s , l i ke P i c ke tt , pl a c e a hi ghe rpr e m i um on i n d ep en d en ce an d p refer the cash m ark et . T h ey are en t i t l ed t o th ei r p referen ces, butthe y a r e note nt i t l e d t o f or c e thos e pr e f

e r e nc e s on othe rpr oduc e r s a nd on the p ack ers. S ee G l i ck m an , 1 8 7 F . 3 d at9 7 7 (“ [W ] e are . . . m i n d fu l th atth e p u rp o se behi nd the A ct‘ w as no tt o so u psetthe tra di t i on al pri nci pl es of fr ee do m of cont ra ct

. . . . ’ ” ( qu ot i ng Ja ckson, 53 F . 3d at14 58 )) . AF F I R ME D.