High Court Won't Hear 'Competition' Case

One of the most contentious provisions of a proposed USDA rule on buying and selling livestock would eliminate for federal Packers and Stockyards Act (PSA) lawsuits the need for a plaintiff to prove that competition in a marketplace was harmed because of a defendant's "unfair" practice or "undue preference."

Congress considered and rejected such a provision during debate on the 2008 Farm Bill, and the provision is contrary to the rulings of eight U.S. appellate courts, including most recently the Court of Appeals for the 6th Circuit.

The U.S. Supreme Court this week said it would not consider the decision of the 6th Circuit, which held -- as seven other circuits have -- that to be a violation of the PSA a challenged action must have had an adverse effect on competition.

Supporters of the proposed USDA regulation -- known as the GIPSA rule -- falsely claim that the PSA requires that a plaintiff prove that a practice harmed competition in an entire industry. But it simply requires a showing that competition in a market, which could be as small as a city, county or locality, was adversely affected.

Backers of the competition provision want to be able to bring PSA lawsuits whenever they feel a practices is "unfair." But that would turn simple disputes into federal court cases, leading to massive litigation and creating legal uncertainty for a livestock industry that already is hurting from high feed-grain prices and a worldwide recession and that is trying to feed a growing global population.