The United States Department of Agriculture (USDA) yesterday announced its “Fair and Competitive Livestock and Poultry Markets” proposed rule that would attempt to change the legal standard that parties must demonstrate harm to competition and make it easier to sue and win under the Packers and Stockyards Act (PSA).

In response to the announcement of the proposed rule, NCC Interim President Gary Kushner released the following statement:

“This latest rulemaking retreads a failed proposal from more than a decade ago, which was written by a plaintiff’s lawyer who made his money suing poultry companies. This current facelift to the ‘Harm to Competition’ rule would open the floodgates to frivolous and costly litigation. This was largely confirmed today by Assistant Attorney General Jonathan Kanter during the unveiling of the rule when he said that he hopes plaintiffs ‘will bring a PSA case, or two, or 20’ against poultry processing companies.

“Eight different federal circuit courts of appeal have addressed the key issue underpinning the proposed rule—the need to establish injury to competition to demonstrate a violation—and they have uniformly and resoundingly rejected the position advanced by USDA in this proposed rule. USDA participated directly in many of those cases. Rather than accept the courts’ decisions, however, Secretary Vilsack and this administration are trying to circumvent Congress and misuse the rulemaking process to achieve what they have not won in court and what Congress has never authorized – all under the guise of somehow lowering costs for consumers.

“Today’s livestock and poultry contracting and marketing practices are already and remain regulated by USDA’s Agricultural Marketing Service, which administers and enforces the Packers and Stockyards Act to protect farmers, ranchers and consumers.

“This proposal is ill-advised, would inflict billions of dollars of economic harm on American agriculture, line the pockets of plaintiffs’ lawyers, exceed USDA’s statutory authority, and increase costs for consumers who are already struggling with inflation in most of their everyday lives.”

A USDA “Fact Sheet” about the proposed rule can be found here.