On June 21, 2024, Deputy Assistant Attorney General Michael Kades announced the Department of Justice (DOJ) Antitrust Division’s plan to increase both civil and criminal antitrust enforcement in the agriculture sector. As part of this plan, the DOJ will create an enforcement team focused on the agriculture industry, which will be based in Chicago.
This announcement comes on the heels of several large agricultural antitrust enforcement actions brought by the DOJ in recent years, including United States v. Agri Stats, Inc., United States v. Cargill, and high-profile criminal prosecutions in the broiler chicken industry. The Agri Stats action is focused on alleged violations of the Sherman Act, while Cargill was one of the first-ever Packers and Stockyards Act (PSA) cases brought by the DOJ. The PSA seeks “to assure fair competition and fair trade practices, to safeguard farmers and ranchers . . . to protect consumers . . . and to protect members of the livestock, meat, and poultry industries from unfair, deceptive, unjustly discriminatory and monopolistic practices.” Specifically in Cargill, the DOJ alleged that poultry producers violated the PSA by engaging in deceptive practices through the use of a “tournament system” between chicken growers that forced the growers to compete against one another to determine their compensation. The action resulted in a settlement that included, among others, a provision whereby certain defendants were not permitted to reduce grower pay “as a result of the [g]rower’s performance in comparison with the performance of other [g]rowers.”
As DAAG Kades’ announcement emphasized, the DOJ has a role in enforcing the PSA, along with the United States Department of Agriculture (USDA). While the USDA generally must refer PSA cases in the poultry space to the DOJ, the USDA has discretion on whether to refer non-poultry cases to the DOJ. The revival of PSA enforcement and recent collaboration between the USDA and the DOJ are examples of the Biden Administration’s “whole-of-government” approach to promoting competition in the U.S. economy.
In his remarks, DAAG Kades stressed that, as part of its revamped efforts to enforce the PSA, the DOJ is deliberately avoiding the use of any terms like “competitive injury” or “harm to competition” because, DOJ says, these terms unnecessarily restrict the scope of the PSA. Additionally, DAAG Kades signaled that DOJ is actively looking for tips about anticompetitive conduct occurring in auction contexts — an area where the DOJ has had a spate of successes in recent years.
If you have any questions about the Packers and Stockyards Act or related issues, contact the authors of this article or your Foley & Lardner attorney.
