Fifth Circuit Reverses $25 Million Damages Award Against Pilgrim’s Pride

On August 27, 2013, the Court of Appeals for the Fifth Circuit reversed a district court damages award of more than $25 million against Pilgrim's Pride Corporation, a large producer of processed chicken. A group of chicken growers with whom Pilgrim's Pride contracted filed suit against the company alleging that the company violated the Packers and Stockyards Act (PSA) by engaging in a course of business for the purpose of "manipulating or controlling prices." The Eastern District of Texas held that Pilgrim's Pride's conduct of idling or selling its chicken processing plant reduced output to increase prices, and awarded damages over $25 million to plaintiffs.

On appeal, Pilgrim's Pride argued that the PSA section (7 U.S.C. § 192) that prohibits manipulation or control of prices is, in actuality, an antitrust...