(CN) – The 10th Circuit upheld a $14.5 million judgment against an Arkansas poultry producer accused of using its near-monopoly market position to force Oklahoma growers into lopsided contracts.
About 300 poultry growers in southeastern Oklahoma filed a class action in 2002 against O.K. Industries, which hires growers to raise broiler chickens.
The growers said O.K. abused its position as the area’s largest poultry producer to drive prices down for raising chickens.
To become one of O.K.’s growers, the plaintiffs had to build $160,000 chicken houses, agree to use only chicks, feed and medicine supplied by O.K., and absorb the costs of diseased birds or inadequate supplies. In exchange, they got one flock of chicks, with replacements promised “from time to time.”
The growers accused O.K. of deducting costs for medicine and supplies from their pay, delivering dead chicks that they had to pay for, reducing their incomes by giving them fewer birds each year, and paying them according to an unconscionable competitive ranking system.
In July 2007, the 10th Circuit ruled that the growers to proceed with their claim that O.K.’s actions injured competition.
A federal jury in 2008 awarded the growers $21.1 million, which was reduced to $14.5 million by a federal judge.
The Denver-based federal appeals court upheld the award, rejecting each of the defendant’s challenges.
The Arkansas company argued that the growers failed to prove it had violated the Packers and Stockyards Act, and that there wasn’t enough evidence to support two of the five possible theories of liability.
It also challenged some of the expert testimony admitted at trial and the federal judge’s failure to instruct the jury on the statute of limitations.
“[W]e reject each of these contentions,” the three-judge panel wrote.