Attorney estimates damages at several million to producers in two states
A Holstein woman is one of three producers who recently filed lawsuits against Tyson Fresh Meats (formerly doing business as IBP) or John Morrell & Co., over claims of unfair payment deductions from their sales of hogs.
Lori Sokolowski, with Solo Pork out of Holstein, claims that she has been wrongly deducted charges for insurance covering hogs in transit from the farm to the meatpacking plant.
Her suit is filed on behalf of all producer who sold hogs to Tyson or IBP since December of 1999, and seeks damaged to be paid to the thousands of producers who have sold animals to that meatpacker.
Three separate suits were filed December 31 in U.S. District Court in Sioux City.
Domina Law, representing all three producers, said in a statement that that it is acting against the nation's largest pork slaughterhouses for Packers and Stockyards Act violations and insurance law misconduct.
The Complaints were filed on behalf of Iowa and Nebraska hog producers against John Morrell, and for Iowa producers only against Tyson.
The plaintiff hog farmers assert that Tyson and Smithfield sold them death loss insurance unlawfully.
"IBP and Smithfield have sold death loss insurance to Iowa and Nebraska hog producers for several years," said David Domina, managing partner of Domina Law. "But these companies are not insurance companies. They are not insurance agents. There is no insurance policy. The defendants are slaughterhouses. We contend it is unlawful under both federal and state law for the slaughterhouses to deduct money from producers for nonexistent insurance policies."
Domina claimed that "insurance is sold under the guise of insuring against the risk of a producer's hogs dying in transit or before being unloaded at the plant. The companies allow producers to submit claims to get paid for the value of the dead animals if the conditions of the policies are met. But there is no insurance policy involved to our clients' knowledge. None has ever been delivered."
The firm says that Iowa and Nebraska have comprehensive insurance regulations that protect the public. Federal law requires packers to deal fairly and not deceptively with producers. For a person or company to sell insurance, they must be (I) licensed; (2) sell policies approved by the state insurance commission; (3) make proper disclosures about the insurance policies before persuading the insurance customers to sign the policy; and (4) actually deliver a policy, Domina said.
"Hog producers in Iowa and Nebraska are out an unknown total sum - estimated at several million dollars as a result," Domina said.
Sokolowski v. Tyson Fresh Meats, Inc. is filed on behalf of any Iowa hog owners selling to IBP; and suits filed by Scott Kinkaid of Hartington, Neb. and Alan Hoefling of Marcus, Iowa, are filed on behalf of Nebraska persons selling to John Morrell.
Sokolowski declined to comment on her lawsuit.