Posted 6/26/2008 09:45 am
Updated 11 months ago
Tyson Foods Inc. has settled a multimillion-dollar lawsuit filed by two of its competitors who allege the Springdale-based poultry producer used deceptive marketing to lie about its antibiotics use in chickens.
Perdue Farms, based in Salisbury, Md., and Sanderson Farms of Mississippi filed suit against Tyson in Baltimore Federal Court earlier this year.
Both companies claimed that Tyson's "raised without antibiotics" advertising and labels falsely implied that competing companies' poultry was not as healthy.
Sanderson stated that it lost a $4 million account to Tyson because of its ad campaign and Perdue said it lost about $10 million in revenue since last year for the same reason.
Both plaintiffs were asking Tyson to stop its advertising and repay any gains from the campaign.
After hearing the case in April, a U.S. District Judge ordered Tyson to stop its advertising campaign.
On Monday, a judge ordered that the case be dismissed after the parties agreed to settle out of court. The terms of the agreement have remained confidential.
But the settled suit does not end Tyson's legal woes. Since Friday, four additional cases have been filed against Tyson by consumers across the U.S.
The suits seek class action against Tyson for violation of state consumer protection acts, saying that Tyson falsely claimed that its chickens were free of certain antibiotics.
At the center of all of Tyson's legal issues is the ionophore antibiotic, which is used to prevent intestinal illnesses in poultry but is not used in human medication, and a vaccine containing gentamicin, which Tyson injects in its eggs and is used in human therapies.
Tyson has argued that its chickens are raised antibiotic free and subsequently advertised and labeled its chicken as such.
At the beginning of June the United States Department of Agriculture disagreed and ordered Tyson to remove the labels by July 9. Tyson agreed to remove the labels and cease the advertising campaign but has sued the USDA over the quick deadline.
No action has been taken in the other cases.