Cody Easterday has filed another lawsuit from behind bars. This time he's making antitrust claims against the company he was convicted of stealing more than $200 million from.
Attorneys representing Easterday filed the antitrust suit in the Eastern Washington federal court in February. It follows a lawsuit against Tyson Foods claiming the company didn't pay Easterday for using his likeness overseas, asking to reduce the remaining restitution he owes the company.
In December, more than a year and a half after pleading guilty to the wire fraud charge, Easterday reported to the Federal Correctional Institute Lompoc in California to begin his 11-year sentence. He will be on probation for three years after that.
At the time he reported to jail, Easterday had only paid back about $70 million of the $244 million he was ordered to pay Tyson Foods and Segale Properties for what prosecutors dubbed a "ghost cattle" scam.
After previous payments were applied, he still owes Tyson Foods about $170 million and Segale Properties $7.5 million, according to court documents.
Segale loaned Easterday money to buy and care for cattle, and was caught up in the fake cattle scheme.
During the sentencing, U.S. District Court Judge Stanley Bastian agreed to hear arguments later on the final restitution amount. But after reporting to prison, Easterday began filing new lawsuits.
The first alleges breach of contract over the "Cody's Beef" branding deal, which saw Tyson sell premium beef to Nippon Ham in Japan using a marketing campaign centered on Easterday from 2015 to 2020.
In that case, lawyers say the branding deal was struck with Cody Easterday personally, so the lawsuit was not filed on behalf of the Easterday family companies.
Cody Easterday was the president of Easterday Farms and Easterday Ranches, but not the sole owner. The new antritrust lawsuit also has been filed with only Cody Easterday listed as a the plaintiff.
While previous lawsuits and filings against Tyson were acknowledged as attempts to negotiate restitution, it's unclear if this new suit is an attempt to cut the restitution amount.
Antitrust Lawsuit
"The antitrust complaint continues a series of actions on behalf of Mr. Easterday to recover the damages he sustained as a result of Tyson Fresh Meat's actions," Jeffrey S. Jacobovitz, chair of Arnall Golden Gregory's Antitrust Group told the Herald in a statement.
The antitrust and unfair competition case details a number of practices Easterday's lawyers say are "anticompetitive, unfair, abusive, unjustly discriminatory, and deceptive acts and practices," according to the lawsuit.
They're accusing Tyson of wielding "immense market power, resulting from acquisition and consolidation" to create a monopsony market in the Pacific Northwest, leaving cattle feeders with no choice but to contract with them and giving Tyson power to demand unfair and abusive pricing, contract terms and conditions.
A monopsony is a market situation in which there is only one buyer in a market. In this case, the attorneys claim that Tyson is the only buyer with the beef processing plant capacity that Easterday could have worked with. Whereas a monopoly is complete control of the supply or trade.
The lawsuit claims that until about 2010, Tyson and Easterday Ranches operated under an agreement that split the cost of buying and caring for cattle 50-50.
The lawsuit says that Tyson encouraged Easterday to expand his cattle operations and then some time after 2010, Tyson renegotiated a "pioneer model" contract that shifted how the cattle were paid for, placing a larger burden on the Easterdays.
They said this model saw Easterday assuming all of the risk, with Tyson advancing the company money for feed and care.
Although not mentioned in the antitrust filing, the advances are how Easterday stole the money from Tyson, by sending invoices for cattle that didn't exist, according to court documents presented during his sentencing.
The most recent contract renegotiation between the companies occurred in 2017. The lawsuit claims that in a 2019 attempt to renegotiate, Tyson shut Easterday down by threatening to close the Pasco beef processing plant.
They also claim that Tyson shut down its own Boise plant in order to suppress competing bids, and that Tyson would ship in cattle from the Midwest during spikes in demand to avoid creating competitive opportunities for Northwest feedlots.
The lawsuit claims that Tyson had agreed not to seek criminal charges against Easterday when his wire fraud was discovered, and they forced him to sign over ownership of the cattle actually on hand.
The scheme, which saw Easterday charging Tyson for the care of cattle that never existed, began in 2016 and continued through 2020, eventually defrauding Tyson out of more than $233 million in order to offset $200 million in losses Cody Easterday had accrued by trading on the commodities markets.
At the time the fraud was discovered, court documents show Tyson took ownership of the cattle remaining and continued to pay Easterday for their care until they were sent for processing.
It is unclear whether Tyson would have had a choice in whether Easterday would be charged by federal prosecutors given the size and scope of the crime.
During sentencing, Judge Bastian called the fraud one of the largest he had ever seen. However, the company, and others involved in the bankruptcy lawsuit, agreed not to seek charges against other members of his family due to Cody Easterday's cooperation in helping reach a settlement.
Tyson has not yet filed a response to the initial antitrust complaint.
What Easterday owes
During his sentencing, prosecutor John "Fritz" Scanlon noted that the offsets in restitution that Easterday's attorneys were arguing for would effectively wipe out what he owes Tyson. That would leave him responsible for only $7.5 million more. He's already paid 29% of the $244 million stolen from the companies.
"Right now as he's sitting here to take responsibility, he shouldn't be coming in and saying actually I shouldn't spend any time in prison or pay back (the money)," Scanlon said at the time.
After the bankruptcy lawsuit was concluded, Tyson had an allowable claim of $261 million and Segale had one for $7.8 million.
They received partial payments, totaling about $62.5 million and $3.5 million respectively. Those payments have been applied to the restitution order.
During the October criminal sentencing, Tyson said their total loss, including the cost of trying to get its money back, exceeded $285 million. That figure does not include the costs for fighting the new lawsuits.
All reported payments made, according to court documents, including the $11 million bankruptcy settlement, $14.5 million requested payments for attorneys and a remaining $1 million claim by Rabo AgriFinance, totaled about $100 million.
During the Easterday family bankruptcy lawsuit, the assets of the Easterday Farms and Ranches companies were liquidated, raising an estimated $250 million. The largest portion being a $209 million sale of 18,000-acres of Easterday Ranches land.
Projected release
The Federal Bureau of Prisons lists Cody Easterday's estimated release date as April 2032, which means his 11 year sentence already appears to have been reduced by 1 1/2 years. He may have received credit for time served on house arrest while awaiting sentencing.
Easterday specifically requested he serve his time at Lompoc because he would be able to participate in "productive activities" and "evidence based recidivism reduction programs," according to court documents.
These programs would let Easterday earn federal time credits to allow him to transition into a halfway house or home confinement sooner.
When making the request, his lawyers pointed to a farming and livestock program at Lompoc that would be especially suited for him, given his agricultural background.
