A New Mexico ranch family was awarded nearly $2.6 million for a breach of contract plus $8 million in punitive damages from Tyson Foods Inc. following a jury trial on July 14.
Zia Agricultural includes the father-son duo of Narciso and Sean Perez, who operate a cattle consulting business. John Worden of Venable, LLP, who was Zia’s lead counsel, said the cattlemen had contracted with Tyson to deliver beef considered naturally raised without use of steroids or antibiotics. The final destination product was to go to Whole Foods. Tyson had 25 requirements for Zia Agricultural, based in Albuquerque, to be certified and Worden said his clients met all the requirements.
Zia Agricultural and Tyson had long-standing business relationships with agreements dating back 20 years, Worden said in a telephone interview. The breach of contract case goes back to February 2019 when Zia Agricultural and Tyson began putting together a lengthy agreement with prices and specifics about the delivery of 9,000 head of cattle. The company’s buyer later balked on the price and said the company was going to pay a much lower price and a check was issued to reflect that.
Disappointed by the Tyson representative’s actions, Zia Agricultural contacted Venable and a breach of contract case was initiated, eventually landing before a federal court jury in Las Cruces, New Mexico. Worden said the federal jury quickly returned a verdict. He had asked for $2.5 million to compensate Zia and an additional $5 million in punitive damages to send a message that breaking the contract was wrong. The fact the jury upped the punitive damages from $5 million to $8 million appeared to vindicate the victims.
Narciso Perez, Worden said, is like many farmers and ranchers who believe a handshake is their bond and had enjoyed a good relationship with Tyson in the beginning, but later agreements were becoming more contentious. The company’s representative has since retired.
“The last couple of deals were tough,” Worden said.
Zia Consulting continues in operation and although it faced a difficult financial setback for a while, the father and son are continuing to be successful leaders in naturally raised cattle and in traditional practices, Worden said. Other members of the Venable LLC team who were instrumental in the case were Sarah Diamond and summer associate Zoe Gallagher.
A spokesman for Tyson Foods, Springdale, Arkansas, declined comment on the case.