Off the Killing Floor

Dallas-based Supreme Beef wins a major round in its court battle with the USDA

Supreme Beef Processors, the Dallas company that went bankrupt while fighting the U.S. Department of Agriculture, has won another court victory over the government's right to enforce stringent new meat-testing standards. Critics say the new standards, designed to detect pathogens in meat such as salmonella and E. coli, are unfair and unreliable.

The 5th U.S. Circuit Court of Appeals in New Orleans ruled last week in Supreme Beef's favor on eight separate motions, yielding an important early-round victory for the ground-beef producer. "It's a unanimous home run as far as we're concerned," says Steven Spiritas, president and chief executive officer of Supreme Beef, which is reorganizing.

The ruling is the latest blow to the USDA's effort to enforce its microbial-testing standard, which many in the beef industry say produces results that are arbitrary and misleading to consumers. A December 21 Dallas Observer cover story, "Slaughterhouse Jive," described how Supreme Beef's decision to fight the new salmonella-testing standard eventually forced the company into bankruptcy. An earlier federal court ruling, which led to the appeal, threatens to unravel the USDA's hard-fought, Clinton-backed campaign to replace the outdated "poke and sniff" beef-inspection process with science-based, microbial testing on processed beef and poultry for the presence of potentially harmful microorganisms. The tests are designed to measure the overall cleanliness of a meat-processing operation.

Steven Spiritas, CEO of Supreme Beef, keeps winning in court against the USDA, but his ground beef processing plant remains closed.
Mark Graham
Steven Spiritas, CEO of Supreme Beef, keeps winning in court against the USDA, but his ground beef processing plant remains closed.

Since the USDA started enforcing its new standards, however, some beef processors and slaughterhouses with previously clean inspection records--particularly in the South, where a warmer climate provides an ideal breeding ground for salmonella--have failed the tests, including Supreme Beef.

USDA representatives refused to talk about Supreme Beef or any aspect of the salmonella performance standard for last month's article. A representative from the Food Safety and Inspection Service, an arm of the USDA that conducts meat-plant inspections, declined to comment because of Supreme Beef's lawsuit.

In 1999, Supreme Beef became the first ground-beef processor in the United States to be threatened with closure by the USDA for failing to meet what was then a 1-year-old salmonella-testing standard. When the USDA gave notice that it was going to withdraw its inspectors--thereby forcing Supreme Beef's plants in Dallas and Fannin County to shut down--Supreme decided to challenge in federal court the agency's authority to enforce a testing standard that had never been adopted by Congress. (Congress twice rejected the USDA's proposed salmonella standard.)

U.S. District Judge A. Joe Fish heard the case and agreed with Supreme Beef, ruling that the USDA couldn't enforce its standard without congressional approval. Fish's ruling embarrassed the federal agency, which was forced to keep inspectors at Supreme Beef's plants while the case worked its way through the courts. After Supreme Beef filed suit, the USDA peppered the company with daily microbial tests until it found potentially deadly E. coli bacteria in a batch of meat that had been shipped nationwide. Supreme Beef subsequently lost a huge contract to provide ground beef for the federal school-lunch program.

A top USDA official recently estimated that up to 16 percent of feedlot cattle carry E. coli into beef-processing plants, and that 2.4 percent of cattle carcasses contain the pathogen even after processing. (Both E. coli and salmonella bacteria are killed by proper food preparation--i.e., cooking the beef long enough.) But the unprecedented and unyielding pressure by the agency, coupled with bad publicity surrounding Supreme Beef's E. coli recall and the loss of the school-lunch contract, pushed the family-owned beef processor into bankruptcy, company officials say. Supreme Beef, once a 400-employee company that shipped 500,000 pounds of ground beef daily to the federal government and retailers such as Albertson's, Wal-Mart, and Tom Thumb, closed its doors in September. No illnesses were ever associated with Supreme Beef's product during the three decades the company was in business.

Besides the question of congressional approval, Supreme Beef and others in the beef industry contend that the new testing standard should not rely so heavily on using the presence of salmonella as an indicator that a meat processor isn't running a clean operation. Salmonella, often found in meats and vegetables before cooking, is far more prevalent in the South. Because the baseline for the USDA's salmonella standard was established using mostly Northern beef producers, test results from Southern producers were bound to produce higher levels of salmonella, Spiritas and others say. Southern meat producers could actually run cleaner operations than those in the North and yet still fail to meet what is seen as an arbitrary salmonella standard, they say.

Before shutting down, Supreme Beef was also frustrated because the federal government gave its stamp of approval to the meat trimmings coming into the Dallas plant--the meat from which Supreme's ground beef was made--even though that beef was found to be the primary source of the salmonella problem. (Thirty-five percent of Supreme's trimmings, however, came from its own slaughterhouse in Fannin County.) The Food Safety and Inspection Service's administrator, Tom Billy, testified in court that Supreme Beef's Dallas grinding plant was clean and was not contributing to the contamination problem.

The orders issued last week by the panel of three federal judges say, in essence, that the federal government cannot have Fish's decision thrown out simply because Supreme Beef is now bankrupt, that the appeal can't be expedited at the USDA's request, and that various meat organizations can file friend-of-the-court briefs supporting Supreme Beef.

The USDA's appeal must now work its way through the backed-up 5th Circuit at the usual pace, which means the appeal could take up to two years. Beef industry sources are pleased with the judges' ruling. Because the USDA's ability to enforce its new standards is in limbo, the agency is negotiating with other beef producers that have failed to meet the salmonella standard, particularly in the South, instead of shutting them down, says Rosemary Mucklow, executive director of the National Meat Association. The USDA apparently doesn't want to risk another unfavorable ruling in federal court. "The federal bureaucracy is a wonderful thing to behold. If they don't want to push the envelope on this, they will find ways not to do so," Mucklow says.

Spiritas, in a press statement, has repeated an invitation he made to outgoing Agriculture Secretary Dan Glickman: "We again request that Secretary Glickman sit down with us and other industry leaders to work cooperatively to revise certain aspects of the flawed Salmonella Performance Standard."

Glickman has yet to respond.

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