Dirksen Federal Courthouse, Chicago
CHICAGO — After extracting more than $200 million in settlements over the past decade from many of the country's biggest poultry producers, trial lawyers have signaled they are ready to wrap up one of the prongs of the long running lawsuits over the price of chicken, under a new deal that generates a series of concessions, but no new money, from a market data report publisher at the center of the conflict.
On Aug. 18, lawyers from some of the largest class action firms, including Hagens Berman Sobol Shapiro, of Seattle, and Cohen Milstein Sellers & Toll, of Washington, D.C., asked a Chicago federal judge to grant final approval to a settlement with Indiana-based Agri Stats Inc.
U.S. District Judge Thomas M. Durkin has not yet ruled on the motion.
However, the judge did grant preliminary approval to the arrangement in April, indicating at the time he agreed the deal marked a good outcome for all of the parties.
Since 2016, the Hagens Berman and Cohen Milstein lawyers have been in court against Agri Stats and a collection of some of the largest producers of so-called broiler chickens, which account for much of the U.S. supply of chicken meat.
The litigation came as part of a wave of antitrust lawsuits against U.S. meat producers over claims they colluded to fix the prices of meats artificially high by suppressing supply.
After the lawsuits were filed against the chicken producers, similar actions were lodged against some of the same companies and others over the prices of beef, pork and turkey, as well.
The chicken lawsuits were consolidated in Chicago federal court and consolidated before Judge Durkin.
The chicken price lawsuits were then divided into class actions on behalf of three groups: the so-called "direct purchasers," like retail supermarkets; "indirect purchasers," including restaurants; and "end user consumer purchasers," abbreviated in court documents as "EUCP."
In the years since, poultry producers have gradually and persistently reached settlements to end the litigation.
Defendants in the EUCP litigation have included Tyson Foods, Pilgrim's Pride, Perdue Farms, Sanderson Farms, Koch Foods, Wayne Farms, Mountaire Farms, Foster Farms, House of Raeford Farms, George's Farms, Peco Foods, Simmons Foods, and others.
Collectively, all of the defendants have ended the EUCP claims against them, paying more than $200 million, all told.
Tyson Foods alone paid $99 million, and Pilgrim's Pride paid another $75.5 million.
The lawyers who led the litigation received 26% of the total as fees, or about $54 million.
In the meantime, however, the plaintiffs' lawyers have continued their pursuit of Agri Stats.
According to court documents, the chicken producers allegedly used Agri Stats, a publication available only to the producers and which regularly updated the conditions of the poultry market, to privately share information and allegedly coordinate on prices.
The plaintiffs claimed the alleged scheme allegedly drove up prices about 50% from 2008 to 2016, even though input costs, like feed, dropped about 20% in the same time window.
However, in 2023, Agri Stats scored a key win in court, when Judge Durkin rejected the plaintiffs' efforts to secure summary judgment against the company.
A judge can issue summary judgment in a case when the judge determines the facts of a dispute and the law favor one party over another substantially enough to avoid trial.
In his ruling, Durkin rejected a key pillar in the case against Agri Stats, ruling the exchange of information by itself is anticompetitive and a violation of antitrust law.
In the decision, Durkin said Agri Stats' release of "benchmarking reports" weren't enough to prove the reports were at the heart of a conspiracy. While the companies read and used the market data reports, the judge said it would have been "irrational (for the companies) to refrain from participation in Agri Stats when all your competitors are doing so."
The plaintiffs appealed that 2023 ruling to the U.S. Seventh Circuit Court of Appeals.
And while that appeal was still pending, the parties entered into a deal to resolve the claims, rather than each risk a loss at the Seventh Circuit.
Under the deal, Agri Stats will not pay any money to the plaintiffs or to their lawyers.
Rather, Agri Stats agreed to change its reporting practices, including the removal of so-called "granular data," such as plant-specific and company-specific pricing or production information.
Further, Agri Stats agreed to institute further reforms to prevent so-called anticompetitive collusion in the markets it serves.
On the website created by the trial lawyers over the EUCP litigation, Overchargedforchicken.com, the lawyers specifically noted in a section answering Frequently Asked Questions about the deal: "There is no money available from this settlement, but Agri Stats has agreed to make extensive changes to reports it publishes about broiler chickens."
In the court filing seeking final approval, the plaintiffs' lawyers essentially told Judge Durkin again that the Agri Stats deal marked the best path forward to wind down the EUCP litigation.
"After a decade of hard-fought litigation, End-User Consumer Plaintiffs (EUCPs) seek final approval of their final settlement in the case, with Agri Stats, Inc.
"The Settlement secures meaningful and immediate conduct reform which halted the information exchange practices at the center of EUCPs’ claims against Agri Stats...
"... EUCPs have previously settled with all defendants other than Agri Stats, resulting in a total recovery of over $203 million. Against that backdrop, the Settlement resolves EUCPs’ remaining claims against the last unsettled defendant and secures forward looking conduct relief directed at the Agri Stats reporting practices challenged by EUCPs."
Agri Stats has been represented by attorneys with the firm of Hogan Lovells, of Washington, D.C.
