Only one piece of evidence was presented by plaintiffs in class-action lawsuits that could indicate that Claxton Poultry took part in a conspiracy to limit the broiler supply and drive up the price of chicken.
But that one piece of evidence was only circumstantial, a federal judge stated in a recent decision, clearing Claxton Poultry of any allegations of collusion.
In a recent decision in the U.S. District Court for the Northern District of Illinois, Judge Thomas M. Durkin not only cleared Claxton Poultry of such allegations, but also Foster Farms, Perdue Farms, Wayne Farms, Case Farms, Fieldale Farms and Agri Stats.
In his opinion, Durkin stated that the only evidence that was presented against Claxton was proof of an internal text message from November 2012, in which a Claxton employee relayed a conversation he had with a Pilgrim’s Pride employee about pricing.
The Claxton employee allegedly said a Pilgrim’s employee urged Claxton Poultry to “raise our prices,” to which he allegedly responded “we are trying.”
“Certainly, this text message is evidence that (Claxton Poultry) communicated with Pilgrim’s about pricing, and an inference can be drawn that the two companies believed it was in their best interest to work together to raise prices. But the principal claim in this case is that defendants conspired to reduce supply. And the economic evidence in this case shows that supply was reduced in 2009 and 2012. To infer a supply reduction conspiracy that resulted in a production decrease in 2012 from a text message about pricing that was sent at the end of 2012 is an unreasonable inference,” Durkin wrote.
“In this case, there is of course only circumstantial evidence that defendants conspired. So, there is always one level of inference necessary to find a conspiracy. Here, plaintiffs would ask the jury to make an additional inference from a single pricing conversation to an agreement to reduce supply. Further, the jury would be required to infer that a communication from the end of 2012 is indicative of an agreement that is alleged to have been established at least a year earlier. And these are only the subject matter inferences. There remains the ultimate inference of an industry-wide conspiracy. This one text message is simply an insufficient basis for a reasonable jury (to) make such a finding.”
Attempts to get a comment from Claxton Poultry following the judge's decision were unsuccessful, but in 2020, when Claxton Poultry President Mikell Fries and Vice President Scott Brady were indicted on federal antitrust charges amid similar allegations, the company said the charges against them were baseless.
“The allegations attributed to our company are without merit and we intend to vigorously defend our company and its good name and its good name as this process moves forward.”
After two trials ended in hung juries, Fries, Brady, and three other men with past associations as Pilgrim’s Pride executives, were found not guilty.
