Foster Farms suit: Insurer didn’t provide antitrust coverage

Foster Farms filed a lawsuit against an insurance company, alleging that the insurer failed to provide antitrust coverage as promised.

Roy Graber Headshot
(Courtesy Foster Farms)
(Courtesy Foster Farms)

Foster Farms filed a lawsuit against an insurance company, alleging that the insurer failed to provide antitrust coverage as promised.

In the lawsuit, filed on June 8 in the United States District Court, Eastern District of California, Foster Farms claims that Everest National Insurance Company breached its contract when it sold a liability insurance policy with antitrust coverage, but has denied any coverage obligation in three cases when Foster Farms was a defendant in lawsuits where plantiffs alleged that U.S. turkey companies and Agri Stats conspired to drive up the price of products.

The lawsuit states that Foster Farms’ policy with Everest for the period from May 7, 2019 to May 9, 2020, agreed to provide broad coverage for antitrust claims, and the antitrust coverage adds a $5 million limit for antitrust claims. Yet, according to the lawsuit, Everest denied coverage for any portion of Foster’s defense and therefore breached its obligations under the policy.

The three suits that alleged Foster Farms of conspiring with other turkey producers are: Olean Wholesale Grocery Coop. et al. v. Agri Stats, et al; Sandee’s Catering v. Agri Stats, et al and Gnemi LLC v. Agri Stats, et al.

Other companies targeted in lawsuits alleging turkey industry collusion include Butterball, Cargill, Tyson Foods, Cooper Farms, Farbest Foods, Hormel Foods, House of Raeford Farms and Perdue Farms.

In May, Tyson Foods reached a $4.62 million settlement with purchasers of turkey products that alleged Tyson participated in a conspiracy to drive up the price of turkey.

Foster Farms, according to the WATTPoultry.com Top Companies Database, is the 13th largest turkey producer and the 11th largest broiler producer in the United States. Headquartered in Livingston, California, Foster Farms slaughtered 213 million pounds of live turkeys in 2020.

In November 2020, Foster Farms donated 96,000 pounds of turkey to West Coast food banks from San Diego to Seattle.

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