Making sense of poultry class-action suits, settlements

With so many class-action lawsuits in which plaintiffs accused the U.S. poultry industry’s largest companies of conspiring to drive up the price of chicken, and a fair number of companies making settlements in these suits, it can be overwhelming to try to keep track of it all, even if you are an attorney specializing in agricultural law.

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Attorney Brook Duer offered insights on class-action lawsuits against major poultry companies during the recent webinar, 'Multi-District Antitrust Litigation in the Protein Sectors.' (Courtesy National Agricultural Law Center)
Attorney Brook Duer offered insights on class-action lawsuits against major poultry companies during the recent webinar, "Multi-District Antitrust Litigation in the Protein Sectors." (Courtesy National Agricultural Law Center)

With so many class-action lawsuits in which plaintiffs accused the U.S. poultry industry’s largest companies of conspiring to drive up the price of chicken, and a fair number of companies making settlements in these suits, it can be overwhelming to try to keep track of it all, even if you are an attorney specializing in agricultural law.

“It’s just so large, and there’s so much of this and it’s coming so often … it’s tough to keep straight,” said Brook Duer, staff attorney for the Penn State Center for Agricultural and Shale Law. “You get bombarded with notifications of all sorts of multimillion dollar settlements that are being sent to the court for approval. It’s really, or it was for me anyway, tough to make sense of it all.”

But a self-described masochist, Duer devoted time to understand the lawsuits, the different plaintiff classes, and who has offered to settle in these ongoing court cases.

Duer, who prior to his time at the Penn State center served as chief counsel for the Pennsylvania Department of Agriculture, gave an overview of the lawsuits that have been filed against major players in not only the broiler industry, but the pork and beef industries as well, while speaking during the May 17 webinar, “Multi-District Antitrust Litigation in the Protein Sectors,” hosted by the National Agricultural Law Center and the University of Arkansas System Division of Agriculture.

Plaintiff classes

There have been three main plaintiff classes in these lawsuits: Direct purchaser plaintiffs, indirect purchaser plaintiffs and end-user consumer plaintiffs. Duer offered the following definitions of those three classes.

Direct purchaser plaintiffs: These are the entities who buy directly from the processor. Duer says they are “anybody who bought directly from Tyson or JBS or Swift, or anybody else to the grocery store.”

Indirect purchaser plaintiffs: Duer also refers to this class as commercial and institutional purchasers. It includes schools, universities and correctional facilities. These plaintiffs buy products from “one type of middleman,” but “didn’t have any direct contractual relationship with the defendant companies."

End-user consumer plaintiffs: This group involves the people who actually purchased the final poultry products, typically from a direct purchaser.

Settlements to date

Integrators who are defendants in suits involving the direct purchaser plaintiff class include: Koch Foods, Tyson Foods, Pilgrim’s Pride, Perdue Farms, Sanderson Farms, Wayne Farms, Mountaire Farms, Peco Foods, Foster Farms, House of Raeford Farms, Simmons Foods, Fieldale Farms, George’s, O.K. Foods, Amick Farms, Mar-Jac Poultry and Harrison Poultry. Since the suits were filed, Sanderson Farms and Wayne Farms merged to form Wayne-Sanderson Farms.

Duer pointed out that to date, five companies have offered settlements. Those are Peco Foods, George’s, Amick Farms, Pilgrim’s Pride and Tyson Foods. Settlement amounts, respectively, are $5.15 million, $4.25 million, $3.95 million, $75 million and $80 million.

Fewer integrators were named as plaintiffs in the indirect purchaser plaintiff class lawsuits. According to Duer, this group includes Koch Foods, Tyson Foods, Pilgrim’s Pride, Perdue Farms, Sanderson Farms, Peco Foods, Foster Farms, House of Raeford Farms, Simmons Foods, Fieldale Farms, George’s and O.K. Foods.

Of those, Duer said, only Tyson has settled, with that settlement amounting to $42.5 million.

In the end-user consumer plaintiff class, defendants include Koch Foods, Tyson Foods, Pilgrim’s Pride, Perdue Farms, Sanderson Farms, Wayne Farms, Mountaire Farms, Peco Foods, Foster Farms and House of Raeford Farms.

Only Tyson and George’s have settled, for respective amounts of $99 million and $1.9 million.

Chick-fil-A breaks from class

One exception in the direct purchaser class has been quick-service restaurant chain Chick-fil-A.

Duer said Chick-fil-A “wanted out” of the class-action lawsuit process, and “decided that their legal interests were only against Tyson.”

So Chick-fil-A negotiated its own direct settlement with Tyson for an undisclosed amount.

Expect more settlements

In going over which integrators have settled, Duer did bring attention to the fact that a few of the largest companies that had not offered settlements, specifically mentioning Sanderson Farms, Perdue Farms and Koch Foods.

Duer only made vague speculations concerning why companies may or may not have settled, but despite that, he said, “I would expect there to be more settlements very soon.”

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