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Federal Judge Narrows Scope Of Broiler Chicken Antitrust Litigation In Anticipation Of Trial
07/11/2023On June 30, 2023, U.S. District Judge Thomas Durkin for the Northern District of Illinois partially granted defendants’ motion for summary judgment in a consolidated antitrust case alleging unlawful price-fixing in the broiler chicken industry. In re Broiler Chicken Antitrust Litig., 1:16-cv-08637 (N.D. Ill. 2023). Plaintiffs claim defendant broiler chicken producers raised the price of broiler chickens in violation of Section 1 of the Sherman Act by unlawfully agreeing to reduce the supply of chicken between 2008 and 2009 and 2011 and 2012. The Court granted summary judgment in favor of seven defendants but denied the motions by 11 other defendants and allowed those claims to proceed to trial, citing differences in the amount of evidence expressly involving each defendant.
While the Court found that there was “relatively strong” economic evidence supporting plaintiffs’ allegations of price fixing, it required “non-economic evidence specifically indicating express agreement” with respect to each individual defendant for plaintiffs’ claims to move forward. The key distinction between the claims against the dismissed defendants and those against the remaining defendants was the amount of “non-economic evidence” relating to each.
With respect to the claims against 11 defendant chicken producers, the Court found sufficient evidence to present the claims to a jury. The evidence against these defendants included “numerous examples of supposed competitors regularly exchanging sensitive production data with each other” such as direct email communications between defendants’ executives and the sharing of reports prepared by a co-defendant industry report producer that had been specifically redacted for each defendant. In addition, the Court pointed to statements on earnings calls where defendants’ executives called for industry wide production cuts, defendants’ involvement in the advisory board of a company many defendants used to slaughter their hens capable of breeding, and practices of buying supply from competitors versus growth. The Court held that “a jury could find that such conduct is not the behavior of active competitors.”
On the other hand, the Court granted summary judgment to six defendant producers, concluding that there was insufficient evidence for a reasonable jury to find by a preponderance of the evidence that they joined a price-fixing conspiracy. Although the Court held that plaintiffs put forth sufficient economic evidence to demonstrate “opportunity and incentive to conspire,” it concluded that, despite plaintiffs having many years’ worth of discovery, there was a lack of evidence that the dismissed defendants “communicated with their competitors, which would permit a reasonable inference of agreement.” While plaintiffs’ evidence included communications mentioning those producers, none of the communications contained statements by or from them, so the evidence could not support an inference that the dismissed defendants joined any price-fixing conspiracy.
The Court also granted summary judgment in favor of defendant industry report producer concluding that there was insufficient evidence to support plaintiffs’ theory that the company provided chicken producers with confidential information that aided in the alleged price-fixing scheme. The Court found that although the industry report producer provided defendants with “general market production and pricing data,” there was “scant evidence that the information [the industry report producer] itself provided to each individual producer was used in a manner that had an anticompetitive effect.” While the Court noted that “[t]he data might provide some general ‘insight’ into competitors’ plans,” [the industry report producer’s] “information is only sufficient to permit and educated guess” and “[g]uesses, even educated ones, are not evidence of an express agreement.”
Antitrust Litigation