Illinois District Court Finds Chicken Purchasers’ Conspiracy Claims Against Bank Are For The Birds
06/15/2021On June 1, 2021, Judge Thomas M. Durkin of the United States District Court for the Northern District of Illinois granted defendant’s motion to dismiss price-fixing claims brought by a group of chicken buyers against a large bank operating in the agribusiness industry. In re Broiler Chicken Antitrust Litigation, No. 16 C 8637 (N.D. Ill. June 1, 2021).
Plaintiffs are a collection of food industry companies that purchase poultry from chicken producers. Defendant is Rabobank (the “Company”), a global leader in food and agriculture financing and banking, and one of the world’s largest lenders to chicken producers. Plaintiffs alleged that the Company participated in an anticompetitive conspiracy with major chicken producers to restrict supply and thereby artificially inflate chicken prices. In particular, they alleged that the Company facilitated this price-fixing scheme by acting as a “conduit of information and communication among chicken producers” involved in the alleged conspiracy, and the Company moved to dismiss plaintiffs’ antitrust allegations.
Despite acknowledging that the Company engages in “frequent communication across the industry” as part of its standard business practice, Judge Durkin found that plaintiffs did not plead sufficient facts to state a claim under Rule 12(b)(6). Comparing plaintiffs’ allegations against the Company to similar claims in the case brought against an industry analyst for facilitating the asserted conspiracy as a conduit of information among chicken producers, the Court reasoned the claims against the analyst had survived a prior motion to dismiss because they were “more concrete.” Specifically, plaintiffs alleged the analyst provided detailed reports to chicken producers who “were able to use the reports to communicate their . . . production intentions.” The Court explained it was plausible that the industry analyst knew its reports were being used in furtherance of the alleged conspiracy because they included production plan information that went to the heart of a scheme to reduce supply and fix broiler prices. In contrast, here, plaintiffs did not assert facts to provide the Court with a similar basis to infer that the Company’s communications with poultry producers concerned the alleged conspiracy.
Although plaintiffs argued that a handful of emails satisfied this requirement because they indicated a Company director had relayed communications between industry players that participated in the alleged conspiracy, the Court was not persuaded. Without any additional information regarding the ambiguous content of the relayed correspondence, the mere fact that defendant liaised between poultry producers was not enough to satisfy the relevant plausibility standard under Iqbal. “Rule 12(b)(6) . . . does not permit Plaintiffs to chase ghosts. The mere possibility that the subject matter of [the Company’s] communications was the alleged conspiracy to reduce supply is insufficient to state a claim[,]” explained the Court.
The Court also found that plaintiffs’ claims regarding the Company’s individual efforts to reduce chicken production levels and increase industry prices even less compelling. Judge Durkin opined that, as a business with significant interest in the industry, the Company could have legitimate economic motives for this behavior—“without a plausible claim of helping the producers to coordinate production decreases . . . [, e]ncouraging lower production by itself is simply not enough to plausibly establish liability.” Accordingly, the Court granted the Company’s motion to dismiss plaintiffs’ claims without prejudice.