Food & Agriculture Quarterly January 2019 | Page 15

FOOD & AGRICULTURE QUARTERLY | JANUARY 2019
market prices available to independent dairy farmers
for their milk and has forced farmers to join or remain
in DFA. The discovery phase of the case recently
closed, and motions for summary judgment are due
to be filed on or before January 11, 2019. A hearing
on the motions for summary judgment has been
scheduled for April 9, 2019.
Eggs
In 2008, direct and indirect egg purchasers
filed antitrust class actions alleging that 16 egg
farmers and two of their cooperatives engaged in
a conspiracy to raise the price of shell eggs and
egg products by reducing supply. In re Processed
Egg Products Antitrust Litig., No. 08-md-02002
(E.D. Pa.). Several direct actions by other plaintiff
groups followed. See Allen Carter’s article on page
4. Plaintiffs argued that pre-production supply
management is not protected under the Capper-
Volstead Act.
Plaintiffs also contested the Capper-Volstead Act
status of the cooperatives because at least one of
the defendants was allegedly not a farmer. The court
agreed, in part, with plaintiffs and ruled that one of
the two cooperatives involved was not a Capper-
Volstead protected organization because one of
its members was not a farmer/producer, potentially
exposing certain defendants to hundreds of millions
of dollars in alleged damages.
Since the litigation’s inception, several defendants
have settled with certain plaintiffs, paying over $136
million. The three defendants that remained in the
direct purchaser class action defended the case
before a jury starting in May 2018 and won. The
direct purchasers that opted-out of the class action
await a trial date. Five defendants remain in at least
one of the actions. All indirect purchaser actions
were voluntarily dismissed on July 17, 2018.
to raise prices, Maplevale Farms, Inc. v. Koch Foods,
Inc., No. 1:16-cv-08637 (N.D. Ill.). According to
the complaint, the named defendants controlled
90 percent of the U.S. broiler market. During the
period of the purported broiler reductions, broiler
market prices rose approximately 50 percent while
at the same time, feed costs — a primary expense
in raising broilers — fell approximately 20 to 23
percent. Plaintiffs contend this dramatic rise in prices
is directly attributable to the defendants’ purported
conspiracy to reduce broiler supply.
The case is based on statements that processors
made at various industry meetings and public and
private communications starting in 2008, in which
individual processors allegedly encouraged the
rest of the industry fall in line and reduce supply.
Plaintiffs claim that defendant Argi Stats aided
the alleged conspiracy by providing producers
detailed information about the broiler producers’
businesses and facilities, allowing the broiler
producers to identify easily one another’s costs and
prices. The complaint identifies over 40 purported
supply reductions by defendants between January
2008 through August 2012. Finally, to enforce the
purported conspiracy, the complaint alleges that
defendants policed each other and made sure all
companies were complying with the production cuts
through the use of a private agricultural statistics
and data collection company. Three additional direct
purchaser class actions were filed in September and
October 2016, as well as an indirect purchaser class
action in September. Chicken farmers have also
initiated their own case against the processors.
Direct purchaser have settled with Fieldale Farms
Corp., for $2.25 million. Some state law claims
have been dismissed, but defendants’ motions
to dismissed were generally denied. Most of the
remaining cases have proceeded to the discovery
phase.
Broilers
In the most recent case, September 2016, a putative
class of direct purchasers of broiler chickens filed
suit in federal court in Chicago against 13 of the
largest domestic broiler processors for alleged
violating Section One of the Sherman Act beginning
in January 2008 when the processors purportedly
started to jointly reduce broiler production in order
Jetta Sandin is an associate and
focuses her practice on antitrust and
competition matters. She can be
reached at 202.778.3020 or jsandin@
porterwright.com.
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