Antitrust lawsuits are frequently filed against companies in the meat industries, specifically against companies who process and pack the meat. While many farms and companies raise the animals for meat, few companies process the meat and distribute it to stores and restaurants. According to the North American Meat Institute, the meat industry employs over 500,000 people in the United States who feed and care for animals, process the meat, and handle transportation. The average American reportedly spends 1.3 percent of their “disposable personal income” on meat.
According to an analysis conducted using Docket Alarm’s analytics tools, federal antitrust lawsuits have been filed consistently against some of the nation’s largest meat processors, defined here to include Tyson Foods, Pilgrim’s Pride, Wayne Farms, JBS, Cargill, Sanderson Farms, Hormel Foods, Smithfield Foods, and industry data aggregator Agri-Stats. Nearly every month since January 2019 one or two antitrust lawsuits have been filed against the companies, with an average of just under one a week.
The filings against the nine companies for anticompetitive activity typically rise in the summer months. At least 88 cases have been filed in federal courts against the companies since the beginning of January 2019.
In the United States, meatpacking companies process “33.6 million head of cattle, 587,000 calves, 129.9 million hogs and 2.23 million sheep and lambs into more than 55 billion pounds of beef, pork, lamb and veal,” according to the Institute. Poultry processors yearly take in 9.34 billion chickens creating almost 50 billion pounds of meat. The institute reported a sales total of $152.5 billion in meat and $65.6 billion in poultry.
The industry has long encountered allegations of anticompetitve activity, due to the small number of companies participating. A 1981 article in The Business History Review by two economics professors at Loyola University of Chicago discussed a consent decree in a beef antitrust case in 1920 which was later overturned in 1954. In a 1996 address, then-Assistant Attorney General Anne K. Bingaman said about the meatpacking industry, “concentration in this industry has increased significantly over the last 15 years, and we have been monitoring this industry on an ongoing basis since before I arrived.” She said the Department of Justice had made several investigations into the industry in the last few years.
Shortly after the COVID-19 pandemic began, meatpacking plants started to receive criticism for keeping plants open. According to the Food Truck Empire, the industry accounts for about 5.6 percent of the United States GDP and the pandemic brought more attention to how much consumers rely on the industry to provide protein.
Although the antitrust lawsuits against players in the meatpacking industry are filed around the United States, most of the lawsuits, especially those concerning broiler chickens, have been moved into the Northern District of Illinois where Judge Thomas Durkin has been assigned as the judge in over 20 antitrust lawsuits in the last two years and oversees at least one large consolidated case about broiler chicken antitrust. Judge John Tunheim with the Minnesota District Court is also overseeing many antitrust meat lawsuits, he has heard about 10 of the cases. Other judges were assigned three or fewer antitrust suits.
Here’s a deep dive into Docket Alarm’s available analytics on five of the top meat processing companies who have been served with antitrust lawsuits since 2019.
Tyson Foods has been the defendant named most frequently, and was sued in at least 60 of the 88 cases. One reason they are involved in the most lawsuits could be the company’s reach into multiple industries with meat plants designed and used to process various animals, particularly chicken and beef, the two animals seen most frequently in recent antitrust lawsuits. In the last two years, the company has been sued an average of 2.7 times each month.
According to Docket Alarm data, Tyson retained Dykema Gossett, Perkins Coie, Axinn Veltrop & Harkrider for its cases.
There are currently more antitrust lawsuits being filed in the chicken industry than other meat industries. Especially frequent are suits related to broiler chickens, which are bred specifically for meat rather than eggs. Pilgrim’s Pride has been labeled a defendant in at least 44 antitrust lawsuits in recent years. The company is one of the largest chicken producers in the United States, and is owned by JBS, a major beef and pork processor which has also been involved in many of its own antitrust lawsuits.
The company has received lawsuits from investors, restaurants, and others in the chicken industry including “growers,” who contract with processing companies to raise chickens for them. Lawsuits against this group rose recently, with six lawsuits filed in September against groups of chicken processing companies, more than any single month in the previous two years. Most of these lawsuits are filed or transferred into the Illinois Northern District, where 33 of these cases are located, 19 of which are being heard by Judge Durkin. The following graph shows the number of cases filed in the Northern District Illinois Court compared with the number where Pilgrim’s Pride is listed as a defendant.
Pilgrim’s Pride’s representation has varied each year, with Weil, Gotshal & Manges being the only firm to represent the company in 2019 and 2020. Outside of that firm, Adsuar Muniz Goyco Seda & Perez Ochoa PSC represented the company in two cases in 2019, Whiteford Taylor and Preston represented them in 2019, and three firms, Kasowitz Benson Torres, Lewis Roca Rothgerber Christie Lip, and Richilano Shea each represented Pilgrim’s Pride for one lawsuit in 2020.
Cargill has been sued 14 times as Cargill and 12 times as Cargill Meat, although most, if not all, of the filings against Cargill Meat included both parties. Cargill is primarily involved in antitrust lawsuits related to beef, but it also produces turkey, chicken, and egg products according to its website. Four of the lawsuits were filed in the summer of 2019, but filings against the company have been relatively consistent since then with about one antitrust lawsuit being filed every other month.
Recent lawsuits against the company and other beef processors have come from grochers and a sandwich chain. A consolidated case where farmers who raise cattle alleged antitrust activity in the beef industry was dismissed recently, however, the plaintiffs are planning to file an amended complaint. Cargill has been represented primarily by Greene Espel PLLP and Mayer Brown in antitrust lawsuits. The company was also represented by Dykema Gossett and Jones Day in cases filed in 2019.
Agri Stats, Inc.
Outside of Tyson Foods, Agri Stats is the most frequent defendant seen in meat industry antitrust lawsuits. The company has been accused of allowing companies to participate in anticompetitive activity because its reporting system provides a system for the companies to share information with each other about prices. The information is not necessarily linked to companies, however, lawsuits allege that it is not hard to determine from the data which company it represents. The company has received 47 antitrust lawsuits in the last two years dealing with the meat packing industry. Twenty of the lawsuits are before Judge Thomas Durkin and an additional eight are located with those in the Illinois Northern District.
The company, according to its website, began in 1985 and is meant to be “a way to help industry participants make informed decisions based on accurate user data; delivered in a timely manner, and with the utmost confidentiality.”
Agri Stats is accused of facilitating the antitrust activity because it allows industry partners to view current sales and production prices and adjust, reportedly helping industry members fix prices or compare production with other facilities and reduce production to raise prices.
The company is represented in antitrust lawsuits by Hogan Lovells; Miller, Canfield, Paddock and Stone; Dykema Gossett; and Faegre Drinker Biddle & Reath.
An indictment in a criminal case regarding the anticompetitive broiler chicken activity was filed against four executives of Pilgrim’s Pride, Jason Jeffrey Penn the CEO, Mikell Reeve Fries, Scott James Brady, and Roger Born Austin, in the Colorado District Court. Later, six additional people were added to the investigation, some of which were also associated with Pilgrim’s Pride According to the indictment, if they are convicted the individuals could face up to 10 years in jail and a $1 Million dollar fine. Businesses could face a 100 million dollar fine. Pilgrim’s Pride announced on October 14th that it had entered a plea agreement with the U.S. Department of Justice resolving claims and paying a fine of over $110 million.
Law Street previously reported Tyson’s response to the indictment, they claimed to have “immediately self-reported” all antitrust activity information to the Department of Justice and is “committed to competing vigorously, honestly, and in compliance,” with antitrust laws.
Investigations by the Department of Justice could have the ability to delay other cases filed by consumers, restaurants, grochers, and others involved in the meat industry. In early September, the DOJ submitted a letter to Judge Durkin who oversees a plurality of the broiler chicken antitrust lawsuits stating that although it is not requesting a stay in discovery at this point, it could in the future if the discovery could interfere with its criminal investigations.
Various state attorney generals and senators have asked Attorney General William Barr to look into further antitrust activity in the meatpacking industry in general.
Allegations of anti-competitive activity are not new. Although it is clear that many complaints are being filed right now, there is no way to accurately assume their outcome from looking at past cases. Many lawsuits are ongoing and Agri Stats is a recently added player in the industry noted in most new complaints. During the pandemic, the pace of this litigation has remained on track.
The analytics in this article are powered by One-Click Analytics from Docket Alarm. To learn more, schedule a demo with the Docket Alarm team.