Law Street Media

District Court Says Case Against Peanut Giants Will Continue

Peanuts in a bowl on a wodden table, surrounded by peanuts and shells.

Peanuts in small wooden bowl on natural rustic desk.

A court in the Eastern District of Virginia ruled against the dismissal of an antitrust complaint against two large peanut companies, nullifying their motions to dismiss. The court said in its opinion and order that “the matter is ripe for disposition” and a hearing on the motions are unnecessary. Birdsong Corporation and Golden Peanut Company LLC allegedly engaged in price-fixing.

“Because price fixing constitutes a per se violation of the Sherman Act, the only question is whether the Complaint contains sufficient facts to support the inference that a price-fixing conspiracy existed between the Defendants,” the court stated in the order. They said the complaint matches the standard of an argument that can be plausibly inferred and should be considered further.

The case began in September 2019 when a class action complaint was filed against the peanut companies. Birdsong and Golden Peanut Company sell raw peanuts to the plaintiffs and the class, who process and sell the peanuts to food companies or manufacturers. The complaint claimed the defendants facilitate price-fixing to “depress the price of Runner peanuts.” The two companies control 80 to 90 percent of the market share.

The plaintiffs accused Birdsong and Golden Peanut Company of coordinating and manipulating reports to show a larger supply of peanuts causing a distortion in price data. The court ruled that the complaint has sufficient allegations to state a claim. The order nullifying the motions to dismiss cited that the complaint contained a motive.

The defendants filed separate motions to dismiss the case on October 21, 2019. They argued there was a failure to state a claim, but the court ruled that the plaintiff’s argument did meet the legal standard. “While none of the Complaint’s allegations are sufficient to state a Section 1 claim when considered in isolation, the totality of the factual assertions within the Complaint give rise to the plausible inference of a price fixing conspiracy,” the complaint stated.

The plaintiffs, including D&M Farms, Mark Hasty, Dustin Land, Rocky Creek Peanut Farms LLC, Daniel Howell, L&K Farms Group LLC, Lonnie Gilbert,  are represented by Durrette Arkema Gerson & Gill. The Birdsong Corporation is represented by Kaufman & Canoles and Golden Peanut Company LLC is represented by Kirkland & Ellis.

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