Peanut farmers will receive a $45,000,000 settlement from peanut shelling company Golden Peanut LLC, an Eastern Virginia judge ruled on Monday. Golden Peanut, along with companies Birdsong Corporation and Olam Peanut Shelling Company Inc., is accused of conspiring to suppress competition and pay repressed prices for runner peanuts to farmers in violation of the Sherman Act. Settlements totaling $57,750,000 with Olam and Birdsong were reached in October and November 2020, bringing the total lawsuit settlement to over $1 million.
The class action complaint was initially filed in September 2019 against Golden Peanut and Birdsong, and an amended complaint naming Olam as a defendant was filed in May 2020. Preliminary approval of the settlement with Golden Peanut was granted in March.
According to the suit, Golden Peanut and Birdsong are the two largest peanut shelling companies in the U.S., holding 80 to 90 percent of the market share. Olam is the third largest, and holds at least 10 percent of the market share. As the dominant players in the industry, the defendants dictate the prices paid to farmers, which have remained flat since 2014 despite significant supply disruptions. Plaintiffs allege that the defendants conspired to stabilize and depress runner peanut prices after they experienced drastic weather-related price changes from 2011 to 2013 that made it difficult for them to manage risk and plan for production.
“During the relevant time period, Defendants over-reported Peanut and Runner inventory numbers to the USDA to create the false impression of an oversupplied market,” court documents state. “Defendants capitalized on the perceived oversupply to offer artificially low Runner prices to farmers. Defendants also under-reported Peanut and Runner prices to the USDA to further suppress prices and keep them low and less volatile.”
Golden Peanut is represented by Kirkland & Ellis, Birdsong is represented by Kaufman & Canoles and Olam is represented by Latham & Watkins. The plaintiffs are represented by Durrette, Arkema, Gerson & Gill, Lockridge Grindal Nauen PLLP, Freed Kanner London & Millen LLC and Spector Roseman & Kodroff PC.