Pilgrim’s Pride Corporation filed three motions to dismiss, for the corporation and CFO Fabio Sandri, former CEO William Lovette, and current CEO Jayson Penn, in the District of Colorado on Monday after shareholders alleged violations of the Exchange Act. The class action lawsuit claimed that a price-fixing conspiracy led to a sharp downturn in Pilgrim’s Pride’s stock prices.
The defendants first took aim at the plaintiffs’ claim that “statements [Pilgrim’s made] concerning its performance were false and misleading” by noting that “anticompetitive conduct in the plea agreement involved three contracts with a single customer that impacted $361 million of sales” and that “less than 1% of its sales does not support Plaintiffs’ unspecified, broad-brush assertion that an antitrust conspiracy constituted the “true” driver of all of the Company’s financial performance during the Class Period.”
Furthermore, the defendants claimed that the plaintiffs failed to allege that Pilgrim’s executives “engaged in any anticompetitive conduct — or (were) even aware of any continuing wrongdoing.” Finally, the defendants proffered that the plaintiffs did not establish loss causation since Pilgrim’s “fully disclosed that there was ongoing litigation alleging that Pilgrim’s had been involved in antitrust violations” and that the market was “aware” well before the stock price significantly decreased.
Jayson Penn noted that the Class Period was from 2012-2017, and that the complaint “alleged no underlying wrongdoing by Penn” when he served as CEO from 2019-2020. He also claimed the plaintiffs attempted to “plead Penn’s scienter based on statements he made several years after the underlying misconduct” which supposedly does not meet the burden to plead scienter under the Private Securities Litigation Reform Act (PSLRA).
William Lovette claimed that the complaint “is virtually devoid of allegations involving Mr. Lovette, rendering the claims against him insufficient to sustain a private cause of action under the Exchange Act.” The defendant countered his charge by saying that the complaint “trie[d] to tie generic public statements made by Mr. Lovette to two pre-2017 conversations involving Mr. Lovette, which Plaintiff speculates related to alleged anticompetitive behavior occurring before the class period.”
Pilgrim’s Pride and Fabio Sandri are represented by Weil, Gotshal & Manges LLP and Lewis Roca Rothgerber Christie LLP. William Lovette is represented by Moore & Van Allen PLLC and Jayson Penn is represented by O’Melveny & Myers LLP and Davis Graham & Stubbs LLP.
