Three Lawsuits Claim Leading Supplier of Pork Violated the Sherman Antitrust Act

On Tuesday, three separate complaints were filed by popular restaurant chains in the Southern District of Florida against major pork industry companies, alleging the defendants conspired to increase the price of pork sold in the United States in violation of the Sherman Antitrust Act.

The first complaint was filed by Buffalo Wild Wings, Inc., the second complaint by Jimmy John’s Buying Group SPV, LLC and the third complaint by Sonic Industries Services Inc., and each complaint alleged identical facts and injuries.  The defendants included Agri Stats, Inc., Clemens Food Group, LLC, The Clemens Family Corporation, Hormel Foods Corporation, Hormel Foods, LLC, JBS USA Food Company, Seaboard Foods LLC, Smithfield Foods, Inc., Triumph Foods, LLC, Tyson Foods, Inc., Tyson Prepared Foods, Inc. and Tyson Fresh Meats, Inc.

According to the complaints, Agri Stats, Inc. is a specialized information-sharing service that obtains data from participating industry producers and develops comprehensive reports based on that data. The complaints further state the other defendants, which are referred to as the pork integrator defendants, are the leading suppliers of pork and collectively control approximately 80% of the United States wholesale pork market. 

The first complaint states Buffalo Wild Wings is a Minnesota corporation headquartered in Atlanta, Georgia that provides fast-casual dining and negotiated and contracted with the pork integrator defendants for the production and supply of pork and pork products. According to the second complaint, Jimmy John’s Buying Group is a Delaware limited liability company with its principal place of business in Champaign, Illinois that owns and operates a chain of fast food restaurants in the United States. The complaint further states Jimmy John’s Buying Group also negotiated and contracted with the pork integrator defendants for the production and supply of pork and pork products. Finally, the third complaint states that Sonic Industries is a Delaware corporation headquartered in Oklahoma City, Oklahoma that owns and operates the largest drive-in chain in the United States and negotiated and contracted with the pork integrator defendants for the production and supply of pork and pork products. 

According to the plaintiffs, as early as 2009, the defendants coordinated with each other to restrict the output of pork and pork products with the intention of increasing and stabilizing pork prices in the United States. The plaintiffs allege that the defendants did this by exchanging detailed and competitively sensitive non-public information about prices, capacity, sales volume and demand through the reports produced by their co-conspirator Agri Stats. The plaintiffs argue the information exchanged through Agri Star is not the type of information competitors provide to each other in a normal competitive market. 

The plaintiffs further allege that the Agri Stats reports contained information specific to pork producers and ensured that its sensitive business information was available to the pork integrator defendants and no other buyers in the market. The complaints also state the defendants went to great lengths to keep the conspiracy a secret, the defendants admitted in  public calls that they had discussed production cuts  at least once and publicly signaled to each  other that no supply increases would happen. 

The plaintiffs allege that the defendant’s unlawful and anticompetitive conduct caused them to pay artificially inflated prices for pork they would not have paid in a competitive market. Each complaint alleges a single cause of action for violation of Section 1 of the Sherman Act. The plaintiffs in each complaint are represented by Carlton Fields. A similar large-scale lawsuit alleging the same anticompetitive behavior against the defendant is currently underway in the District of Minnesota.