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AgriStats asks judge to dismiss federal lawsuit over chicken prices

By MICHELE F. MIHALJEVICH

Indiana Correspondent

 

CHICAGO — Agri Stats, Inc., a Fort Wayne-based company, has asked a judge to dismiss a federal lawsuit filed against it as a part of class-action litigation alleging a conspiracy to fix the price of chicken.

The lawsuit was filed Sept. 2, 2016, in the U.S. District Court for the Northern District of Illinois by Maplevale Farms, Inc., an independent food service distributor in Falconer, N.Y. The suit was brought against several chicken processors, including Tyson Foods, Inc., Pilgrim’s Pride Corp. and Perdue Farms, Inc. The plaintiffs alleged the defendants conspired to cut production levels of broiler chickens in order to cause prices to rise. Agri Stats was originally listed as an agent and/or co-conspirator, but was later named a defendant.

Maplevale said it filed the suit for itself and for others who had purchased broilers from the defendants or their subsidiaries from Jan. 1, 2008, to the time of the suit.

Agri Stats was founded in 1985 and provides a subscription-only information service to those in the poultry, commercial egg and swine industries. The poultry data gathered by the company comes from poultry processors. Agri Stats strives to “improve the bottom line profitability for our participants by providing accurate and timely comparative data while preserving the confidentiality of individual companies,” according to its website.

Agri Stats and several other defendants requested the lawsuit be dismissed Oct. 18. Attempts by Farm World to reach Agri Stats officials or their attorney for comment were unsuccessful. Agri Stats and the other defendants have denied the lawsuit’s claims against them in various court filings.

Over the summer, the U.S. Department of Justice (DOJ) intervened in the civil case. In a motion filed June 21, the agency said it had begun a criminal investigation into the price fixing claims.

“Although the public also has an interest in the ‘prompt disposition of civil litigation’, that interest is generally outweighed by the public’s interest in effective criminal law enforcement,” the DOJ’s motion said. The department asked Judge Thomas M. Durkin to stay discovery for six months. Durkin later granted a three-month stay.

In the original lawsuit, the plaintiffs said that beginning as early as January 2008, the defendants conspired to “fix, raise, maintain and stabilize the price of broilers” by coordinating output and limiting production with the “intent and expected result of increasing prices of broilers in the United States. In furtherance of their conspiracy, defendants exchanged detailed, competitively sensitive and closely-guarded non-public information about prices, capacity, sales volume and demand, including through third party co-conspirator Agri Stats.”

The broiler industry provides more than $30 billion in annual wholesale revenue, the lawsuit said.

Agri Stats previously filed for a dismissal in March 2018, saying, “Agri Stats does not produce broiler chickens, sell broiler chickens or benefit when the price of these chickens rises. But a handful of opt-out plaintiffs and a putative class of end users now claim that Agri Stats intentionally joined a conspiracy to reduce the output of broiler chickens so that broiler prices would rise. (The) plaintiffs’ theory that Agri Stats exposed itself to potentially massive antitrust liability despite the lack of financial benefit to Agri Stats is not only implausible but also economically irrational.”

The plaintiffs don’t identify any plausible motive for why Agri Stats would have joined the alleged conspiracy, the Agri Stats filing noted. “(They) do not allege any actions by Agri Stats indicating a conscious commitment to an agreement to reduce broiler output. At most, plaintiffs’ allegations amount to mere theories of how other broiler producer defendants might have used Agri Stats’ data.”

Durkin denied the motion Feb. 28, 2019. In his ruling, the judge said, “Plaintiffs plausibly alleged facilitation by alleging that Agri Stats’s reports are so detailed that the ostensible anonymity of the information is breached and defendants were able to use the reports to communicate their broiler intentions, thereby conspiring to fix broiler prices.”

11/7/2019