Plaintiffs who alleged that the largest poultry companies conspired to limit the supply and drive up the price of chicken cited “no evidence” that Foster Farms ever took part in any such conspiracy, a federal judge decided.
In a recent decision in the U.S. District Court for the Northern District of Illinois, Judge Thomas M. Durkin cleared Foster Farms, as well as five other poultry producers of those allegations brought against them in a series of class-action lawsuits.
Other companies in which Durkin found no evidence or insufficient evidence included poultry integrators Perdue Farms, Wayne Farms, Case Farms, Claxton Poultry and Fieldale Farms. Agri Stats, which provides benchmarking reports for the broiler industry, was also cleared of such allegations.
Article about production cuts ‘hearsay’
In his decision, Durkin brought attention to the fact that plaintiffs accused Foster Farms of taking part in a conspiracy, because in 2010, a spokesperson for the company told a meat industry publication that it “decided it would not increase production at its Farmerville, La., poultry complex, as earlier planned. The plaintiff’s further alleged that this public statement could be construed as “sharing plans” with its competitors, inferring that as evidence that it agreed to join the alleged conspiracy. Durkin argued that that statement was not from a Foster Farms document, but rather a news article from trade media. That article did include quotes that were reportedly emailed to the publication.
Durkin, however, disagreed that anything in that news report could be construed as evidence Foster Farms took part in a conspiracy.
“This is hearsay and the court will not consider it,” Durkin wrote. “In any case, Foster making a public statement to industry media about its plans that is not plainly directed at its competitors, is, by itself, an insufficient basis to infer that Foster joined a conspiracy.”
Reduction in breeding stock orders doesn’t imply conspiracy
The plaintiffs also cited an email from poultry breeding stock company Cobb-Vantress to Tyson Foods, its parent company, that it experienced customer cutbacks in 2011, and those included cutbacks from Foster Farms.
Again, Durkin dismissed this as hearsay.
“It is merely evidence that Foster cut production in parallel with other defendants. It is not evidence that Foster communicated with its competitors about these cuts. It is therefore not evidence that Foster’s cuts were the result of a conspiracy to restrict supply,” Durkin stated.
Subscribing to Agri Stats services not indicative of conspiracy
The fact that Foster Farms received benchmarking reports from Agri Stats, the plaintiff’s argued, could be considered a “plus conduct” sufficient to establish that Foster Farms took part in a conspiracy.
Durkin, however, disagreed and stated that he saw value in Agri Stats’ services.
“The court would be hard-pressed to find that deanonymizing Agri Stats reports alone would be sufficient evidence to reasonably infer a conspiracy. Attempting to deanonymize Agri Stats reports is simply a rational response of competitors trying to gain an advantage over each other,” Durkin wrote.
“Plaintiff’s argument boils down to the idea that it is irrational to divulge detailed information to Agri Stats knowing that your competitors can deanonymize it and use it against you. But what is irrational is to refrain from participation in Agri Stats when all your competitors are doing so. Greater information exchange alone does not demonstrate a conspiracy.”
Foster Farms declines to comment
When contacted by WATT Global Media for a comment on the judgement, a spokesperson for the company responded: “We don’t comment on litigation, regardless of outcome.”
