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Pork price-fixing lawsuit revived

TAGS: Business
Pork price-fixing lawsuit revived
Case represents consolidation of 13 separately filed putative class actions against several large pork companies.

A federal judge in Minnesota has reopened lawsuits alleging that several large pork companies engaged in a price-fixing scheme from at least 2009 and continuing to the present day. The case represents the consolidation of 13 separately filed putative class actions against Smithfield, Tyson Foods, Hormel Foods, Clemens Food Group, Seaboard Foods, Triumph Foods, Indiana Packers, JBS and Agri Stats.

There are three categories of class action plaintiffs who purchased, either directly or indirectly, pork products from one of the defendants. All three allege that defendants engaged in a price-fixing conspiracy to artificially constrict the supply of pork products in the domestic U.S. market.

Last year, the court granted a motion to dismiss without prejudice to the defendants against the three class complaints, giving plaintiffs 90 days to refile their amended complaints.

The plaintiffs refiled their amended complaints, and the defendants brought two joint motions. Court documents also stated that two related cases subsequently had been combined with this action: Winn-Dixie Stores Inc. et al. vs. Agri Stats Inc. et al. and Puerto Rico vs. Agri Stats Inc. et al. The former was brought by two direct-purchaser grocery chains, Winn-Dixie and Bi-Lo; the latter was brought by the Commonwealth of Puerto Rico.

The plaintiffs allege that, from at least 2009 and continuing to the present day, the defendants, which together control more than 80% of the wholesale pork integration market, began to conspire to “fix, raise, maintain and stabilize the price of pork” and that this was accomplished “by coordinating output and limiting production with the intent and expected result of increasing pork prices in the United States.”

The lawsuits claim that the defendants were able to carry out this conspiracy in two ways. First, “defendants exchanged detailed, competitively sensitive and closely guarded non-public information about prices, capacity, sales volume and demand through their co-conspirator, defendant Agri Stats.” Second, plaintiffs allege that the defendants were able to carry out the conspiracy through public statements aimed at one another regarding the need to cut production.

“These statements served a signaling purpose and emphasized to one another that solidarity existed. Defendants then furthered the conspiracy by taking individual action to cut supply or limit supply increases that would have otherwise occurred in an unmanipulated market,” the lawsuits continued.

The court granted a motion to dismiss by Indiana Packers “because plaintiffs fail to adequately plead participation in the parallel conduct by defendant Indiana Packers.”

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