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Friday, March 29, 2024

Judge blocks 3 firms from trying to pick off clients from broiler chicken class action

Federal Court
Broiler chicken babies

USDA NRCS Texas [Public domain]

A Chicago federal judge has slapped restrictions on three law firms accused of sending misleading and confusing solicitation letters in a bid to pick off potential clients embroiled in a sprawling mass action over the price of chickens.

On Dec. 27, U.S. Magistrate Judge Jeffrey T. Gilbert issued the order against The Coffman Firm, of Beaumont, Texas; and the firms of Kaplan Fox & Kilsheimer, with offices in Chicago, New York, Los Angeles and other cities, and Williams Montgomery & John, of Chicago.

“These communications are misleading, slanted, and potentially confusing to putative class members,” the judge wrote in his order.

“… This is precisely the kind of situation in which a court is justified in imposing limits upon the ability of certain parties and their counsel to communicate with putative class members, particularly with aggressive solicitations of legal representation covering claims that are represented to reach into the hundreds of millions or even billions of dollars.”

The decision arises as the latest in the years-long action against chicken producers, who are accused of conspiring to thin flocks of chickens to artificially inflate the prices of so-called broiler chickens – the most common kind of chickens sold to supermarkets, restaurants and consumers.

The lawsuits brought across the country by a host of retailers and others have resulted in the creation of three potential classes of plaintiffs: so-called direct purchases, such as retail supermarkets; indirect buyers; and end-user consumers.

In the years since the cases were first introduced in 2016 and then consolidated in Chicago federal court, at least one of the defendant chicken producers, Fieldale, has since settled.

However, the litigation continues against many of the largest producers, including Tyson Foods and Pilgrim's Pride.

In more recent months, however, law firms, including several specializing in “complex litigation,” have swarmed to the court action, attempting to sign up some of the potential class members as clients.

The judge noted firms have particularly targeted “direct buyers,” attempting to persuade them to opt out of any potential class action settlements, and instead pursue their own lawsuits – or “direct actions” - for damages, and likely attorney fee awards, of their own.

The communications prompted attorneys appointed by the court to represent the direct purchasers’ class to complain to the judge and ask for an order blocking attorneys from continuing to send the solicitations. Those requests were expressed in a motion filed in July by attorneys with the firms of Hart McLaughlin & Eldridge, of Chicago; Lockridge, Grindal Nauen, of Minneapolis; and Pearson Simon & Warshaw, of San Francisco and Sherman Oaks, Calif., all of whom have been appointed as interim co-lead counsel for the direct purchasers class.

Judge Gilbert largely rejected that request.

However, he said the behavior of the three law firms referenced in his decision was enough to justify an order applied strictly to them.

The judge noted the three law firms, who are representing plaintiff Affiliated Foods, have sent several communications in 2018 and 2019 the judge described as misleading and contradictory.

The judge said the letters misrepresented the status and nature of the proceedings pending in court, pitching supermarket owners and others the “hard sell” that it is in their interest to “opt out of the putative class and hire (Affiliated Foods) Plaintiffs’ Counsel to represent them, and it makes it seem as if such a decision must be made quickly.”

The judge said a 2018 letter “puts forth a one-sided and slanted explanation of the benefits of opting out of the putative class action and becoming a ‘direct action’ plaintiff without articulating any of the burdens, risks, or responsibilities of filing one’s own case.”

“Although (Affiliated Foods) Plaintiffs’ Counsel characterize the putative class as primarily consisting of large sophisticated Chicken purchasers with in-house counsel, there is no evidence that all of the people or entities that received these unsolicited solicitations of legal representation … can be characterized this way,” the judge wrote.

“Moreover, even for sophisticated parties, unsolicited communications fro legal representation like these present a real danger of undermining the legitimate purpose of Rule 23 class actions by, among other things, downplaying the costs, risks, and obligations for companies that opt out of the putative class to pursue their own claims…”

“Dissemination of misleading information about the status of the litigation, the role of the class and non-class plaintiffs in the case, the economic threshold at which it may make sense to pursue an individual non-class claim, and the period for which class and non-class members need to retain purchase and other records relevant to the computation of damages only complicates the management of a large case that presents a host of other case management, proof, and trial challenges.”

While ordering the three firms named in the order to “cease and desist” from sending further unsolicited communications to prospective clients, the judge shied away for now from ordering the sending of a “corrective notice.”

The judge said more information is required before ruling on that aspect of the action.

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