CHICAGO — Poultry producer Pilgrim’s Pride has reached another multimillion-dollar settlement agreement to end a class action regarding price fixing allegations, this time agreeing to pay $75.5 million to an untold number of consumers, restaurants and other "end users" who purchased their chicken products.
On Aug. 5, attorneys for the plaintiffs suing Pilgrim's Pride asked U.S. District Judge Thomas Durkin to grant preliminary approval to settling consolidated class actions, noting other producer defendants reached settlements with end-user class plaintiffs earlier this year totaling $104.5 million. Pilgrim’s Pride and Tyson also reached a $155 million settlement in the spring with direct purchasers, dwarfing a $15 million settlement smaller producers reached in similar litigation.
The allegations in all the actions are similar: Poultry producers internally shared data, agreeing to suppress supply so demand and prices would remain high, while production costs were decreasing, notably those related to feed, thereby boosting profits.
According to the memorandum in support of approval, the $75.5 million Pilgrim’s Pride settlement joins with a $1 million settlement involving several entities under the Mar-Jac Poultry name, which represents about 0.2% of the end user market. The plaintiffs asked Durkin to issue an order joining those two settlements with the first four for purposes of notifying class members. Those firms and settlement amounts are Fielddale, $1.7 million; Peco, $1.9 million; George’s, $1.9 million, and Tyson, $99 million.
Representing the end users is attorney Steve Berman and others with the firms of Hagens Berman Sobol Shapiro, of Berkeley, Calif., and Cohen Milstein Sellers & Toll, of Washington, D.C. They say they have collected more than 32 million customer email addresses by issuing subpoenas to retailers and expect more soon from Costco and other stores. They also noted a pending motion to compel such information from Target and indicated plans for “a robust online campaign” to find other class members by directing them to the website, Overchargedforchicken.com, along with other efforts.
The end users’ lawyers, appointed lead counsel for the class in December 2016, say they worked with firms representing the other classes and “collected over eight million documents, taken over 180 depositions of defendants’ employees and third parties, and collected and analyzed voluminous structured data.”
Common allegations concern chickens known as broilers — those to be slaughtered before reaching 13 weeks — which constitute 98% of all chicken meat sold in the U.S. Producers allegedly Agri-Stats, a publication available only to the producers and which regularly updates the conditions of the poultry market, to privately share information. The scheme allegedly drove up prices about 50% since 2008, even though input costs, like feed, dropped 20-23% in the same window.
While the civil litigation was proceeding, the U.S. Department of Justice filed criminal charges against three Pilgrim’s executives. The company admitted to price fixing in 2020 and will pay $110.5 million in criminal penalties.
According to the motion for settlement, Pilgrim’s has 21.5% of the end user market, so the running total of settlements equates to $3.6 million per share point. As such, the overall value of the case could reach $360 million when factoring 12 defendants that have yet to settle.
In addition to paying into the settlement fund, Pilgrim’s also will provide up to three employees as trial witnesses, won’t oppose deposition of eight specified individuals, will respond to the class’ questions and help it understand and authenticate the data it produced. Pilgrim’s also will meet with class lawyers for seven hours to describe facts relevant to the allegations, including information given to the DOJ and other government investigators.
Pilgrim's Pride is represented by attorneys Alli G. Katzen, and others with the firm of Weil, Gotshal & Manges, of Miami; and Michael L. McCluggage, of Eimer Stahl LLP, among others.