A federal judge ruled an appellate court needs to weigh in on whether Dutch lender Rabobank, one of the world’s largest financial institutions, can be sued as part of the massive antitrust proceedings linked to allegations poultry producers fixed the price of chickens.
In August, U.S. District Judge Thomas M. Durkin signed off on a settlement between Pilgrim’s Pride and attorneys representing a class of potentially many millions of Americans. Worth about $75.5 million, that deal resolved the largest remaining case in a collection of class action lawsuits that, combined, equaled about $181 million in payments from producers to consumers. Tyson Foods agreed to pay $99 million, the largest single amount to settle the class action against it.
U.S. District Judge Thomas M. Durkin
| Law.depaul.edu
Since 2016, chicken producers have defended themselves against several antitrust lawsuits, divided between those brought by direct buyers, such as supermarkets and other resellers, and end users, including restaurants and consumers.
The litigation incorporates similar allegations: Chicken producers allegedly boosted profits by sharing internal data to work together to suppress supply in order to elevate prices, even as the price of feed and other costs of raising the birds dropped.
The Pilgrim’s Pride settlement came June 1, several weeks after Durkin granted Rabobank’s motion to dismiss allegations the bank conspired with the poultry defendants. In that opinion, Durkin said the allegations against Rabobank were similar to those the class leveled against Agri Stats, an industry publication, as the plaintiffs accused it of being a co-conspirator for its role as an information conduit.
Durkin denied a motion to dismiss from Agri Stats, writing “it is at least plausible (if not likely) that a person who facilitates a conspiracy knows about the conspiracy and engages in the facilitation knowing of its consequences.”
Although Rabobank didn’t dispute its frequent communications across the poultry industry, as perhaps the largest lender to producers, Durkin said the plaintiffs’ lawsuit against the financial institution amounted to an attempt to “chase ghosts.” There is a record of emails between the bank and some of the defendant producers, Durkin said, but that alone is insufficient.
“The emails are entirely ambiguous as to the subject matter of the communications they reference,” Durkin wrote in 2021. “Without knowing this information, plaintiffs are asking the court to infer that Rabobank knew about and communicated with defendants about the alleged conspiracy from the unsurprising and unsuspicious fact that Rabobank communicated with defendants. There are too many inferences in that chain of reasoning for it to retain plausibility.”
In an opinion issued April 29, Durkin granted a motion from several corporate plaintiffs to enter final judgment of his dismissal in order for them to file an immediate appeal. Among those corporations are Campbell Soup, John Soules Foods, Sysco, Target and US Foods.
“Appeal should be permitted here because the parties and the court would benefit from certainty regarding whether Rabobank will be a party in this case,” Durkin wrote. “This case is a highly complex antitrust matter; is more than five years old; has suffered delays due to a related criminal investigation and the pandemic; but is now on course for an initial trial in the fall of 2023. Uncertainty as to Rabobank’s role in this case is an additional complication that should be avoided.”
In arguing against the motion, Rabobank claimed a “significant factual overlap” between “the dismissed claims against Rabobank and the remaining claims in this litigation,” but Durkin said there exists only “a significant relationship between the claims.”
Durkin further rejected Rabobank’s concerns about summary judgment to other defendants mooting the appeals process, as well as an argument the ruling would initiate a slippery slope of piecemeal appeals. Durkin said although there are “isolated possibilities” of individual dismissals or summary judgment, such rulings would be closer to a trial date. That would undercut the certainty of final judgment, and Durkin said he doesn’t anticipate those potential outcomes being a burden on him or an appellate court.
The companies seeking the appeal have been collectively represented by attorneys Scott E. Gant, Jonathan M. Shaw, Sarah L. Jones, Colleen A. Harrison and Ryan T. McAllister, of the firm of Boies Schiller Flexner, of Washington, D.C.; Armonk, New York; and Albany, New York.
Rabobank has been represented by attorneys David J. Doyle, Jill C. Anderson, Andrew C. Nordahl and Matthew T. Connelly, of the firm of Freeborn & Peters, of Chicago.