Two of America’s largest poultry producers have agreed to pay a combined $75 million to settle yet another part of a a massive action claiming they joined in a conspiracy to artificially boost chicken prices.
On Oct. 6, attorneys representing a class of supermarkets and other so-called “direct purchaser” retail chicken sellers asked a federal judge to sign off on a new settlement deal with chicken producers House of Raeford Farms and Koch Foods and its affiliates.
Koch Foods, which is headquartered in near northwest suburban Park Ridge, is owned by Chicago native billionaire Joseph Grendys.
Michael H. Pearson
| pswlaw.com
Under the settlements, Koch would pay $47.5 million, while HRF would pay $27.5 million.
Attorneys for the plaintiffs would be able to request up to one-third of that total, or about $25 million, as attorney fees.
Plaintiffs have been represented by attorneys from the firms of Pearson Warshaw LLP, of Sherman Oaks and San Francisco, California; Lockridge Grindal Nauen PLLP, of Minneapolis; and Hart McLaughlin & Eldridge LLC, of Chicago.
The settlement documents filed in the public docket for the case do not state how much the direct purchaser class members can expect to receive from the settlement. A memorandum in support of the motion for settlement states only the funds remaining after the lawyers and settlement administration costs are paid will be distributed on a pro rata basis.
The settlement marks the latest major deal in the long-running court fight.
Since 2016, chicken producers have defended against a wave of collective antitrust suits, all centered on accusations that the producers used internal data supplied from a publication called AgriStats to suppress the supply of chicken and artificially drive up prices.
The U.S. Department of Justice has launched its own investigation into the matter, as well.
The proceedings were centralized in Chicago federal court before U.S. District Judge Thomas M. Durkin.
The proceedings were then divided into class actions on behalf of three groups: the so-called “direct purchasers,” like retail supermarkets; “indirect purchasers,” including restaurants; and “end users,” or ordinary consumers who buy chicken from stores and restaurants to eat.
The different actions have all resulted in large settlements, to date.
Attorneys for the end users racked up a $181 million deal to end that segment of the proceedings. A federal appeals panel in August, however, rejected those lawyers’ attempt to claim $57 million in fees, saying Durkin didn’t put in enough work to demonstrate those fees representing 31% of the settlement, weren’t excessive.
In the direct purchasers’ actions, in 2021, Tyson Foods and Pilgrim’s Pride agreed to pay a combined $155 million, with attorneys claiming $56 million in fees from that settlement.
In the direct purchasers’ new Oct. 6 motions, those attorneys noted the new deals with Koch and HRF bring the total payouts secured from chicken producers to $284 million on behalf of “direct purchasers” who allegedly paid inflated prices for their whole or cut-up birds from 2008-2019.
HRF is headquartered in Rose Hill, North Carolina.