While many of their competitors have chosen to pay hundreds of millions of dollars to trial lawyers and their clients, poultry producer Sanderson Farms appears to have won a key round in their fight to defend themselves against accusations they conspired to artificially inflate chicken prices, after a jury found in favor of the company at trial.
The jury delivered its verdict on Oct. 25 in Chicago federal court, ending a six week trial over claims that Sanderson Farms should pay for its alleged violations of federal antitrust law.
Following the trial, representatives of Oakwood, Georgia-based Sanderson said the verdict demonstrates that the accusations against the company don't hold up under the evidence.
"The evidence presented over the last six weeks is clear: Sanderson Farms and the broiler industry did not conspire to produce less chicken," said Jeremy Kilburn, the company's chief legal & compliance officer, in a prepared statement.
"To the contrary, Sanderson Farms built more plants than the rest of the industry combined and grew more than any of its competitors before, during and after the period of Plaintiffs’ alleged supply reduction conspiracy. In a time of industry crisis, during which several major chicken producers went bankrupt, Sanderson Farms made independent business decisions to reduce its losses - as any rational business would.
"Today’s verdict vindicates Sanderson Farms and shows that the Plaintiffs’ case ignored fundamental truths about Sanderson Farms and the nature of the chicken industry.”
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 artifically drive up prices.
The U.S. Department of Justice has launched its own investigation into the matter, as well.
The sprawling proceedings were centralized in Chicago federal court before U.S. District Judge Thomas M. Durkin.
The proceedings were divided into three separate class action tracks: One, represented so-called "direct purchasers," like retail supermarkets and food suppliers; "indirect purchasers," including restaurants; and "end users," or ordinary consumers who buy chicken from stores and restaurants.
To date, a large and growing number of poultry producers have opted to settle, generating headline-grabbing payouts in the process.
Attorneys for the end users, for instance, racked up a $181 million deal to end that segment of the proceedings. A federal appeals panel, however, threw the distribution of that settlement into question, as they said Durkin needed to do more work to back up his decision to allow plaintiffs' lawyers to claim $57 million in fees.
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 those settlements.
However, at the time those most recent settlements were announced, Sanderson Farms had opted to become the first defendant accused in the matter to defend itself at trial before a jury.
At trial, plaintiffs' lawyers told jurors the evidence clearly indicated that Sanderson had conspired with other chicken producers to restrict supply of chicken and drive up prices at a time plaintiffs claimed chicken prices should have been lower. To back those claims, plaintiffs produced communications they said indicated producers had "signaled each other about supply conditions and the need for ongoing supply restrictions" as far back as 2008, in emails and public statements, at trade association meetings, and at "social events," including hunting and fishing trips shared by executives of the companies.
They asserted Sanderson "knowingly became a member of the conspiracy," and alleged the company had made decisions that "cut against its unilateral interest," but worked to collectively drive up chicken prices across the board.
Jurors sided with Sanderson, ruling unanimously after a day of deliberations that Sanderson Farms did not participate in the alleged conspiracy to drive up chicken prices.
"As an independent company, Sanderson Farms was steadfast in its position that its conduct had always been lawful," the company said in a statement following the verdict. "The combined team of Wayne-Sanderson Farms fully shares in that view. The evidence at trial proved that Sanderson Farms did not conspire with anyone to produce less chicken, and that Sanderson Farms, under its former leadership, acted lawfully."
Sanderson Farms sells chicken under the additional brand names of Covington Farms, Wayne Farms, Platinum Harvest, Chef's Craft and Naked Truth.
Plaintiffs have not yet indicated if they will appeal the verdict, and they have yet to file any post-trial motions. However, they indicated in a motion filed before the verdict that they disagreed with certain decisions made by Judge Durkin concerning whether to allow certain evidence to be presented to the jury.
Plaintiffs in the direct purchaser action included supermarket giants, including Kroger, Albertsons, Hy-Vee, Meijer, Publix, Winn-Dixie, Wholesale Grocers Inc., Piggly Wiggly and Schnuck's, as well as Wisconsin and Chicago area supermarket chain Woodman's.
They were represented by attorneys from the firms of Lockridge Grindal Nauen, of Minneapolis; and Pearson Warshaw LLP, of San Francisco and Sherman Oaks, California, serving as co-lead counsel.
Other firms representing direct purchaser plaintiffs included: Hart McLaughlin & Eldridge, of Chicago; Lite DePalma Greenberg & Afanador, of Philadelphia; Freed Kanner London & Millen, of Lincolnshire; Spector Roseman & Kodroff, of Philadelphia; Sperling & Slater, of Chicago; Kenny Nachwalter P.A., of Miami; Ahern & Associates, of Chicago; Sherrard Roe Voigt & Harbison, of Nashville, Tennessee; Polsinelli P.C., of Chicago and Kansas City; Kaplan Fox & Kilsheimer, of New York; Cera LLP, of San Francisco and Boston; Lifvendahl Law, of Northfield; The Coffman Law Firm, of Houston; Haynsworth Sinkler Boyd, of Greenville and Columbia, South Carolina; and Marcus & Shapira, of Pittsburgh.
Sanderson Farms was represented by attorneys Chris Ondeck, Colin Cabral, Kyle Casazza and Shawn Ledingham, of Proskauer Rose, of Los Angeles and Washington, D.C.
Editor's note: This article has been revised to correctly list the attorneys who represented Sanderson Farms at trial. A previous version incorrectly identified the company's legal counsel in the antitrust matter.