In re Broiler Chicken Antitrust Litig.

290 F. Supp. 3d 772
CourtDistrict Court, E.D. Illinois
DecidedNovember 20, 2017
DocketNo. 16 C 8637
StatusPublished
Cited by74 cases

This text of 290 F. Supp. 3d 772 (In re Broiler Chicken Antitrust Litig.) is published on Counsel Stack Legal Research, covering District Court, E.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Broiler Chicken Antitrust Litig., 290 F. Supp. 3d 772 (illinoised 2017).

Opinion

Honorable Thomas M. Durkin, United States District Judge *779Defendants are industrial producers of chicken meat. Plaintiffs are three putative classes of businesses and individuals who purchased chicken from Defendants, either directly or indirectly, for resale, business, or personal use, between 2008 and 2016. Plaintiffs allege that during that time period Defendants conspired to fix chicken prices higher than the market would naturally support, in violation of the Sherman Act § 1 and state law. Defendants have moved to dismiss for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). See R. 279; R. 292.2 For the following reasons, the motions are denied to the extent that Plaintiffs' Sherman Act claims survive, at least one state law claim survives in every jurisdiction except for Arkansas, and none of the defendants are dismissed from the case entirely. The motion addressing Plaintiffs' state law claims, R. 292, is granted in part in that all claims under Wisconsin law are dismissed.

Legal Standard

A Rule 12(b)(6) motion challenges the sufficiency of the complaint. See, e.g., Hallinan v. Fraternal Order of Police of Chi. Lodge No. 7 , 570 F.3d 811, 820 (7th Cir. 2009). A complaint must provide "a short and plain statement of the claim showing that the pleader is entitled to relief," Fed. R. Civ. P. 8(a)(2), sufficient to provide defendant with "fair notice" of the claim and the basis for it. Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). This standard "demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). While "detailed factual allegations" are not required, "labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly , 550 U.S. at 555, 127 S.Ct. 1955. The complaint must "contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.' " Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 (quoting Twombly , 550 U.S. at 570, 127 S.Ct. 1955 ). " 'A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.' " Mann v. Vogel , 707 F.3d 872, 877 (7th Cir. 2013) (quoting Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 ). In applying this standard, the Court accepts all well-pleaded facts as true and draws all reasonable inferences in favor of the non-moving party. Mann , 707 F.3d at 877.

Background

I. The Chicken Industry

"Broilers" are "chickens raised for meat consumption to be slaughtered before the age of 13 weeks, and which may be sold in a variety of forms, including fresh or frozen, raw or cooked, whole or in parts, or as a meat ingredient in a value added product, but excluding chicken that is grown, processed, and sold according to halal, kosher, free range, or organic standards." R. 212 ¶ 79. Broilers constitute approximately 98% of all chicken meat sold in the United States. Id. ¶ 2.

Defendants are industrial Broiler producers. As of 2015, Defendants controlled 88.8% of Broiler production in the United States. Id. ¶ 286. Defendants own or tightly control all aspects of producing Broilers, including laying eggs; hatching chicks;

*780raising chicks; slaughtering chickens; and processing and distributing the meat. See id. ¶¶ 270-74. The technology and process of industrial scale Broiler production is well known among Defendants, and all defendants use the same types of equipment and processes. Id. ¶ 330. Entry into the market would cost in excess of $100 million, see id. ¶¶ 319-22, and "no company has created a new poultry company from scratch in decades." Id. at ¶ 323. Defendants Tyson and Pilgrim's Pride maintain the largest market shares, approximately 22% and 17% respectively, while the other defendants maintain market shares no greater than 8-9%, with several below 5%. See id. ¶ 286 (including the following chart).

Defendants' businesses also have relatively similar cost structures. Id. ¶ 330. The primary costs of production are labor and feed for the chickens. Id. ¶¶ 327-38. Labor costs have declined significantly over the past two decades, while labor productivity has substantially increased. Id. ¶ 328. Defendants feed their chickens corn and soybean meal, and purchase these ingredients on the open market. Id. ¶¶ 327, 330. "Feed prices have varied widely from 2007-2016, reaching 71% of the cost of producing Broilers in 2012, but falling to only about 50% by 2014." Id. ¶ 327. "Since January 1, 2008, corn prices have declined roughly 21% and soybean prices have declined 13%." Id. ¶ 329.

Defendants purchase their breeder flocks (the chickens that lay the eggs Defendants raise into Broilers) from three "global genetics conglomerates" that account for 98% of Broilers raised in the United States, and 80% of Broilers raised globally.

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290 F. Supp. 3d 772, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-broiler-chicken-antitrust-litig-illinoised-2017.