Three Farms Express Concern Over Claim Assignment Settlement Issue In Chicken Antitrust Suit

According to a memorandum filed on Monday in the Northern District of Illinois, three settling defendants, Peco Foods, Inc., George’s, Inc., George’s Farms, Inc., and Amick Farms, LLC, have concerns over an aspect of their preliminarily approved settlements with the direct purchaser plaintiffs (DPPs) in the massive antitrust suit accusing broiler chicken producers of price fixing. The defendants asked the court to deem claims that a direct purchaser partially assigns to one or more of its customers invalid. Such partial assignments would “create[] significant uncertainty” as to which claims have been released, they argued.

By way of background, the 2016 suit accuses major broiler chicken producers of involvement in a long-standing antitrust conspiracy to fix prices, suppress production, and manipulate the public index price for broiler chickens. The Department of Justice also filed criminal antitrust cases against the companies and their executives and has so far secured several indictments. The present settlement concerns entities that purchased broiler chickens directly from the defendants during the settlement class period.

In December 2019, the court granted preliminary approval to the settlements, appointed DPP class counsel and greenlighted the settlement administrator-implemented notice plan. In their present request, the defendants encourage the court to grant final approval with an added caveat.

The defendants contend that “there is one category of purported opt-out requests that the Settling Defendants believe should be treated differently than they are currently being treated by the Settlement Administrator.” The fallout the defendants contemplate originates when a direct purchaser participates in the settlement, but one of the direct purchaser’s resale customers “asserts that it has been given an assignment of claims from the direct purchaser, limited to claims arising from the purchase of Broilers re-sold to that particular indirect purchaser/assignee.”

If the partially assigned claims are treated as valid opt-out claims, the defendants argue that “there is an open question about what portion of the direct purchaser’s claims are released and eligible for compensation under the settlements, and what value has been opted out through the partially assigned claims and thus represents potentially remaining liability.” The problem is not hypothetical, the defendants contend, reporting that “the majority of alleged partial assignees did not provide a stipulation regarding the volume of partially assigned claims.”

In turn, they ask the court to hold that “all partially assigned claims from a Class Member assignor to an opt-out assignee are invalid and those claims remain in the Settlement Class.” If the court disagrees with their position, the defendants further request that “the final order should  reflect the specific dollar value of commerce excluded through a partial assignment of a claim,  as calculated by the Settlement Administrator, to prevent the morass of issues that will  inevitably arise if there is not clarity on what claims have been released in the settlement and what claims have been excluded.”

The direct purchasers are represented by Lockridge Grindal Nauen PLLP, Pearson Simon & Warshaw LLP and Hart McLaughlin & Eldridge LLC.

Peco Foods Inc. is represented by Skadden Arps Slate Meagher & Flom LLP. George’s Inc. is represented by Stinson LLP and The Law Group of Northwest Arkansas LLP. Amick Farms LLC is represented by Dykema Gossett PLLC.