Tyson Files Complaint to Prevent Arbitration with Costco Over Broiler Chicken Antitrust Claims

On Thursday, Tyson Foods, Inc. filed a complaint in the Western District of Washington against Costco Wholesale Corporation seeking a declaration that Tyson has not agreed to arbitrate claims brought by Costco.

According to the complaint, Tyson is a Delaware corporation engaged in the business of supplying broiler chicken products in the United States. Additionally, the complaint states that Costco is a Washington corporation that buys broiler chicken products and sells them in its stores.

The complaint further states that on September 2, 2016, a class action lawsuit was filed against Tyson, three of its affiliates, more than a dozen broiler chicken producers and a benchmarking service called Agri Stats, Inc., in the Northern District of Illinois.The complaint purports that the case, In re Broiler Chicken Antitrust Litigation, is still pending, but in January 2020, Tyson reached a settlement agreement with plaintiffs classified as direct purchases, like Costco. 

Tyson states that Costco was not an original class member in the In re Broiler Chicken Antitrust Litigation case nor part of the January 2020 settlement agreement. 

The complaint alleges that on December 10, 2021, Costco submitted a demand for arbitration with the American Arbitration Association (AAA) against Tyson that substantively mirrors the overarching conspiracy claim in In re Broiler Chicken Antitrust Litigation. Tyson alleges that Costco premised its right to arbitrate the claim on a two-page, fully-executed “Vendor Agreement” dated August 24, 1995 and an unsigned document titled “Costco Wholesale Standard Terms (2019) (U.S. and its Territories)” that makes no mention of Tyson. 

Tyson argues that Costco has failed to establish that either document forms an enforceable agreement between Costco and Tyson to arbitrate any claims by Costco. Specifically, Tyson argues that Costco has provided no evidence that the parties ever amended the agreement documents through a writing signed by authorized officials from Tyson and Costco which is required under the agreements. 

The complaint purports that Tyson submitted several written objections to the arbitration to both the AAA and Costco. Further, the complaint states that on January 12, 2022, after an administrative review by the AAA, the AAA advised Tyson and Costco that it had decided that Costco had sufficiently alleged the existence of an agreement to arbitrate, and the AAA would move forward with the arbitration. Tyson states that it has participated in the arbitration under protest, repeating and preserving its objections. 

Subsequently, Tyson filed the present complaint seeking declaratory judgment that it has not entered into an agreement to arbitrate with Costco and an injunction preventing the AAA arbitration initiated by Costco. Tyson is represented by Miller Nash LLP and Axinn, Veltrop & Harkrider LLP