Tyson Foods Denied Judgment on the Pleadings in Turkey Price Fixing Suit

On Wednesday, Judge Virginia M. Kendall of the Northern District of Illinois declined arguments by Hillshire Brands Company, Tyson Foods Inc., Tyson Fresh Meats Inc., Tyson Prepared Foods Inc. (collectively, the Tyson defendants) that the court should toss the turkey purchaser plaintiffs’ suits against them. This week’s opinion and order pertains to two class-actions, one filed by Sandee’s Catering, and the other by Olean Wholesale Grocery Cooperative against the nation’s largest turkey producers. 

The Tyson defendants reportedly based their February motion on part of the court’s reasoning in its October 2020 opinions, that in relevant part granted Kraft Heinz Foods Company and Kraft Foods Groups Brands LLC’s (collectively, Kraft) motion to dismiss. Specifically, the Tyson defendants argued that because they do not sell whole turkeys the plaintiffs’ claims did not apply to them, as the only pricing data included in the allegations were in connection with whole turkeys.

At the outset of its analysis, the court noted that a motion for judgment on the pleadings is governed by the same standards as a motion to dismiss for failure to state a claim. In the case of Kraft, the court explained, the plaintiffs failed to allege that the information exchange had any anti-competitive impact on the output or prices of Kraft’s products. It further explained that Kraft’s situation was distinguishable from the Tyson defendants’ because it was only alleged to be a turkey purchaser, not a turkey producer, and the complaint contained no price allegations relating to the former.

While Kraft does sell turkey products, it does not raise and slaughter turkeys, and therefore could not have conspired to suppress supply, the opinion pointed out. By contrast, Judge Kendall explained, the plaintiffs alleged that the Tyson defendants slaughter turkeys. “On this allegation alone the Court would deny the Tyson Defendants’ Motion because such an activity would be supported by allegations in the Complaint that were missing from the allegations pertaining to Kraft,” the opinion stated.

In addition, the plaintiffs pleaded that the Tyson defendants produce turkeys, participated in the Agri Stats information exchange, and that they had opportunities to collude. On these bases, Judge Kendall found that the plaintiffs plausibly alleged that the Tyson defendants participated in the claimed antitrust scheme.

The Tyson defendants are represented by Lipe Lyons Murphy Nahrstadt & Pontikis Ltd. and Axinn, Veltrop & Harkrider LLP

Olean Wholesale Grocery Cooperative is represented by Lockridge Grindal Nauen P.L.L.P., Pearson Simon & Warshaw LLP, and Hagens Berman Sobol Shapiro LLP, and Sandee’s Catering by Cuneo Gilbert & Laduca, LLP, Barrett Law Group P.A., Tostrud Law Group P.C., and Clifford Law Offices.