Poultry Cos. Say Crisis Response First, Price-Fix Depos Later

By Anne Cullen
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Law360 (May 28, 2020, 7:40 PM EDT) -- Chicken producers facing allegations of a sweeping price-fixing conspiracy have pushed back on poultry buyers' bid to get some depositions back underway, arguing they can't adequately prepare witnesses while straining to brace a food supply chain rocked by the pandemic.

In a lengthy opposition Wednesday, Perdue, Tyson and a slew of other chicken producers urged the Illinois federal judge handling the four-year-old litigation to reject buyers' effort to resume deposing employees via videoconference. It's not a reasonable request when the entire industry is focused on performing vital duties during the unprecedented crisis, the producers said.

"Beyond taking poultry producers away from essential roles in ensuring food supply," the companies said, "the motion also ignores the significant burden and prejudice Defendants will suffer if they are forced to submit to remote depositions."

The producers added that it's "neither reasonable nor feasible" to prepare their employees for legally binding testimony when they're grappling with the dramatic fluctuations in demand brought on by the novel coronavirus and the corresponding nationwide closures.

"Given the indisputably high stakes of this case, it deserves a record becoming of those stakes," they said. "Requiring remote depositions (and, by extension, remote preparation) during a pandemic is a poor substitute for that record."

The initial suit filed in 2016 by food distributor Maplevale Farms Inc. alleges the chicken producers control 90% of the wholesale chicken market and engaged in a multipronged scheme to fix chicken prices over eight years. The broiler chickens at issue account for 98% of the chicken meat in the country, according to the lawsuit.

The producers are alleged to have exchanged detailed information about prices and sales volume through data compiler Agri Stats Inc., a unit of Eli Lilly and Co. that is also named as a defendant in the suit. The producers also allegedly manipulated the Georgia Dock price index, a benchmark rate published by the Georgia Department of Agriculture that helps set chicken prices.

Proposed classes of direct purchasers, commercial and institutional indirect purchasers and end-user consumers as well as individual chicken buyers have added their own complaints to the case. In June 2018, the Judicial Panel on Multidistrict Litigation declined to consolidate the dozens of chicken price-fixing cases that have been filed in recent years.

The plaintiffs are itching to get more depositions under their belt after waiting out a nearly yearlong freeze first put in place to allow a parallel criminal investigation to move ahead and later extended indefinitely by COVID-19 safety measures.

While both sides have continued exchanging documents, the buyers floated a plan two weeks ago to remotely question 18 witnesses, including current and former employees of Perdue, Tyson, Sanderson and Koch, over the course of the next two months.

Although the chicken producers said they oppose the buyers' suggested timeline, they're open to the idea of remote depositions.

"Defendants recognize that this situation is highly fluid and believe the question of remote depositions should be re-examined in September," they said.

The battle over class certification is slated to kick off in early fall, and the producers said after this gets underway, picking depositions back up might make more sense.

"There is no need to depose these witnesses at any point before their motions for class certification," they said.

Counsel and representatives for the parties did not respond to requests for comment Thursday.

The direct purchaser plaintiffs are represented by Lockridge Grindal Nauen PLLP, Pearson Simon & Warshaw LLP and Hart McLaughlin & Eldridge LLC. Indirect purchaser plaintiffs are represented by Wexler Wallace LLP, Gustafson Gluek PLLC and Cotchett Pitre & McCarthy LLP. The end-user plaintiffs are represented by Hagens Berman Sobol Shapiro LLP and Cohen Milstein Sellers & Toll PLLC.

The direct action plaintiffs are represented by Kenny Nachwalter PA, Boies Schiller Flexner LLP, Hunton Andrews Kutyh LLP, Bilzin Sumberg Baena Price & Axelrod LLP, Sperling & Slater PC, Sherrard Roe Voigt & Harbison PLC, Ahern & Associates PC, Polsinelli PC, among others.

The poultry producers are represented by Venable LLP, Falkenberg Ives LLP, Weil Gotshal & Manges LLP, Bailey Brauer PLLC, Eimer Stahl LLP, Mayer Brown LLP, Rose Law Firm, Novack and Macey LLP, Proskauer Rose LLP, Vedder Price PC, Skadden Arps Slate Meagher & Flom LLP, among others.

The case is In re Broiler Chicken Antitrust Litigation, case number 1:16-cv-08637, in the U.S. District Court for the Northern District of Illinois.

--Additional reporting by Lauraann Wood and Matthew Perlman. Editing by Alanna Weissman.

Correction: An earlier version of the story mischaracterized the litigation as multidistrict litigation. The error has been corrected.

For a reprint of this article, please contact reprints@law360.com.

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