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`Case 4:21-cv-10037 Document 1 Filed 12/28/21 Page 1 of 67
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`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
`
`Anna T. Neill (State Bar No. 270858)
`KENNY NACHWALTER, P.A.
`1441 Brickell Avenue
`Suite 1100
`Miami, Florida 33131
`Tel: (305) 373-1000
`Fax: (305) 372-1861
`E-mail: aneill@knpa.com
`
`Counsel for Plaintiffs The Kroger Co.,
`Albertsons Companies, Inc., Hy-Vee
`Inc., Save Mart Supermarkets, and
`US Foods, Inc.
`
`
`
`THE KROGER CO., ALBERTSONS
`COMPANIES, INC., HY-VEE, INC.,
`SAVE MART SUPERMARKETS, and
`US FOODS, INC.
`
`Plaintiffs,
`vs.
`
`AGRI STATS, INC.; CLEMENS FOOD
`GROUP, LLC, THE CLEMENS
`FAMILY CORPORATION; HORMEL
`FOODS CORPORATION; SEABOARD
`FOODS LLC; SMITHFIELD FOODS,
`INC.; TRIUMPH FOODS, LLC; TYSON
`FOODS, INC., TYSON PREPARED
`FOODS, INC., AND TYSON FRESH
`MEATS, INC.
`Defendants.
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`Case No.
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`COMPLAINT AND DEMAND FOR JURY TRIAL
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`Case 4:21-cv-10037 Document 1 Filed 12/28/21 Page 2 of 67
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`TABLE OF CONTENTS
`NATURE OF ACTION ....................................................................................................... 1 
`JURISDICTION AND VENUE .......................................................................................... 3 
`PARTIES ............................................................................................................................. 4 
`A. 
`Plaintiffs .................................................................................................................. 4 
`B. 
`Defendants ................................................................................................................ 6 
`(1) 
`Agri Stats ..................................................................................................... 6 
`(2) 
`Clemens ....................................................................................................... 6 
`(3) 
`Hormel ......................................................................................................... 7 
`(4) 
`Seaboard ...................................................................................................... 7 
`(5) 
`Smithfield .................................................................................................... 7 
`(6) 
`Triumph ....................................................................................................... 7 
`(7) 
`Tyson ........................................................................................................... 8 
`IV.  CO-CONSPIRATORS AND AGENTS .............................................................................. 8 
`V. 
`TRADE AND COMMERCE .............................................................................................. 9 
`VI.  THE IMPORTANCE OF AGRI STATS TO THE UNLAWFUL CONSPIRACY
`ALLEGED IN THIS COMPLAINT ................................................................................... 9 
`A. 
`Agri Stats Markets its Collusive Scheme to Pork Producers .................................. 10 
`B. 
`Agri Stats Provided Producer Defendants and Co-Conspirators With the
`Ability to Monitor and Enforce Their Collective Restriction of the Pork
`Supply, and to Discipline Co-Conspirators For Not Complying With the
`Conspiracy ............................................................................................................. 12 
`VII.  THE MARKET FOR THE PRODUCTION AND SALE OF PORK WAS
`CONDUCIVE TO CARTELIZATION ............................................................................ 19 
`A. 
`Pork is a Commodity Product With Inelastic Demand ......................................... 19 
`B. 
`The Producer Defendants and Co-Conspirators Controlled the Production
`and Supply of Pork in the United States, Which Allowed the Conspiracy to
`Succeed .................................................................................................................. 20 
`The Market For the Production and Sale of Pork Was Concentrated ................... 25 
`There Were Barriers to Entry in the Market For the Integrated Production
`and Sale of Pork .................................................................................................... 30 
`Select Trade Associations Facilitated Collusion ................................................... 30 
`
`C. 
`D. 
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`E. 
`
`I. 
`II. 
`III. 
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`VIII.  DEFENDANTS AND CO-CONSPIRATORS IMPLEMENTED COLLUSIVE,
`ANTICOMPATITIVE CAPACITY AND PRODUCTION RESTRICTIONS ................ 32 
`A. 
`Overview of the Restriction of the Pork Supply During the Conspiracy .............. 32 
`(1) 
`Smithfield .................................................................................................. 35 
`(2) 
`Tyson ......................................................................................................... 36 
`(3) 
`JBS/Cargill ................................................................................................ 37 
`(4) 
`Hormel ....................................................................................................... 37 
`(5) 
`Seaboard .................................................................................................... 37 
`(6) 
`Triumph ..................................................................................................... 38 
`(7) 
`Clemens ..................................................................................................... 38 
`Timeline of the Conspiracy ................................................................................... 38 
`B. 
`IX.  ABNORMAL PRICING DURING THE CONSPIRACY DEMONSTRATES
`THE SUCCESS OF THE CONSPIRACY ........................................................................ 49 
`THE CONSPIRACY WAS EFFECTIVE IN INCREASING THE PRICE OF PORK
`SOLD TO PLAINTIFFS AND OTHERS IN THE UNITED STATES ........................... 51 
`XI.  THE RESULTS OF THE DOJ’S CRIMINAL INVESTIGATION IN BROILER
`CHICKENS SUPPORTS AN INFERENCE OF THE EXISTENCE OF A
`SIMILAR CONSPIRACY IN THE PORK INDUSTRY ................................................. 53 
`XII.  PLAINTIFFS’ CLAIMS ARE TIMELY .......................................................................... 54 
`COUNT I – ANTITRUST VIOLATION .......................................................................... 58 
`COUNT II – VIOLATION OF THE PACKERS AND STOCKYARD ACT
`(AGAINST ALL DEFENDANTS EXCEPT AGRI STATS) ........................................... 61 
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`X. 
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`Plaintiffs The Kroger Co., Albertsons Companies, Inc., Hy-Vee, Inc., and Save Mart
`Supermarkets, which are supermarket chains, and US Foods, Inc., which is a food distributor
`(collectively “Plaintiffs”) sue Defendants Agri Stats, Inc., Clemens Food Group, LLC, The
`Clemens Family Corporation, Hormel Foods Corporation, Seaboard Foods LLC, Smithfield Foods,
`Inc., Triumph Foods, LLC, Tyson Foods, Inc., Tyson Prepared Foods, Inc., and Tyson Fresh Meats,
`Inc. (collectively “Defendants”) and allege as follows:
`I.
`NATURE OF ACTION
`1.
`As more fully alleged below, between at least approximately 2009 and 2018, if not
`later, and with a lingering effect, Defendants and their co-conspirators conspired to fix, increase,
`maintain and/or stabilize the price of pork1 sold to Plaintiffs and others in the United States, and
`implemented this conspiracy through anticompetitive conduct, including, without limitation,
`coordinating among themselves to restrict the output and limit the production2 of their swine herd
`in order to reduce the domestic supply of pork.
`2.
`Defendants and their co-conspirators’ anticompetitive coordination to restrict the
`pork supply occurred in several ways.
`3.
`For example, during the conspiracy, the Producer Defendants3 and co-conspirators4
`– who controlled more than 80% of the pork market at times relevant to Plaintiffs’ claims – used
`their co-conspirator Agri Stats to exchange with each other detailed, competitively-sensitive, and
`closely guarded non-public information about their pork businesses, including benchmarking
`
`1
`For purposes of this Complaint, “pork” includes all pork products, regardless of the
`form in which they are sold, and all products containing pig meat, whether purchases fresh or
`frozen, including but not limited to, smoked ham, sausage, and bacon. From time to time in this
`Complaint, “pork” and “swine” are used interchangeably, particularly when referring to the portk
`or swine industry.
`2
`Restricting output or production, and limiting production, can mean reducing output
`in absolute or relative terms, or maintaining or not increasing output, i.e., limiting output, as much
`as a firm would do so in a competitive market.
`3
`As used in this Complaint, the phrase “Producer Defendants” means Clemens,
`Hormel, Seaboard, Smithfield, Triumph, and Tyson as each is defined below. Agri Stats is a
`Defendant, but not an Producer Defendant.
`4
`As used in this Complaint, the phrase “co-conspirator” includes other pork producers
`including without limitation, JBS as described below. The phrase “co-conspirator” also includes
`other firms and individuals.
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`reports, about their respective pork prices, production, volume, costs, slaughter information,
`capacity, sales volume, inventory levels, and plant-specific information about production lines and
`yields (collectively “Competitively-Sensitive Information”). As explained below, Agri Stats
`collected this information from the Producer Defendants and co-conspirators and intentionally
`shared this information with them in detailed reports. The Producer Defendants and co-
`conspirators knew when they provided their respective Competitively-Sensitive Information to
`Agri Stats that it would be reported to their competitors in the private Agri Stats reports. They also
`knew at the time that their Competitively-Sensitive Information in the Agri Stats reports were
`deciphered by their co-Defendants and co-conspirators so that each of them would learn which
`Competitively-Sensitive Information belonged to which Producer Defendant or co-conspirator.
`This enabled the Producer Defendants and co-conspirators to monitor each other’s Competitively-
`Sensitive Information and enforce the conspiracy, and effectively control domestic pork supply
`and price.
`4.
`Another example of how, during the conspiracy, Defendants and co-conspirators
`coordinated in an anticompetitive manner to restrict the pork supply was through public statements,
`aimed at each other, regarding the need to restrict pork production. These statements served a
`signaling purpose and emphasized to one another that an understanding or agreement – or solidarity
`– existed among them. By its own account, Smithfield took a leadership role in this regard.
`Defendants and co-conspirators then furthered their conspiracy by each taking action to cut pork
`supply or limit pork supply increases more than each otherwise would have done in a competitive
`market. These actions would have been against each Producer Defendant and co-conspirator’s
`business interest but for the existence of the conspiracy, which allowed for their collective action.
`5.
`Plaintiffs allege that Defendants and their co-conspirators’ conspiracy is a per se
`violation of Section One of the Sherman Act,15 U.S.C. § 1 (Count I), and the Producer Defendants
`and co-conspirators’ conduct as alleged in this Complaint violates the Packers and Stockyards Act
`as well (Count II).
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`II.
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`JURISDICTION AND VENUE
`6.
`Each Plaintiff brings this action under Sections 4 and 16 of the Clayton Act, 15
`U.S.C. §§ 15 and 26, and Section 308 of the Packers and Stockyards Act (“PSA”), 7 U.S.C. § 209,
`for the injuries sustained by each Plaintiff as a result of Defendants’ violations of Section 1 of the
`Sherman Act, 15 U.S.C. § 1 and Section 202 of the PSA, 7 U.S.C. § 192.
`7.
`This Court has jurisdiction under 28 U.S.C. §§ 1331, 1337, Sections 4 and 16 of the
`Clayton Act, 15 U.S.C. §§ 15(a) and 26, and Section 308 of the PSA, 7 U.S.C. § 209.
`8.
`Venue is proper in this District under Sections 4, 12, and 16 of the Clayton Act, 15
`U.S.C. §§ 15, 22 & 26, 28 U.S.C. § 1391(b), (c) and (d), and Section 308 of the PSA, 7 U.S.C. §
`209, because: (a) one or more Defendants resides or resided, is found, transacts or transacted business
`in this District, or is licensed to do business or is doing business in this District; (b) a substantial
`portion of the affected interstate commerce described in this Complaint was carried out in this
`District; (c) each Defendant is subject to personal jurisdiction in this District; and/or (d) to the
`extent that there is no District in which this action may otherwise be brought, then venue is proper
`in this District pursuant to 28 U.S.C. § 1391(b) because one or more Defendants is/are found in
`this District.
`9.
`This Court has personal jurisdiction over each Defendant because, among other
`reasons, each Defendant: (a) inhabits, transacts business in, has continuing or systematic contacts
`with, or is found in this District; (b) has sufficient minimum contacts in the United States sufficient
`to satisfy due process; (c) manufactured, sold, shipped, and/or delivered substantial quantities of
`pork throughout the United States, including in this District; (d) belonged to the conspiracy alleged
`in this Complaint, and one or more of them, and their co-conspirators, performed unlawful acts in
`furtherance of the conspiracy in this District, including, without limitation, selling pork to one or
`more Plaintiffs and others in this District at artificially inflated prices; and/or (e) engaged in
`unlawful conduct that was directed at and had a direct, foreseeable, and intended effect of causing
`injury to the business or property of persons residing or located in, or doing business throughout,
`the United States, including in this District.
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`III.
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`PARTIES
`A.
`Plaintiffs
`10.
`Plaintiff The Kroger Co. (“Kroger”) is an Ohio corporation with its principal place
`of business in Cincinnati, Ohio. Kroger brings this action on its own behalf and on behalf of its
`assignors (including, without limitation: Kroger Limited Partnership I; KRGP Inc.; Kroger Texas
`L.P.; The Kroger Co. of Michigan; Fred Meyer, Inc.; Fred Meyer Stores, Inc.; Food 4 Less
`Holdings, Inc.; Ralph’s Grocery Company; Smith’s Food & Drug Centers, Inc.; Dillon Companies,
`LLC; Roundy’s Inc.; and Harris Teeter, LLC), each of which directly purchased pork from one or
`more Defendants and their co-conspirators during the conspiracy. The reference in this Complaint
`to “Kroger” refers to The Kroger Co. and its assignors. Kroger owns and operates retail stores that
`sell pork. During the time period relevant to Plaintiffs’ claims, Kroger directly purchased pork in
`the United States from one or more Defendants and/or their co-conspirators and sustained injury
`and damage as a proximate result of the conduct and violations of law alleged in this Complaint.
`11.
`Plaintiff Albertsons Companies, Inc. is a Delaware limited liability company with
`its principal place of business in Boise, Idaho. Albertsons Companies, Inc. is the parent corporation
`of Albertsons LLC, New Albertsons Inc., and Safeway Inc. (collectively “Albertsons”). Albertsons
`Companies, Inc. brings this action on its own behalf and on behalf of its assignors (including,
`without limitation: Safeway Inc.; Carr-Gottstein Foods Co.; Dominick’s Finer Foods, LLC;
`Genuardi’s Family Markets LP; Lucerne Foods, Inc.; Randall’s Food & Drugs LP; The Vons
`Companies, Inc.; New Albertsons, Inc.; Albertsons LLC; ACME Markets, Inc.; Jewel Food Stores,
`Inc.; Shaw’s Supermarkets, Inc.; and Star Market Company, Inc.), each of which directly purchased
`pork from one or more Defendants and their co-conspirators during the conspiracy. The reference
`in this Complaint to “Albertsons” includes Albertsons’ assignors. Albertsons owns and operates
`retail stores that sell pork. During the time period relevant to Plaintiffs’ claims, Albertsons directly
`purchased pork in the United States from one or more Defendants and/or their co-conspirators and
`sustained injury and damage as a proximate result of the conduct and violations of law alleged in
`this Complaint.
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`12.
`Plaintiff Hy-Vee, Inc. (“Hy-Vee”) is an Iowa corporation with its principal place of
`business in West Des Moines, Iowa. Hy-Vee brings this action on its own behalf and on behalf of
`its assignor (Topco Associates, LLC), each of which directly purchased pork from one or more
`Defendants and their co-conspirators during the conspiracy. The reference in this Complaint to
`“Hy-Vee” includes Hy-Vee’s assignor. Hy-Vee owns and operates retail stores that sell pork.
`During the time period relevant to Plaintiffs’ claims, Hy-Vee itself, and as assignee of Topco,
`directly purchased pork in the United States from one or more Defendants and/or their co-
`conspirators and sustained injury and damage as a proximate result of the conduct and violations
`of law alleged in this Complaint.
`13.
`Plaintiff Save Mart Supermarkets (“Save Mart”) is a California corporation with its
`principal place of business in Modesto, California. The reference in this Complaint to “Save Mart”
`refers to Save Mart Supermarkets and banners under which it does business, including, without
`limitation, Save Mart, Lucky Supermarkets, FoodMaxx, and MaxxValue Foods. Save Mart owns
`and operates retail stores that sell pork. During the time period relevant to Plaintiffs’ claims, Save
`Mart directly purchased pork in the United States from one or more Defendants and/or their co-
`conspirators and sustained injury and damage as a proximate result of the conduct and violations
`of law alleged in this Complaint.
`14.
`Plaintiff US Foods, Inc. is a Delaware corporation (“US Foods”) with its principal
`place of business in Rosemont, Illinois. US Foods is a food distributor that sells pork. During the
`time period relevant to Plaintiffs’ claims, US Foods directly purchased pork in the United States
`from one or more Defendants and/or their co-conspirators and sustained injury and damage as a
`proximate result of the conduct and violations of law alleged in this Complaint.
`15. Each Plaintiff is a “person” with standing to sue Defendants for damages and other
`relief under Section 1 of the Sherman Act, 15 U.S.C. § 1, and Sections 4 and 16 of the Clayton
`Act, 15 U.S.C. §§ 15(a) & 26, and Section 209(b) of the Packers and Stockyards Act, 7 U.S.C.
`§ 209(b).
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`B.
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`Defendants
`(1)
`Agri Stats
`16. Agri Stats, Inc. (“Agri Stats”) is an Indiana corporation located in Fort Wayne,
`Indiana. Until about 2018, Agri Stats was a subsidiary of Eli Lilly & Co. Agri Stats is now a
`wholly-owned subsidiary of Agri Stats Omega Holding Co. LP, a limited partnership based in
`Indiana. During the time period relevant to Plaintiffs’ claims in this Complaint, Agri Stats directly:
`participated in the conspiracy alleged in this Complaint; facilitated the exchange of the Producer
`Defendants and their co-conspirators’ Competitively-Sensitive Information among Defendants and
`their co-conspirators; and engaged in the unlawful conduct alleged in this Complaint, which
`proximately caused injury and damage to Plaintiffs.
`(2)
`Clemens
`17. Clemens Food Group, LLC is a limited-liability company with its principal place of
`business in Hatfield, Pennsylvania. During the time period relevant to Plaintiffs’ claims in this
`Complaint, Clemens Food Group, LLC: participated in the conspiracy alleged in this Complaint;
`and directly or through an affiliate co-conspirator sold pork in interstate commerce to Plaintiffs
`and others in the United States.
`18. The Clemens Family Corporation is a Pennsylvania corporation with its principal
`place of business in Hatfield, Pennsylvania. The Clemens Family Corporation is the parent
`company of Clemens Food Group, LLC. During the time period relevant to Plaintiffs’ claims in
`this Complaint, The Clemens Family Corporation: participated in the conspiracy alleged in this
`Complaint; and directly or through an affiliate co-conspirator sold pork in interstate commerce to
`Plaintiffs and others in the United States.
`19. Clemens Food Group, LLC and The Clemens Family Corporation are referred to in
`this Complaint as “Clemens.” During the time period relevant to Plaintiffs’ claims in this
`Complaint, Clemens engaged in the unlawful conduct alleged in this Complaint, which proximately
`caused injury and damage to Plaintiffs.
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`(3)
`Hormel
`20. Hormel Foods Corporation (“Hormel”) is a Delaware corporation with its principal
`place of business in Austin, Minnesota. During the time period relevant to Plaintiffs’ claims in this
`Complaint, Hormel: participate in the conspiracy alleged in this Complaint; directly or through an
`affiliate co-conspirator sold pork in interstate commerce to Plaintiffs and others in the United
`States; and engaged in the unlawful conduct alleged in this Complaint, which proximately caused
`injury and damage to Plaintiffs.
`(4)
`Seaboard
`21.
`Seaboard Foods LLC (“Seaboard”) is a limited-liability company with its principal
`place of business in Shawnee Mission, Kansas. Seaboard is a wholly owned subsidiary of Seaboard
`Corporation. During the time period relevant to Plaintiffs’ claims in this Complaint, Seaboard:
`participated in the conspiracy alleged in this Complaint; directly or through an affiliate co-
`conspirator sold pork in interstate commerce to Plaintiffs and others in the United States; and
`engaged in the unlawful conduct alleged in this Complaint, which proximately caused injury and
`damage to Plaintiffs.
`(5)
`Smithfield
`22.
`Smithfield Foods, Inc. (“Smithfield”) is a Commonwealth of Virginia corporation
`with its principal place of business in Smithfield, Virginia. Smithfield is a subsidiary of WH Group
`Limited, a Chinese company. During the time period relevant to Plaintiffs’ claims in this
`Complaint, Smithfield: participated in the conspiracy alleged in this Complaint; directly or through
`an affiliate co-conspirator sold pork in interstate commerce to Plaintiffs and others in the United
`States; and engaged in the unlawful conduct alleged in this Complaint, which proximately caused
`injury and damage to Plaintiffs.
`(6)
`Triumph
`23. Triumph Foods, LLC (“Triumph”) is a limited-liability company with its principal
`place of business in St. Joseph, Missouri. During the time period relevant to Plaintiffs’ claims in
`this Complaint, Triumph: participated in the conspiracy alleged in this Complaint; directly or
`through an affiliate co-conspirator sold pork in interstate commerce to Plaintiffs and others in the
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`United States; and engaged in the unlawful conduct alleged in this Complaint, which proximately
`caused injury and damage to Plaintiffs.
`(7)
`Tyson
`24. Tyson Foods, Inc. is a Delaware corporation with its principal place of business in
`Springdale, Arkansas. During the time period relevant to Plaintiffs’ claims in this Complaint,
`Tyson Foods, Inc.: participated in the conspiracy alleged in this Complaint; and directly or through
`an affiliate co-conspirator sold pork in interstate commerce to Plaintiffs and others in the United
`States.
`
`25. Tyson Prepared Foods, Inc. is a Delaware corporation with its principal place of
`business in Springdale, Arkansas. Tyson Prepared Foods, Inc. is a wholly owned subsidiary of
`Tyson Foods, Inc. During the time period relevant to Plaintiffs’ claims in this Complaint, Tyson
`Prepared Foods, Inc.: participated in the conspiracy alleged in this Complaint; and directly or
`through an affiliate co-conspirator sold pork in interstate commerce to Plaintiffs and others in the
`United States.
`26. Tyson Fresh Meats, Inc. is a Delaware corporation with its principal place of
`business in Springdale, Arkansas. Tyson Fresh Meats, Inc. is a wholly owned subsidiary of Tyson
`Foods, Inc. During the time period relevant to Plaintiffs’ claims in this Complaint, Tyson Fresh
`Meats, Inc.: participated in the conspiracy alleged in this Complaint; and directly or through an
`affiliate co-conspirator sold pork in interstate commerce to Plaintiffs and others in the United
`States.
`
`27. Tyson Foods, Inc., Tyson Prepared Foods, Inc. and Tyson Fresh Meats, Inc. are
`referred to in this Complaint as “Tyson.” During the time period relevant to Plaintiffs’ claims in
`this Complaint, Tyson engaged in the unlawful conduct alleged in this Complaint, which
`proximately caused injury and damage to Plaintiffs.
`IV.
`CO-CONSPIRATORS AND AGENTS
`28. Other entities and individuals not named as Defendants in this Complaint, including,
`without limitation, JBS USA Food Company (“JBS”), combined, conspired, or agreed with
`Defendants and committed acts in furtherance of the unlawful conspiracy alleged in this Complaint.
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`29. The individuals employed by Defendant and co-conspirators who participated in the
`conspiracy did so on behalf of their respective employer Defendant or co-conspirator, and their
`conduct in furtherance of the conspiracy was undertaken by each of them during the course and
`scope of their employment by their Defendant or co-conspirator employer.
`V.
`TRADE AND COMMERCE
`30. During the time relevant to Plaintiffs’ claims, Defendants and their co-conspirators
`engaged in business that affects or is within the flow of interstate commerce, and the effect of that
`business on interstate commerce is substantial. In particular, the activities of Defendants and co-
`conspirators are within the flow of interstate and foreign commerce or have a substantial effect
`upon interstate or foreign commerce in that: (a) Defendants and their co-conspirators sold and
`shipped substantial quantities of pork in a continuous and uninterrupted flow in interstate
`commerce to customers located in States other than the States in which the Defendants and their
`co-conspirators produced the pork; (b) data, information, correspondence and/or financial material
`were exchanged between each Defendant in the State in which each is located, incorporated, or has
`its principal place of business and other States; and/or (c) money flowed between banks outside of
`the State in which each Defendant is located, incorporated, or has its principal place of business
`and other States.
`31. The effect of Defendants and/or their co-conspirators’ anticompetitive conduct on
`United States commerce gives rise to Plaintiffs’ claims.
`VI.
`THE IMPORTANCE OF AGRI STATS TO THE UNLAWFUL CONSPIRACY
`ALLEGED IN THIS COMPLAINT
`
`32. Agri Stats had a central role in the conspiracy alleged in this Complaint. As
`explained below, it collected and disseminated the Producer Defendants and co-conspirators’
`Competitively Sensitive Information, and Agri Stats provided detailed price reports to the Producer
`Defendants and co-conspirators through its subsidiary, Express Markets, Inc. Agri Stats’ role in
`the conspiracy is further described below.
`
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`A. Agri Stats Markets its Collusive Scheme to Pork Producers
`33. Beginning in 2008 or before, Agri Stats proposed a series of benchmarks to the pork
`industry to monitor pork production. Benchmarking is the act of comparing one company’s
`practices, methods or performance against those of other companies. Benchmarking of the type
`undertaken by Agri Stats and the Producer Defendants and co-conspirators reduces strategic
`uncertainty in the market and changes the incentives for competitors to compete, thereby enabling
`companies to coordinate their market strategies and otherwise restrict competition. This is
`especially true when, as alleged in this Complaint, benchmarking involves the exchange of
`commercially sensitive, and typically non-public, information among competitors about a
`commodity product.
`34.
`In 2008, Greg Bilbrey (“Bilbrey”) of Agri Stats told swine industry participants:
`“Benchmarking in the swine industry could range from simple production comparisons to elaborate
`and sophisticated total production and financial comparisons. Each and every commercial swine
`operation is encouraged to participate in some benchmarking effort.”5
`35. Agri Stats emphasized to the Producer Defendants and co-conspirators that the goal
`of collectively sharing their Competitively-Sensitive Information was to increase their profits in
`the sale of pork and not to increase their pork production. As Agri Stats explained at the time: “We
`must remember that the ultimate goal is increasing profitability – not always increasing the level
`of production.” Furthermore, Agri Stats told the industry: “Each swine production company should
`be participating in some type of benchmarking. To gain maximum benefit, production, cost and
`financial performance should all be part of the benchmarking program.”6
`36.
`In April 2009, Agri Stats’ Bilbrey again invited pork producers, including Producer
`Defendants and co-conspirators, to design and operate their own benchmarking effort: “Though all
`producers may not be part of or fit into an Agri Stats type benchmarking program, all producers
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`5
`Greg Bilbrey, Benchmarking and Cost – Production Relationships, 19 Advances in
`Pork Production Journal, at 43 (2008).
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`Id. at 46.
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`could participate in benchmarking in some way. Commercial benchmarking opportunities are
`available. Producer groups could design and operate their own benchmarking effort.”7
`37. The Producer Defendants and co-conspirators accepted this invitation and, not later
`than 2009, they started participating in the detailed benchmarking scheme using Agri Stats and its
`reports. The Producer Defendants and co-conspirators’ recognized, understood and agreed that the
`Competitively-Sensitive Information that they received about each other’s pork business in the Agri Stats’
`reports provided them with a means to collectively restrict pork production and monitor and enforce their
`respective compliance with such collective action for the purpose and with the effect of increasing, fixing,
`maintaining and/or stabilizing the price of pork sold to Plaintiffs and others.
`38. Each Producer Defendant identified specific executives who were responsibl