Case 5:20-cv-07049-NC Document 1 Filed 10/08/20 Page 1 of 34
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`Moneet Kohli, Esq.
`CA BAR #250410
`1355 Taylor Street #3
`San Francisco, CA 94108
`Phone: (781) 354-3600
`moneet@kohli.com
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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`CASE NO.
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`CLASS ACTION COMPLAINT
`JURY TRIAL DEMANDED
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`(1)
`ANNA MASON;
`(2)
`BARRY MASON;
`(3) MITCHELL MASON;
`(4)
`JONATHAN TIPTON;
`(5)
`and all others similarly situated,
`Plaintiffs,
`v.
`(1)
`TYSON FOODS, INC.;
`(2)
`TYSON CHICKEN, INC.;
`(3)
`TYSON BREEDERS, INC.;
`(4)
`TYSON POULTRY, INC.;
`(5)
`PILGRIM’S PRIDE CORPORATION;
`(6)
`PERDUE FARMS, INC.;
`(7)
`KOCH FOODS, INC.;
`(8)
`KOCH MEAT CO, INC., d/b/a KOCH
`POULTRY CO.;
`(9)
`SANDERSON FARMS, INC.;
`(10) SANDERSON FARMS, INC. (FOOD
`DIVISION);
`(11) SANDERSON FARMS, INC.
`(PROCESSING DIVISION); and,
`(12) SANDERSON FARMS, INC.
`(PRODUCTION DIVISION),
`Defendants.
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`Plaintiffs ANNA MASON, BARRY MASON, MITCHELL MASON, AND JONATHAN
`TIPTON (collectively, “Plaintiffs”), on behalf of themselves and all other similarly situated
`broiler chicken growers, bring this antitrust and unfair competition action seeking treble damages
`under Section 1 of the Sherman Antitrust Act and Section 202 of the Packers and Stockyards Act,
`demanding a trial by jury of all issues so triable. Plaintiffs allege the following, based upon
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`Case 5:20-cv-07049-NC Document 1 Filed 10/08/20 Page 2 of 34
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`personal knowledge as to matters relating to themselves, and upon information and belief and
`the investigation of counsel as to all other matters:
`I.
`NATURE OF THE ACTION
`1.
`This is a class action brought on behalf of a proposed class of broiler chicken (“Broiler”)
`growers, also known as poultry growers (referred to herein as “Growers”), against vertically-integrated
`poultry company defendants (“live poultry dealers” or “Integrators”), which operate Broiler processing
`plants (“Complexes”), concerning the Integrators’ anticompetitive, collusive, predatory, unfair, and bad
`faith conduct in the domestic market for Broiler growing services (also referred to herein as “Broiler
`Grow-Out Services”). This case involves agreements by Defendants (defined below) and their Co-
`Conspirators (defined more fully, infra, and together with Defendants, the “Cartel”)—dating back to at
`least 2008—not to compete for Broiler Grow- Out Services, with the purpose and effect of fixing,
`maintaining, and/or stabilizing Grower compensation below competitive levels.
`2.
`As part of the scheme, the Cartel members illegally agreed to share detailed data on
`Grower compensation with one another, with the purpose and effect of artificially depressing Grower
`compensation below competitive levels. By disclosing their highly sensitive and confidential
`compensation rates to each other, they suppressed competition for Broiler Grow-Out Services and drove
`down compensation to all Growers. By sharing this information on a frequent and contemporaneous
`basis, the Cartel has been able to keep Grower compensation lower than it would have been in a
`competitive market, and to keep the increased profits for themselves. This illegal information exchange,
`combined with other anticompetitive conduct alleged herein, drove down Grower compensation
`nationwide. The members of the Cartel recognized the benefits of sharing this highly sensitive,
`proprietary and otherwise confidential Grower compensation information with each other, but not with
`the Growers themselves.
`3.
`In furtherance of their agreement not to compete for Broiler Grow-Out Services, Cartel
`members also agreed not to solicit Growers associated with other Integrators. By agreeing not to
`compete for the services of one another’s Growers, the Cartel members attempted to insulate
`themselves from normal competitive pressures that could potentially erode the effects of their
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`Case 5:20-cv-07049-NC Document 1 Filed 10/08/20 Page 3 of 34
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`information sharing agreement. This illegal “no poach” agreement inoculated the Cartel against
`potential cheating by its members on the Cartel’s compensation suppression scheme and furthered its
`efforts to artificially suppress Grower compensation below competitive levels.
`4.
`These agreements (together, the “Scheme”) were designed to keep Growers, as author
`Christopher Leonard noted in The Meat Racket: The Secret Takeover of America’s Food Business, “in
`a state of indebted servitude, living like modern-day sharecroppers on the ragged edge of bankruptcy.”
`II.
`PARTIES
`5.
`Plaintiffs Mitchell (“Mitch”) and Anna Mason (collectively, “the Masons”) began
`providing Broiler-Grow Out Services for Defendant Wayne Farms (defined infra) in 1986 in Alabama.
`The Masons initially invested $20,000 in upgrades so they would be able to receive Broilers. Then,
`around 1996, the Masons had to invest $80,000 more for a ventilation system. The Masons exited the
`industry in 2014 after their field representative closed down two of their Broiler Grow-Out houses and
`said that they would not be receiving any more Broiler chicks due to their refusal to implement
`additional upgrades. The Masons believe that Wayne Farms wanted them to build new houses so that
`they would go into debt.
`6.
`Plaintiff Barry Mason began providing Broiler Grow-Out Services for Defendant
`Tyson (defined infra) in fall 1994 in Alabama. Mr. Mason purchased five chicken houses from his
`father so he could continue the family business. Mr. Mason initially invested $365,000 for the five
`chicken houses and 69 acres of land. Four years later, additional required cost Mr. Mason $250,000.
`At some point, Defendant Koch (defined infra) bought the Tyson Complex for which Mr. Mason
`provided Broiler Grow-Out Services, at which point Mr. Mason began providing Broiler Grow-Out
`Services for Koch. Koch required Mr. Mason to upgrade brooders and vent doors which cost another
`$100,000. Koch refused to provide Mr. Mason with Broilers unless he made the required upgrades.
`Throughout his time providing Broiler Grow-Out Services, he was barely able to make ends meet with
`the compensation provided by Tyson and Koch. Mr. Mason sold his Broiler Grow-Out houses and
`property in 2019, following two years of Koch interfering in the sale. Mr. Mason lost money on the
`sale and it was not profitable as a result of the Defendants misconduct.
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`Case 5:20-cv-07049-NC Document 1 Filed 10/08/20 Page 4 of 34
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`7.
`Plaintiff Jonathan “Cody” Tipton began providing Broiler Grow-Out Services for
`Defendant Pilgrim’s (defined infra) in Alabama in 2013. Mr. Tipton took over his father’s farm. Mr.
`Tipton initially borrowed $20,000, using his truck as collateral, to upgrade the field, water, and feed
`lines. During the course of his time providing Broiler Grow-Out Services, Pilgrim’s required that Mr.
`Tipton make further investments to his Broiler houses. Throughout his time providing Broiler Grow-
`Out Services, he was barely able to make ends meet with the compensation provided by Pilgrim’s. Mr.
`Tipton’s Broiler business has never been profitable. Mr. Tipton attempted to switch Integrators, but
`neither Wayne’s (defined infra) nor Koch (defined infra) would hire him. Mr. Tipton ultimately exited
`the industry when Pilgrim’s refused to provide him with more Broilers unless he made additional
`upgrades, but Mr. Tipton could not afford the upgrades. Due to the debt caused by raising Broilers,
`Mr. Tipton lost his house, three vehicles, tractor, an off-road vehicle, and all his equipment, and he
`owes approximately $150,000.
`8.
`Defendant Tyson Foods, Inc. is a Delaware corporation headquartered in Springdale,
`Arkansas that collusively shares nonpublic information through Agri Stats and otherwise engages in the
`conduct alleged herein with the aim and effect of suppressing Grower compensation below competitive
`levels. Tyson Foods, Inc. is the largest Integrator in the country, operating thirty-three Complexes
`located throughout the United States, and processing some 35.4 million Broilers weekly. Tyson
`accounts for nearly 22% of the total number of Broilers processed in the United States.
`9.
`Defendant Tyson Chicken, Inc. is a Delaware corporation headquartered in Springdale,
`Arkansas (and a wholly owned subsidiary of Tyson Foods, Inc.) that collusively shares nonpublic
`information through Agri Stats and otherwise engages in the conduct alleged herein with the aim and
`effect of suppressing Grower compensation below competitive levels.
`10.
`Defendant Tyson Breeders, Inc. is a Delaware corporation headquartered in Springdale,
`Arkansas (and a wholly owned subsidiary of Tyson Foods, Inc.) that collusively shares nonpublic
`information through Agri Stats and otherwise engages in the conduct alleged herein with the aim and
`effect of suppressing Grower compensation below competitive levels.
`11.
`Defendant Tyson Poultry, Inc. is a Delaware corporation headquartered in Springdale,
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`Case 5:20-cv-07049-NC Document 1 Filed 10/08/20 Page 5 of 34
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`Arkansas (and a wholly-owned subsidiary of Tyson Foods, Inc.) that collusively shares nonpublic
`information through Agri Stats and otherwise engages in the conduct alleged herein with the aim and
`effect of suppressing Grower compensation below competitive levels.
`12.
`Defendants Tyson Foods, Inc., Tyson Chicken, Inc., Tyson Breeders, Inc. and Tyson
`Poultry, Inc., are collectively referred to herein as “Tyson.”
`13.
`Defendant Pilgrim’s Pride Corporation is a Delaware corporation headquartered in
`Greeley, Colorado (“Pilgrim’s”) that collusively shares nonpublic information through Agri Stats and
`otherwise engages in the conduct alleged herein with the aim and effect of suppressing Grower
`compensation below competitive levels. JBS USA Holdings, Inc. holds a 75.3% controlling interest in
`Pilgrim’s. JBS USA Holdings, Inc. and Pilgrims are subsidiaries of JBS SA, a Brazilian corporation
`headquartered in Sao Paulo, Brazil. Pilgrim’s is the second largest Integrator in the country, operating
`twenty-six Complexes located throughout the United States and processing 33.1 million Broilers
`weekly, and accounting for more than 20% of the Broilers sold in the United States.
`14.
`Defendant Perdue Farms, Inc. (“Perdue”) is a Maryland corporation headquartered in
`Salisbury, Maryland that collusively shares nonpublic information through Agri Stats and otherwise
`engages in the conduct alleged herein with the aim and effect of suppressing Grower compensation
`below competitive levels. Perdue is the third largest Integrator in the country, operating twelve
`Complexes located throughout the United States and processing 12.01 million Broilers weekly, and
`accounting for more than 7% of the Broilers sold in the United States.
`15.
`Defendant Koch Foods, Inc. is a Delaware corporation headquartered in Park Ridge,
`Illinois that collusively shares nonpublic information through Agri Stats and otherwise engages in the
`conduct alleged herein with the aim and effect of suppressing Grower compensation below
`competitive levels. Koch Foods, Inc. is the fourth largest Integrator in the country, operating eight
`Complexes located throughout the United States and processing 12 million Broilers weekly, and
`accounting for more than 7% of the Broilers sold in the United States.
`16.
`Defendant Koch Meat Co., Inc., d/b/a Koch Poultry Co., is an Illinois corporation
`headquartered in Park Ridge, Illinois (and is a wholly-owned subsidiary of Koch Foods, Inc.) that
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`Case 5:20-cv-07049-NC Document 1 Filed 10/08/20 Page 6 of 34
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`collusively shares nonpublic information through Agri Stats and otherwise engages in the conduct
`alleged herein with the aim and effect of suppressing Grower compensation below competitive levels.
`Defendants Koch Foods, Inc., and Koch Meat, Co., Inc. are collectively referred to herein as “Koch.”
`17.
`Defendant Sanderson Farms, Inc. is a Mississippi corporation headquartered in Laurel,
`Mississippi that collusively shares nonpublic information through Agri Stats and otherwise engages
`in the conduct alleged herein with the aim and effect of suppressing Grower compensation below
`competitive levels. Sanderson Farms, Inc. is the fifth largest Integrator in the country, operating nine
`Complexes located throughout the United States and processing 8.62 million Broilers weekly, and
`accounting for 5.3% of the total Broiler sales in the United States.
`18.
`Defendant Sanderson Farms, Inc. (Foods Division) is a Mississippi corporation
`headquartered in Laurel, Mississippi (and a wholly-owned subsidiary of Sanderson Farms, Inc.) that
`collusively shares nonpublic information through Agri Stats and otherwise engages in the conduct
`alleged herein with the aim and effect of suppressing Grower compensation below competitive levels.
`19.
`Defendant Sanderson Farms, Inc. (Production Division) is a Mississippi corporation
`headquartered in Laurel, Mississippi (and a wholly-owned subsidiary of Sanderson Farms, Inc.) that
`collusively shares nonpublic information through Agri Stats and otherwise engages in the conduct
`alleged herein with the aim and effect of suppressing Grower compensation below competitive levels.
`20.
`Defendant Sanderson Farms, Inc. (Processing Division) is a Mississippi corporation
`headquartered in Laurel, Mississippi (and a wholly owned subsidiary of Sanderson Farms, Inc.) that
`collusively shares nonpublic information through Agri Stats and otherwise engages in the conduct
`alleged herein with the aim and effect of suppressing Grower compensation below competitive levels.
`21.
`Defendants Sanderson Farms, Inc., Sanderson Farms, Inc. (Foods Division),
`Sanderson Farms, Inc. (Production Division), and Sanderson Farms, Inc. (Processing Division), are
`collectively referred to herein as “Sanderson.”
`22.
`Defendants Tyson, Pilgrim’s, Perdue, Koch, and Sanderson are collectively referred
`to herein as “Defendants.”
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`Case 5:20-cv-07049-NC Document 1 Filed 10/08/20 Page 7 of 34
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`III. AGENTS AND CO-CONSPIRATORS
`23.
`Agri Stats, Inc. (“Agri Stats”) is an Indiana Corporation located in Fort Wayne,
`Indiana and is a subsidiary of Eli Lilly & Co. Eli Lilly & Co. is an Indiana corporation located in
`Indianapolis, Indiana. Agri Stats, which purports to be a third-party data aggregation service, served
`as a conduit by which the Cartel shared, inter alia, detailed, competitively sensitive, non- public
`information about Grower compensation.
`24.
`Foster Farms is an Integrator that collusively shares nonpublic information through
`Agri Stats and otherwise engages in the conduct alleged herein with the aim and effect of suppressing
`Grower compensation below competitive levels.
`25. Mountaire Farms is an Integrator that collusively shares nonpublic information
`through Agri Stats and otherwise engages in the conduct alleged herein with the aim and effect of
`suppressing Grower compensation below competitive levels.
`26. Wayne Farms is an Integrator that collusively shares nonpublic information through
`Agri Stats and otherwise engages in the conduct alleged herein with the aim and effect of suppressing
`Grower compensation below competitive levels.
`27.
`George’s, Inc. is an Integrator that collusively shares nonpublic information through
`Agri Stats and otherwise engages in the conduct alleged herein with the aim and effect of suppressing
`Grower compensation below competitive levels.
`28.
`Peco Foods, Inc. is an Integrator that collusively shares nonpublic information through
`Agri Stats and otherwise engages in the conduct alleged herein with the aim and effect of suppressing
`Grower compensation below competitive levels.
`29.
`House of Raeford Farms is an Integrator that collusively shares nonpublic information
`through Agri Stats and otherwise engages in the conduct alleged herein with the aim and effect of
`suppressing Grower compensation below competitive levels.
`30.
`Simmons Foods is an Integrator that collusively shares nonpublic information through
`Agri Stats and otherwise engages in the conduct alleged herein with the aim and effect of suppressing
`Grower compensation below competitive levels.
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`Case 5:20-cv-07049-NC Document 1 Filed 10/08/20 Page 8 of 34
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`31.
`Keystone Foods, Inc. is an Integrator that collusively shares nonpublic information
`through Agri Stats and otherwise engages in the conduct alleged herein with the aim and effect of
`suppressing Grower compensation below competitive levels.
`32.
`Fieldale Farms Corp. is an Integrator that collusively shares nonpublic information
`through Agri Stats and otherwise engages in the conduct alleged herein with the aim and effect of
`suppressing Grower compensation below competitive levels.
`33.
`O.K. Industries is an Integrator that collusively shares nonpublic information through
`Agri Stats and otherwise engages in the conduct alleged herein with the aim and effect of suppressing
`Grower compensation below competitive levels.
`34.
`Case Foods is an Integrator that collusively shares nonpublic information through Agri
`Stats and otherwise engages in the conduct alleged herein with the aim and effect of suppressing
`Grower compensation below competitive levels.
`35. Marshall Durbin Companies is an Integrator that collusively shares nonpublic
`information through Agri Stats and otherwise engages in the conduct alleged herein with the aim and
`effect of suppressing Grower compensation below competitive levels.
`36.
`Amick Farms, Inc. is an Integrator that collusively shares nonpublic information
`through Agri Stats and otherwise engages in the conduct alleged herein with the aim and effect of
`suppressing Grower compensation below competitive levels.
`37.
`Claxton Poultry Farms (collectively with the non-parties identified in Paragraphs 25
`through 38, supra, “Non-Defendant Co-Conspirators”), is an Integrator that collusively shares
`nonpublic information through Agri Stats and otherwise engages in the conduct alleged herein with
`the aim and effect of suppressing Grower compensation below competitive levels.
`IV.
`JURISDICTION AND VENUE
`38.
`This Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1337, as
`this action arises under the Packers and Stockyards Act of 1921, 7 U.S.C. § 192, Section 1 of the
`Sherman Antitrust Act, 15 U.S.C. § 1, and Sections Four and Sixteen of the Clayton Act Antitrust
`Act of 1914, 15 U.S.C. §§ 15 and 26.
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`39.
`This Court has personal jurisdiction over each of the Defendants under Section Twelve
`of the Clayton Act, 15 U.S.C. § 22, Federal Rule of Civil Procedure 4(h)(1)(A), and the long-arm
`statute of the forum state.
`40.
`Defendants, directly or through their agents, subsidiaries, affiliates, or parents may be
`found in and transact business in the forum state, including the domestic sale of Broilers.
`41.
`Defendants, directly or through their agents, engage in interstate commerce in the
`production, processing, and distribution of Broilers for sale in the United States.
`42.
`Venue is proper in this District pursuant to Section 12 of the Clayton Act, 15 U.S.C.
`§ 22, and 28 U.S.C. § 1391, because one or more Defendants maintain business facilities, have agents,
`transact business, and are otherwise found within this District, and certain of the unlawful acts alleged
`herein were performed and had effects within this District.
`V.
`FACTUAL BACKGROUND
`:e Broiler Grow-Out Services Industry
`43.
`Broilers—young chickens bred for meat—account for nearly all domestic chicken
`consumption.1 Broiler production is concentrated into localized networks of production dominated
`by vertically integrated poultry companies (“Integrators”). Integrators (such as Defendants herein)
`control virtually every aspect of Broiler production, although they do not care for the birds
`themselves. Instead, they enter into so-called contract farming arrangements (“CFAs”), also known
`as “poultry growing arrangements,” with thousands of Growers, which are predominately small,
`family-owned farm operations that provide the Integrators with Broiler Grow-Out Services until the
`birds reach slaughtering age. Broiler Growers operating under CFAs care for over 97% of domestic
`Broilers produced annually in the United States. For decades, there has not been a spot or cash market
`for Broilers, largely because Defendants and Co- Conspirators, through their vertically integrated
`operations, control all aspects of Broiler production and do not obtain Broilers other than through
`CFAs.
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`1 pe term “Broilers” as used here excludes specialty chicken that is grown, processed, and sold
`according to, for example, halal, kosher, free range, pasture-raised, or organic standards.
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`44.
`Defendants Tyson, Pilgrim’s, Perdue, Koch, and Sanderson are by far the five largest
`Integrators operating in the United States, collectively contracting for over 60% of the Broiler Grow-
`Out Services performed in the United States.
`45.
`Commercial poultry production began in the United States in the 1930s with the
`development of the Broiler—a chicken specifically bred for meat (prior to that, poultry was generally
`a byproduct of egg production). At that time, hatcheries, feed mills, farms, and processors were
`generally all non-affiliated separate entities.
`46.
`Hatcheries (where Breeder eggs are hatched to be raised as Broilers) have vertically
`coordinated activities between the feed mill operators, Growers, and processors. Feed mill operators
`began to extend credit to Growers to buy baby chicks and the necessary feed. When the flock became
`market-ready, the Grower would sell the chicken to the processor and pay off the debt it owed to the
`feed mill operator.
`47.
`In the middle of the century, a dramatic shift took place in the way that poultry was
`raised for consumption. By the 1960s, some ninety percent of Broilers came from vertically integrated
`operations that owned or otherwise controlled the hatcheries, feed mills, farms, and processors.
`48.
`The result of this market shift was the creation of the modern Broiler industry, the
`most vertically integrated segment of agriculture today. There are only approximately 25 Integrators
`in the nation. They supply their vertically integrated production complexes (“Complexes”) with
`Broilers cared for pursuant to agreements with approximately thirty- thousand poultry growers.
`Complexes typically include one or more hatcheries, feed mills, slaughter plants, and further
`processing plants that are owned and operated by the Integrator.
`49.
`Defendants have devised a system of “factory farming” that effectively transfers the
`risk of Broiler production from them on to Growers.
`50. While not caring for the birds themselves, Integrators (such as Defendants) control
`virtually every aspect of the Broiler Grow-Out process including: the genetics of the Broilers; the
`amount, type and timing of the Broilers delivered to a Grower to care for; the composition, amount,
`and delivery schedule of feed; the distribution of medical services and medication; the structure,
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`Case 5:20-cv-07049-NC Document 1 Filed 10/08/20 Page 11 of 34
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`temperature, ventilation, lighting duration, and other environmental aspects of the Broiler houses; the
`decision of whether to cull or condemn Broilers; the length of time that Growers are permitted to care
`for the Broilers; the time, method, and manner that Broilers will be picked up for processing; the time
`between when Broilers are picked up and when they are weighed; and the disposal method of birds
`and their excrement by the Growers.
`51.
`Growers use land they have purchased and developed for the purpose of caring for
`Broilers to take-in Broilers owned by the Integrators, and care for those Broilers until the Integrators
`decide to take them back, bearing all of the physical, environmental and health impacts from caring
`for the birds, even though the Growers never own the animals.2
`52.
`Integrators provide birds, feed, veterinary services, and mandated supervision to their
`Growers; the Growers provide labor, utilities, and substantial up-front investment capital required to
`care for the Broilers to slaughtering age, i.e., Broiler Grow-Out Services. The Growers are responsible
`for investing the capital needed to build and maintain Broiler houses, maintain ownership of the land
`upon which the Broiler houses are located, provide the equipment, care for the Broilers (pursuant to
`Defendants’ exclusive specifications), and pay for all labor needed to successfully care for the
`Broilers until they reach slaughtering age (which is determined by the Integrator in its sole discretion).
`53.
`The Integrators determine the precise specifications for Grower’s grow-out houses and
`other equipment. Integrators typically provide little to no capital for the grow-out facilities, although
`such facilities must be built to Integrators’ precise, onerous, and sometimes arbitrary specifications.
`Growers are prohibited from using any inputs (e.g., birds, feed, or medicine) other than those provided
`by their Integrator, from raising or caring for Broilers provided by any competing Integrator, or from
`raising or caring for other poultry or ratites of their own or obtained from any other source.
`54.
`Growers must also maintain roads to their facilities, provide utilities and other fixed
`costs (including purchasing land and building grow-out facilities), and dispose of dead birds (even if
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`2 pe Packers & Stockyards Act defines “poultry growers” as persons engaged in the business of
`raising and caring for live poultry for slaughter by another, regardless whether the poultry is owned by
`such person or by another but not an employee of the owner of such poultry. See 7
`U.S.C. § 183(a)(8).
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`the Integrator delivers dead Broilers). Integrators have an unlimited right to enter Growers’ facilities
`to inspect birds, and can seize Growers’ facilities—taking control until such time as the birds are
`ready for processing—if the Integrator determines in its sole discretion that the Grower is not
`performing adequately.
`55.
`CFAs are substantially similar across Integrators, with nearly identical terms
`governing Integrator control and Grower compensation.
`56.
`Defendants require Growers to be exclusive to one Integrator. The Cartel members do
`not permit Growers to provide Broiler Grow-Out Services for any other Integrator, even if their
`Integrator delays delivery of chicks or fails to deliver chicks at all and even if they could keep separate
`grow-out facilities on their farms or another separate farm owned by the Grower for each specific
`Integrator.
`57.
`Growers often go into substantial debt to begin providing Grow-Out Services. A single
`grow-out house can cost $300,000 or more. According to one study, while the average Grower
`surveyed had been in the Broiler business for 16 years, one-third still had more than $200,000 in total
`farm debt.
`58.
`Integrators have the most power over Growers when Growers are laden with debt from
`building or upgrading the grow-out facilities. Thus, Integrators are keenly aware of Growers’ debt
`burdens, and require them to undertake unnecessary and expensive upgrades to their facilities to prevent
`their financial independence—with the intent of keeping Growers debt- laden.
`59.
`Even a relatively well-performing Grower will often spend fifteen to twenty-five years
`recouping his or her investment or paying down its debt, and for those less fortunate, the possibility
`of economic independence is simply a fiction.
`60.
`One prominent commentator observes that “[o]nce one enters the life of a grower, the
`trap is closed: high capital costs and large debt to enter the business, no input on product prices, no
`market in which to sell the goods and no way out except bankruptcy[.]”
`61.
`Due to the control Integrators have over the grow-out process under their CFAs,
`Integrators are also the sole keepers of information that Growers need to estimate their expected profits.
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`Case 5:20-cv-07049-NC Document 1 Filed 10/08/20 Page 13 of 34
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`Although Integrators have information concerning Grower compensation, expected returns, and likely
`costs, Integrators intentionally do not provide such critical information to Growers. The information
`Integrators do provide to Growers is either misrepresented or omits material information—usually
`both.
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`62. While the Cartel shares detailed confidential information amongst its members
`regarding Grower compensation (including information sufficient to allow Integrators to determine
`Cartel members’ compensation to individual Growers), typically Growers are subject to strict
`confidentiality requirements and strictly prohibited from sharing information on compensation with
`other Growers under their CFAs. These agreements have at times prevented some Growers from even
`sharing the terms of their agreements with lenders or other third-parties involving with financing.
`63.
`In 2015, the domestic Broiler industry produced almost 9 billion Broilers, weighing 53
`billion pounds “liveweight.” That same year, Americans spent $90 billion buying chicken—making it
`the number one protein consumed in the United States.
`VI. Defendants’ Anticompetitive Scheme:
`(1) Unlawful Information Exchange Cartel
`64.
`Since at least 2008, and likely earlier, as part of their Scheme to artificially suppress
`Grower compensation, Defendants and their Co-Conspirators have agreed to and have shared with
`themselves (but not with Growers) detailed Grower compensation information.
`65.
`This conspiracy has been effectuated in large part through the collusive dissemination
`of critical and sensitive business data through Agri Stats. Agri Stats is a “statistical research and
`analysis firm.” It is a self-described “management reporting and benchmarking company,” that
`“provides consultation on data analysis, action plan development and management practices of
`participating companies.” Its mission is “[t]o improve the bottom line profitability of [its] participants
`by providing accurate and timely comparative data . . . .”
`66.
`Co-Conspirators’ exchange of information on Grower compensation is anticompetitive,
`and has resulted in lower compensation for all Growers than each would have received in a competitive
`market.
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`67.
`Agri Stats “partners” with Integrators. All Cartel members, including, e.g., all
`Defendants, disseminate the granular information described below through Agri Stats as part of the
`Scheme alleged herein. Cartel members comprise some 120 Complexes, amounting to about 98% of
`Broiler production in the United States. This data that all Defendants share through Agri Stat