Case 1:20-cv-02764-NYW Document 1 Filed 09/11/20 USDC Colorado Page 1 of 40
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF COLORADO
`
`
`MARC MCENTIRE and KAREN MCENTIRE, on
`behalf of themselves and all others similarly
`situated,
`
`
`
`
`
`Civil Case No.:
`
`ANTITRUST CLASS
`ACTION COMPLAINT
`
`JURY TRIAL DEMANDED
`
`Plaintiffs,
`
`v.
`
`TYSON FOODS, INC., TYSON CHICKEN, INC.,
`TYSON BREEDERS, INC., TYSON POULTRY,
`INC., PILGRIM’S PRIDE CORPORATION,
`PERDUE FOODS, LLC, KOCH FOODS, INC.,
`KOCH MEAT CO., INC. d/b/a KOCH POULTRY
`CO., SANDERSON FARMS, INC., SANDERSON
`FARMS, INC. (FOOD DIVISION), SANDERSON
`FARMS, INC. (PROCESSING DIVISION), and
`SANDERSON FARMS, INC. (PRODUCTION
`DIVISION),
`
`
`Defendants.
`
`
`
`Plaintiffs Marc McEntire and Karen McEntire (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
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`Section 202 of the Packers and Stockyards Act, demanding a trial by jury of all issues so triable.
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`Plaintiffs allege the following, based upon personal knowledge as to matters relating to
`
`themselves, and upon information and belief and the investigation of counsel as to all other
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`matters:
`
`NATURE OF THE ACTION
`
`1.
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`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
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`vertically-integrated poultry company defendants (“live poultry dealers” or “Integrators”), which
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`operate Broiler processing plants (“Complexes”), concerning the Integrators’ anticompetitive,
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`collusive, predatory, unfair, and bad faith conduct in the domestic market for Broiler growing
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`services (also referred to herein as “Broiler Grow-Out Services”). This case involves agreements
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`by the Defendants (defined below) and their Co-Conspirators (defined more fully, infra, and
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`together with the Defendants, the “Cartel”) not to compete for Broiler Grow-Out Services, with
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`the purpose and effect of fixing, maintaining, and/or stabilizing Grower compensation below
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`competitive levels. While the conduct alleged herein began as early as 2008, with respect to
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`Defendant Pilgrim’s (defined below) only, Plaintiffs are not pursuing on behalf of themselves or
`
`the proposed Class any cause of action against Pilgrim’s arising from, or that relies on, any fact,
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`event, omission, liability, or damage that occurred on or before December 28, 2009 (the
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`“Discharge Date”). Plaintiffs are only pursuing causes of action against Pilgrim’s that arise from,
`
`or that rely on, facts, events, omissions, liabilities, or damages that occurred after the Discharge
`
`Date.
`
`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
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`Grower compensation below competitive levels. By disclosing their highly sensitive and
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`confidential compensation rates to each other, they suppressed competition for Broiler Grow-Out
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`Services and drove down compensation to all Growers. By sharing this information on a frequent
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`and contemporaneous basis, the Cartel has been able to keep Grower compensation lower than it
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`would have been in a competitive market, and to keep the increased profits for themselves. This
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`illegal information exchange, combined with other anticompetitive conduct alleged herein, drove
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`down Grower compensation nationwide. The members of the Cartel recognized the benefits of
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`sharing this highly sensitive, proprietary and otherwise confidential Grower compensation
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`information with each other, but not with the Growers themselves.
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`3.
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`In furtherance of their agreement not to compete for Broiler Grow-Out Services,
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`Cartel members also agreed not to solicit Growers associated with other Integrators. By agreeing
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`not to compete for the services of one another’s Growers, the Cartel members attempted to
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`insulate themselves from normal competitive pressures that could potentially erode the effects of
`
`their 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
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`furthered its efforts to artificially suppress Grower compensation below competitive levels.
`
`4.
`
`These agreements (together, the “Scheme”) were designed to keep Growers, as
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`author Christopher Leonard noted in The Meat Racket: The Secret Takeover of America’s Food
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`Business, “in a state of indebted servitude, living like modern-day sharecroppers on the ragged
`
`edge of bankruptcy.”
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`PARTIES AND THE BIG FIVE INTEGRATORS
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`Plaintiffs Mark McEntire and Karen McEntire began providing Broiler Grow-Out
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`5.
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`Services for Defendant Pilgrim’s (defined infra) in Texas in 2004. Plaintiffs borrowed
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`approximately $100,000 to make improvements to three Broiler houses to Pilgrim’s
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`specifications. During the course of their time providing Broiler Grow-Out Services, Pilgrim’s
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`required that Plaintiffs make further investments to their Broiler houses. Plaintiffs borrowed or
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`spent at least another $20,000 making these improvements to their Broiler houses. Throughout
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`their time providing Broiler Grow-Out Services, Plaintiffs were barely able to make ends meet
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`with the compensation provided by Pilgrim’s. Plaintiffs would not have been able to make ends
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`meet with Pilgrim’s compensation, and so worked other full-time jobs while caring for Broilers.
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`In 2014, Plaintiffs quit providing Broiler Grow-Out Services and sold their property.
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`6.
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`Defendant Tyson Foods, Inc. is a Delaware corporation headquartered in
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`Springdale, Arkansas that collusively shares nonpublic information through Agri Stats and
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`otherwise engages in the conduct alleged herein with the aim and effect of suppressing Grower
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`compensation below competitive levels. Tyson Foods, Inc. is the largest Integrator in the
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`country, operating thirty-three Complexes located throughout the United States, and processing
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`some 35.4 million Broilers weekly. Tyson accounts for nearly 22% of the total number of
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`Broilers processed in the United States.
`
`7.
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`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.
`
`8.
`
`Defendant Tyson Breeders, Inc. is a Delaware corporation headquartered in
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`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.
`
`9.
`
`Defendant Tyson Poultry, 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.
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`10. Defendants Tyson Foods, Inc., Tyson Chicken, Inc., Tyson Breeders, Inc. and
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`Tyson Poultry, Inc., are collectively referred to herein as “Tyson.”
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`11. Defendant Pilgrim’s Pride Corporation is a Delaware corporation headquartered
`
`in Greeley, Colorado (“Pilgrim’s”) that collusively shares nonpublic information through Agri
`
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`Stats and otherwise engages in the conduct alleged herein with the aim and effect of
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`suppressing Grower compensation below competitive levels. JBS USA Holdings, Inc. holds a
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`75.3% controlling interest in Pilgrim’s. JBS USA Holdings, Inc. and Pilgrim’s 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
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`United States and processing 33.1 million Broilers weekly, and accounting for more than 20%
`
`of the Broilers sold in the United States.
`
`12. Defendant Perdue Foods, LLC (“Perdue”) is a Maryland limited liability
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`company headquartered in Salisbury, Maryland that collusively shares nonpublic information
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`through Agri Stats and otherwise engages in the conduct alleged herein with the aim and effect
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`of suppressing Grower compensation below competitive levels. Perdue is the third largest
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`Integrator in the country, operating twelve Complexes located throughout the United States
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`and processing 12.01 million Broilers weekly, and accounting for more than 7% of the Broilers
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`sold in the United States.
`
`13. Defendant Koch Foods, Inc. is a Delaware corporation headquartered in Park
`
`Ridge, Illinois that collusively shares nonpublic information through Agri Stats and otherwise
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`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.
`
`14. Defendant Koch Meat Co., Inc. d/b/a Koch Poultry Co. is an Illinois corporation
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`headquartered in Park Ridge, Illinois (and is a wholly-owned subsidiary of Koch Foods, Inc.)
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`that collusively shares nonpublic information through Agri Stats and otherwise engages in the
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`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.”
`
`15. Defendant Sanderson Farms, Inc. is a Mississippi corporation headquartered in
`
`Laurel, Mississippi that collusively shares nonpublic information through Agri Stats and
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`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
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`the country, operating nine Complexes located throughout the United States and processing
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`8.62 million Broilers weekly, and accounting for 5.3% of the total Broiler sales in the United
`
`States.
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`16. Defendant Sanderson Farms, Inc. (Foods Division) is a Mississippi corporation
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`headquartered in Laurel, Mississippi (and a wholly-owned subsidiary of Sanderson Farms,
`
`Inc.) that collusively shares nonpublic information through Agri Stats and otherwise engages
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`in the conduct alleged herein with the aim and effect of suppressing Grower compensation
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`below competitive levels.
`
`17. Defendant Sanderson Farms, Inc. (Production Division) is a Mississippi
`
`corporation headquartered in Laurel, Mississippi (and a wholly-owned subsidiary of Sanderson
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`Farms, Inc.) that collusively shares nonpublic information through Agri Stats and otherwise
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`engages in the conduct alleged herein with the aim and effect of suppressing Grower
`
`compensation below competitive levels.
`
`18. Defendant Sanderson Farms, Inc. (Processing Division) is a Mississippi
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`corporation headquartered in Laurel, Mississippi (and a wholly-owned subsidiary of Sanderson
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`Farms, Inc.) that collusively shares nonpublic information through Agri Stats and otherwise
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`engages in the conduct alleged herein with the aim and effect of suppressing Grower
`
`compensation below competitive levels.
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`19. Defendant Sanderson Farms, Inc., Sanderson Farms, Inc. (Foods Division),
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`Sanderson Farms, Inc. (Production Division), and Sanderson Farms, Inc. (Processing
`
`Division), are collectively referred to herein as “Sanderson.”
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`20. Tyson, Pilgrim’s, Perdue, Koch, and Sanderson are collectively referred to herein
`
`as “Defendants.”
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`AGENTS AND CO-CONSPIRATORS
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`Agri Stats, Inc. (“Agri Stats”) is an Indiana Corporation located in Fort Wayne,
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`21.
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`Indiana and is a subsidiary of Eli Lilly & Co. Eli Lilly & Co. is an Indiana corporation located in
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`Indianapolis, Indiana. Agri Stats, which purports to be a third-party data aggregation service,
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`served as a conduit by which the Cartel shared, inter alia, detailed, competitively sensitive, non-
`
`public information about Grower compensation.
`
`22.
`
`Foster Farms is an Integrator that collusively shares nonpublic information
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`through Agri Stats and otherwise engages in the conduct alleged herein with the aim and effect
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`of suppressing Grower compensation below competitive levels.
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`23. Mountaire Farms is an Integrator that collusively shares nonpublic information
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`through Agri Stats and otherwise engages in the conduct alleged herein with the aim and effect
`
`of suppressing Grower compensation below competitive levels.
`
`24. Wayne Farms is an Integrator that collusively shares nonpublic information
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`through Agri Stats and otherwise engages in the conduct alleged herein with the aim and effect
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`of suppressing Grower compensation below competitive levels.
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`25.
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`George’s, Inc. is an Integrator that collusively shares nonpublic information
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`through Agri Stats and otherwise engages in the conduct alleged herein with the aim and effect
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`of suppressing Grower compensation below competitive levels.
`
`26.
`
`Peco Foods, Inc. is an Integrator that collusively shares nonpublic information
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`through Agri Stats and otherwise engages in the conduct alleged herein with the aim and effect
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`of suppressing Grower compensation below competitive levels.
`
`27.
`
`House of Raeford Farms is an Integrator that collusively shares nonpublic
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`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.
`
`Simmons Foods is an Integrator that collusively shares nonpublic information
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`through Agri Stats and otherwise engages in the conduct alleged herein with the aim and effect
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`of suppressing Grower compensation below competitive levels.
`
`29.
`
`Keystone Foods, Inc. is an Integrator that collusively shares nonpublic
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`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.
`
`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.
`
`31.
`
`O.K. Industries is an Integrator that collusively shares nonpublic information
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`through Agri Stats and otherwise engages in the conduct alleged herein with the aim and effect
`
`of suppressing Grower compensation below competitive levels.
`
`32.
`
`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
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`suppressing Grower compensation below competitive levels.
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`33. Marshall Durbin Companies is an Integrator that collusively shares nonpublic
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`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.
`
`Amick Farms, Inc. is an Integrator that collusively shares nonpublic information
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`through Agri Stats and otherwise engages in the conduct alleged herein with the aim and effect
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`of suppressing Grower compensation below competitive levels.
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`35.
`
`Claxton Poultry Farms (collectively with the non-parties identified in Paragraphs
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`21 through 34, supra, “Non-Defendant Co-Conspirators” or “Co-Conspirators”), is an Integrator
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`that collusively shares nonpublic information through Agri Stats and otherwise engages in the
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`conduct alleged herein with the aim and effect of suppressing Grower compensation below
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`competitive levels.
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`JURISDICTION AND VENUE
`
`36.
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`This Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331 and
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`1337, as this action arises under the Packers and Stockyards Act of 1921, 7 U.S.C. § 192, Section
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`1 of the Sherman Antitrust Act, 15 U.S.C. § 1, and Sections Four and Sixteen of the Clayton Act
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`Antitrust Act of 1914, 15 U.S.C. §§ 15 and 26.
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`37.
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`This Court has personal jurisdiction over each of the Defendants under Section
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`Twelve of the Clayton Act, 15 U.S.C. § 22, Federal Rule of Civil Procedure 4(h)(1)(A), and the
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`long-arm statute of the forum state.
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`38.
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`Defendants, directly or through their agents, subsidiaries, affiliates, or parents
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`may be found in and transact business in the forum state, including the domestic sale of Broilers.
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`39.
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`Defendants, directly or through their agents, engage in interstate commerce in the
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`production, processing, and distribution of Broilers for sale in the United States.
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`40.
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`Venue is proper in this District pursuant to Section 12 of the Clayton Act, 15
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`U.S.C. § 22, and 28 U.S.C. § 1391, because one or more Defendants maintain business facilities,
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`have agents, transact business, and/or are otherwise found within this District, and certain of the
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`unlawful acts alleged herein were performed and had effects within this District.
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`FACTUAL BACKGROUND
`
`The Broiler Grow-Out Services Industry
`
`41.
`
`Broilers—young chickens bred for meat—account for nearly all domestic chicken
`
`consumption. Broiler1 production is concentrated into localized networks of production
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`dominated by vertically integrated poultry companies (Integrators). Integrators (such as
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`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
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`(“CFAs”), also known as “poultry growing arrangements,” with thousands of Growers, which
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`are predominately small, family-owned farm operations that provide the Integrators with Broiler
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`Grow-Out Services until the birds reach slaughtering age. Broiler Growers operating under CFAs
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`care for over 97% of domestic Broilers produced annually in the United States. For decades,
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`there has not been a spot or cash market for Broilers, largely because Defendants and their Co-
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`Conspirators, through their vertically integrated operations, control all aspects of Broiler
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`production and do not obtain Broilers other than through CFAs.
`
`42.
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`Defendants are by far the five largest Integrators operating in the United States,
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`collectively contracting for over 60% of the Broiler Grow-Out Services performed in the United
`
`States.
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`1 The 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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`43.
`
`Commercial poultry production began in the United States in the 1930s with the
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`development of the Broiler—a chicken specifically bred for meat (prior to that, poultry was
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`generally a byproduct of egg production). At that time, hatcheries, feed mills, farms, and
`
`processors were generally all non-affiliated separate entities.
`
`44.
`
`Hatcheries (where Breeder eggs are hatched to be raised as Broilers) have
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`vertically coordinated activities between the feed mill operators, Growers, and processors. Feed
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`mill operators began to extend credit to Growers to buy baby chicks and the necessary feed.
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`When the flock became market-ready, the Grower would sell the chicken to the processor and
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`pay off the debt it owed to the feed mill operator.
`
`45.
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`In the middle of the century, a dramatic shift took place in the way that poultry
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`was raised for consumption. By the 1960s, some ninety percent of Broilers came from vertically
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`integrated operations that owned or otherwise controlled the hatcheries, feed mills, farms, and
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`processors.
`
`46.
`
`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
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`Integrators in the nation. They supply their vertically integrated production complexes
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`(“Complexes”) with Broilers cared for pursuant to agreements with approximately thirty-
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`thousand poultry growers. Complexes typically include one or more hatcheries, feed mills,
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`slaughter plants, and further processing plants that are owned and operated by the Integrator.
`
`47.
`
`The Defendants and their Co-Conspirators have devised a system of “factory
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`farming” that effectively transfers the risk of Broiler production from them on to Growers.
`
`48. 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
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`Broilers; the amount, type and timing of the Broilers delivered to a Grower to care for; the
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`composition, amount, and delivery schedule of feed; the distribution of medical services and
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`medication; the structure, temperature, ventilation, lighting duration, and other environmental
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`aspects of the Broiler houses; the decision of whether to cull or condemn Broilers; the length of
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`time that Growers are permitted to care for the Broilers; the time, method, and manner that
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`Broilers will be picked up for processing; the time between when Broilers are picked up and
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`when they are weighed; and the disposal method of birds and their excrement by the Growers.
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`49.
`
`Growers use land they have purchased and developed for the purpose of caring
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`for Broilers to take-in Broilers owned by the Integrators, and care for those Broilers until the
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`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
`
`50.
`
`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
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`Growers are responsible for investing the capital needed to build and maintain Broiler houses,
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`maintain ownership of the land upon which the Broiler houses are located, provide the
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`equipment, care for the Broilers (pursuant to Defendants’ exclusive specifications), and pay for
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`all labor needed to successfully care for the Broilers until they reach slaughtering age (which is
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`determined by the Integrator in its sole discretion).
`
`51.
`
`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
`
`
`2 The 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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`facilities, although such facilities must be built to Integrators’ precise, onerous, and sometimes
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`arbitrary specifications. Growers are prohibited from using any inputs (e.g., birds, feed, or
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`medicine) other than those provided by their Integrator, from raising or caring for Broilers
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`provided by any competing Integrator, or from raising or caring for other poultry or ratites of
`
`their own or obtained from any other source.
`
`52.
`
`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
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`birds (even if the Integrator delivers dead Broilers). Integrators have an unlimited right to enter
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`Growers’ facilities to inspect birds, and can seize Growers’ facilities—taking control until such
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`time as the birds are ready for processing—if the Integrator determines in its sole discretion that
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`the Grower is not performing adequately.
`
`53.
`
`CFAs are substantially similar across Integrators, with nearly identical terms
`
`governing Integrator control and Grower compensation.
`
`54.
`
`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,
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`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
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`Grower for each specific Integrator.
`
`55.
`
`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
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`Grower surveyed had been in the Broiler business for 16 years, one-third still had more than
`
`$200,000 in total farm debt.
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`56.
`
`Integrators have the most power over Growers when Growers are laden with debt
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`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.
`
`57.
`
`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.
`
`58.
`
`One prominent commentator observes that “[o]nce one enters the life of a grower,
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`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[.]”
`
`59.
`
`Due to the control Integrators have over the grow-out process under their CFAs,
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`Integrators are also the sole keepers of information that Growers need to estimate their expected
`
`profits. Although Integrators have information concerning Grower compensation, expected
`
`returns, and likely costs, Integrators intentionally do not provide such critical information to
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`Growers. The information Integrators do provide to Growers is either misrepresented or omits
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`material information—usually both.
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`60. While the Cartel shares detailed confidential information amongst its members
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`regarding Grower compensation (including information sufficient to allow Integrators to
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`determine Cartel members’ compensation to individual Growers), typically Growers are subject
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`to strict confidentiality requirements and strictly prohibited from sharing information on
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`compensation with other Growers under their CFAs. These agreements have at times prevented
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`some Growers from even sharing the terms of their agreements with lenders or other third-parties
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`involved with financing.
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`61.
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`In 2015, the domestic Broiler industry produced almost 9 billion Broilers,
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`weighing 53 billion pounds “liveweight.” That same year, Americans spent $90 billion buying
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`chicken—making it the number one protein consumed in the United States.
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`Defendants’ Anticompetitive Scheme:
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`(1) Unlawful Information Exchange Cartel
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`62.
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`Since at least 2008, and likely earlier, and continuing through the present, as part
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`of their Scheme to artificially suppress Grower compensation, Defendants and their Co-
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`Conspirators have agreed to and have regularly and continuously shared with themselves (but not
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`with Growers) detailed Grower compensation information.
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`63.
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`This conspiracy has been effectuated in large part through the collusive
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`dissemination of critical and sensitive business data through Agri Stats. Agri Stats is a “statistical
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`research and analysis firm.” It is a self-described “management reporting and benchmarking
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`company,” that “provides consultation on data analysis, action plan development and
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`management practices of participating companies.” Its mission is “[t]o improve the bottom line
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`profitability of [its] participants by providing accurate and timely comparative data . . . .”
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`64.
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`Co-Conspirators’ exchange of
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`information on Grower compensation
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`is
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`anticompetitive, and has resulted in lower compensation for all Growers than each would have
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`received in a competitive market.
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`65.
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`Agri Stats “partners” with Integrators. All Cartel members, including, e.g.,
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`Defendants, disseminate the granular information described below through Agri Stats as part of
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`the Scheme alleged herein. Cartel members comprise some 120 Complexes, amounting to about
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`98% of Broiler production in the United States. This data that all the Defendants share through
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`Case 1:20-cv-02764-NYW Document 1 Filed 09/11/20 USDC Colorado Page 16 of 40
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`Agri Stats includes production information on individual Complexes, broken down by region as
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`well as viewable at the “farm [i.e., Grower], flock [i.e., transaction], or plant [i.e., Complex]
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`level;” in other words, the information is not aggregated, but disaggregated down to the
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`transaction level.
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`66.
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`Cartel members provide granular data to Agri Stats. The data includes, inter alia:
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`a. Grower compensation;
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`b. the sex, breed, genetic makeup, and genetics company used for the primary
`breeder stock of the Broilers used by each Complex’s Integrator;
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`c. the type of equipment and grow-out houses used by each Complex’s
`Integrator, including numerous mechanical aspects of the facilities;
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`d. Broiler weight for each Complex;
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`e. the type of feed and medicine utilized by (and costs for) each Complex;
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`f. Broiler transportation costs from Grow-Out facilities to each Complex;
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`g. the number of chicks delivered, bird mortality by week and overall
`percentage, average daily weight gain by chicks (weighted against the feed
`utilized, referred to as a feed-conversion ratio) for each Complex;
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`h. live pound of Broiler produced per square foot of grow-out house for each
`Complex;
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`i. monthly operating profit per live pound, sales per live pound, and costs per
`live pound for each Complex;
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`j. anticipated capacity and future output for each Complex; and
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`k. the general geographic location of each Complex by Sub-Region (Agri Stats
`includes at least 50 and likely more Sub-Region identifier codes).
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`67.
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`The shared data can also be viewed by geographic region as opposed to by
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`Complex.
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`68.
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`The shared data is provided to, and disseminated by, Agri Stats on a weekly basis.
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`All members of the Cartel have continuously, regularly, reciprocally, and actively contributed
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`data to, and received data from, Agri Stats, at least as far back as 2008. Specifically, Pilgrim’s
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`Case 1:20-cv-02764-NYW Document 1 Filed 09/11/20 USDC Colorado Page 17 of 40
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`reciprocally contributed data to, and received data from, Agri Stats as part of the Scheme in the
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`relevant years predating the Discharge Date. Pilgrim’s took acts in furtherance of, and as a full
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`participant in, the Scheme after the Discharge Date. After the Discharge Date, Pilgrim’s actively,
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`regularly, continuously, and reciprocally contributed