Case: 1:19-cv-08318 Document #: 173 Filed: 10/19/20 Page 1 of 18 PageID #:1506
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`IN THE UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF ILLINOIS
`EASTERN DIVISION
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` No. 19 C 8318
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` Judge Virginia M. Kendall
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`MEMORANDUM OPINION AND ORDER
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`OLEAN WHOLESALE GROCERY
`COOPERATIVE, INC., JOHN GROSS
`AND COMPANY, INC., and on behalf of
`a putative class,
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` Plaintiffs,
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` v.
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`AGRI STATS, INC., et al.,
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` Defendants.
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`
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`This is an antitrust case brought by direct purchasers of turkey products against several
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`turkey wholesalers and a company that produces statistical reports about the agricultural industry.
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`The Complaint alleges that Defendants conspired, in violation of Section 1 of the Sherman Act, to
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`exchange competitively sensitive information and that this exchange caused Plaintiffs to pay more
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`for turkey than they would have under normal market conditions. Defendants now move to dismiss
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`the Complaint for failure to state a claim. For the reasons set forth below, the Joint Motion
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`(Dkt. 144) is largely denied, Kraft’s Motion (Dkt. 146) is granted, Farbest’s Motion (Dkt. 150) is
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`denied, and Cooper’s Motion (Dkt. 148) is denied.
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`BACKGROUND
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`I.
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`The Parties
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`Plaintiff Olean Wholesale Grocery Cooperative, Inc. (“Olean”) is a retailers’ cooperative,
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`the members of which are independent, family-owned supermarkets located in New York,
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`Pennsylvania, and Ohio. (Dkt. 1 ¶ 38.) Olean purchased turkey from one or more of the Turkey
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`1
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`Defendants1 during the Class Period.2 (Id.) John Gross and Company, Inc. (“John Gross”) is a food
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`distributor located in Pennsylvania that purchased turkey directly from one or more of the Turkey
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`Defendants during the Class Period. (Id. ¶ 39.)
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`The Turkey Defendants are the leading suppliers of turkey in the United States, together
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`controlling approximately 80% of the country’s wholesale turkey market. (Id. ¶ 1.) Defendant Agri
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`Stats is a company that provides “secretive information exchange services” to companies in a
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`variety of agricultural sectors, including the turkey sector. (Id. ¶ 2.) Plaintiffs allege that the Turkey
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`Defendants entered into an agreement between 2010 and 2017 to exchange competitively sensitive
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`information—namely, production and sales data. (Id. ¶ 3.) They exchanged this data with one
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`another through Agri Stats. (Id.)
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`According to slides from a 2010 Agri Stats presentation, each Turkey Defendant (or brands
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`associated with each of them), provided data to Agri Stats, which Agri Stats used to produce
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`industry reports. (Id. ¶¶ 8–9.) The data provided to Agri Stats was “current and forward-looking.”
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`(Id. ¶ 10.) Agri Stats identified the participants that provided data for each report, so Turkey
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`Defendants understood which companies contributed data to the reports. (Id. ¶ 81.) Although Agri
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`Stats reports do not specifically connect particular data sets to individual producers, the data was
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`sufficiently detailed such that each Turkey Defendant could infer the company to which each data
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`set referred. (Id. ¶ 18.) The reports provide information specific to each turkey producer as to
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`profits, prices, costs, and production levels. (Id. ¶ 10.) One confidential witness explained that one
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`company had five separate facilities listed in an Agri Stats report, which made it simple to
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`1 The Court uses the term “Turkey Defendants” to refer collectively to: Butterball LLC (“Butterball”), Cargill, Inc.
`and Cargill Meat Solutions Corp. (together, “Cargill”), Cooper Farms, Inc. (“Cooper”), Farbest Foods, Inc.
`(“Farbest”), Hormel Foods Corp and Hormel Foods, LLC (collectively, “Hormel”), House of Raeford Farms, Inc.
`(“Raeford”), Kraft Heinz Foods Company and Kraft Foods Groups Brands, LLC (collectively, “Kraft”), Perdue Farms,
`Inc. and Perdue Foods, LLC (collectively, “Perdue”), and Tyson Foods, Inc., the Hillshire Brands Company, Tyson
`Fresh Meats, Inc., and Tyson Prepared Foods, Inc. (collectively, “Tyson”).
`2 The Class Period is January 1, 2010 through January 1, 2017. (Dkt. 1 at 4.)
`2
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`determine the identity of that company even though the report did not specifically state the name
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`of the company. (Id. ¶ 18.)
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`Agri Stats marketed its reports as giving the Turkey Defendants the ability to improve their
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`profitability. (Id. ¶ 11.) Its reports identified opportunities for the Turkey Defendants to raise prices
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`to meet those of their competitors. (Id.)
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`Agri Stats reports were only made available to turkey producers and not to any buyers in
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`the market. (Id. ¶ 10.) In order to receive the reports, Agri Stats its clients charged “hefty fees.”
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`(Id.) The information in the reports was not otherwise publicly available. (Id.) Agri Stats only
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`allowed a company to access the data in its reports if the company contributed its own data to the
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`report, thus ensuring that only the Turkey Defendants and similarly situated producers would have
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`access to the data. (Id. ¶ 29.) Producers that comprise ninety-five percent of the turkey market used
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`Agri Stats’s turkey reports during the Class Period. (Id. ¶ 74.) Turkey Defendants received monthly
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`detailed reports and graphs from Agri Stats that allowed each of them to compare their
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`performance, prices, and costs to those of other Turkey Defendants. (Id. ¶ 76.) Agri Stats also
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`issued reports regarding live operations, processing, further reprocessing, feed costs, and sales.
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`(Id.) The sales data contained in those reports was less than six weeks old. (Id. ¶ 78.)
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`Industry participants relied on Agri Stats reports in the analysis of their business operations.
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`(Id. ¶ 12.) Hormel, for example, stated in a 2011 presentation that “Jennie-O Turkey Store3 is
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`consistently one of the top companies in operating profits (Agri Stats).” (Id.) A confidential
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`witness who was a sales executive at Butterball explained that Butterball used the Agri Stats
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`reports to “evaluate—by item, item group, price, distribution—where we stood against other
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`turkey companies” and that the reports played an important role in Butterball’s price-setting
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`3 Jennie-O is a Hormel turkey brand. (Dkt. 1 ¶ 9.)
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`3
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`process. (Id. ¶ 13.) A confidential witness who was an accountant at Cooper explains that Cooper
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`executives met with Agri Stats representatives every six months and that information received
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`from Agri Stats helped Cooper improve its returns per pound. (Id. ¶¶ 14–15.)
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`In the chicken industry, Agri Stats’s reports contain data on “the number of broilers placed,
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`chick mortality by week and percentage, chick cost, days between flocks provided to contract
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`farmers, feed conversion rates, and average daily weights. (Id. ¶ 17.) The information provided in
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`reports for the turkey industry is substantially similar. (Id.) Having access to this data enabled the
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`Turkey Defendants to monitor industry-wide supply levels. (Id.)
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`In the pork industry, Agri Stats’s reports enable subscribers to compare the prices they
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`charge against the national average net price and against the national top 25 percent average price.
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`(Id. ¶ 79.) These details enabled subscribers to see how much more they could charge if they
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`charged the national average or a top-25-percent price. (Id.) The information provided in Agri
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`Stats’s turkey reports—the uses to which the information can be put—is substantially similar in
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`the turkey market. (Id.)
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`The Agri Stats turkey reports served to improve Turkey Defendants’ profitability.
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`(Id. ¶ 83.) The reports accomplish this by ranking the companies by profitability and providing
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`each subscriber with its variance from the average profitability. (Id.) A confidential witness
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`explains that Agri Stats gave live presentations to Turkey Defendants to explain to them how to
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`use the reports to compare themselves against competitors. (Id. ¶ 87.)
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`Throughout the Class Period, the number of turkeys slaughtered remained relatively stable,
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`but prices increased dramatically. (Id. ¶¶ 20–21, 30, 108.)4 In other words, demand appeared to
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`rise, but turkey production did not rise to meet that demand. (Id. ¶ 21.)
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`4 The Complaint says that “industry supply decreased significantly from 2009 to 2015, but Figure 1 shows that the
`market experienced small rates of changes year-over-year in terms of heads slaughtered. (Id. ¶ 108.)
`4
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`During earnings calls during the Class Period, Hormel repeatedly discussed the industry’s
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`success in cutting production and maintaining industry-wide production discipline. (Id. ¶ 23.)
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`In addition to contributing to Agri Stats’s reports, the Turkey Defendants had frequent
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`opportunities to communicate because they were members of various trade associations. (Id. ¶ 22.)
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`The National Turkey Federation held annual meetings during the Class Period; these meetings
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`were widely attended by executives of the Turkey Defendants. (Id. ¶¶ 22, 126.) These meetings
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`gave industry participants regular, informal opportunities to meet in-person and discuss pricing
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`and production in the turkey industry. (Id. ¶ 126.) Butterball, Cargill, Foster, Tyson, and Perdue
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`all have representatives on the Board of Directors of the U.S. Poultry & Egg Association, and that
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`Board holds quarterly meetings. (Id. ¶ 129.) Butterball, Cargill, Hormel, and Tyson also have
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`representatives on the North American Meat Institute (NAMI), an organization that represents
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`70% of the turkey industry and which holds annual summits. (Id. ¶ 130.)
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`Plaintiffs allege that the turkey industry has several characteristics that make it likely that
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`information exchanges will cause anticompetitive effects; namely, the product is fungible, the
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`market has price-based competition, demand for turkey is relatively inelastic, and the market
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`features a trend toward price uniformity. (Id. ¶¶ 28, 103–07.)
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`Beginning in 2010, the turkey industry experienced upward price movements that cannot
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`be explained by increased costs. (Id. ¶ 109.) Jennie-O Turkey for example, began experiencing a
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`divergence between revenue and costs in or around 2010. (Id. ¶ 111–13.) At this same time, prices
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`for turkey began to increase across the market, but production did not increase accordingly.
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`(Id. ¶ 115.)
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`5
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`Following the commencement of the litigation in the Broiler Chickens case,5 which also
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`involved the sharing of information via Agri Stats, the price of turkey dropped precipitously.
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`(Id. ¶ 31.) Immediately preceding the commencement of that litigation, turkey prices had risen to
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`“unprecedented levels.” (Id.) Indeed, immediately prior to the Broiler Chicken litigation, the gap
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`between feed costs and turkey prices was significant. (Id. ¶ 32.) In prior eras, movement in feed
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`costs closely tracked the cost of turkey. (Id.) Regression models illustrate that beginning in or
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`about 2010, the price of turkey feed and the price of a turkey hen began to diverge in unprecedented
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`ways. (Id. ¶117.) According to Plaintiffs, that the prices did not track the historical trend during
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`the Class Period is a direct result of the information exchange facilitated by Agri Stats. (Id. ¶ 33.)
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`The relevant market for this antitrust claim is turkey for consumption market in the United
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`States. (Id. ¶ 89.) There is a single nationwide market for turkey for consumption in the United
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`States. (Id. ¶ 90.)
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`The U.S. turkey market has high barriers to entry. (Id. ¶ 92–93.) A new entrant would face
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`costly and lengthy start-up costs, including multi-million-dollar costs for research and
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`development, equipment, energy, transportation, distribution, labor, regulatory approvals, etc.
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`(Id. ¶ 93.)
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`The market also has experienced increased consolidation over the past several decades.
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`(Id. ¶ 95.) In the 1970s, for example, the turkey market contained dozens of competitors who
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`worked with independent farmers. (Id.) Today, by contrast, four corporations—Cargill, Hormel,
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`Butterball, and Farbest—produce more than half of the turkey in the United States, and the market
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`is more vertically integrated, meaning that single companies control all phases of production.
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`(Id. ¶¶ 95–97.)
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`5 16 CV 8637 (N.D. Ill.).
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`Plaintiffs allege that these market dynamics make it particularly likely that information
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`exchanges of the type facilitated through Agri Stats will have negative effects on competition in
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`the market. (Id. ¶ 99.) That the market has relatively few sellers6 enhances the deleterious effect
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`of information exchanges. (Id. ¶ 101.)
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`Agri Stats and Turkey Defendants concealed their information exchange from Plaintiffs
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`making it impossible for them to discover, even through reasonable diligence, the Defendants’
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`scheme at an earlier time. (Id. ¶ 118.) Indeed, Agri Stats is an intentionally secretive company.
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`(Id. ¶ 119.) As the President of the company stated, “There’s not a whole lot of people that know
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`a lot about us obviously due to confidentiality that we try to protect. We don’t advertise. We don’t
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`talk about what we do.” (Id.) Plaintiffs were not made aware of the information exchange
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`facilitated by Agri Stats until the filing of the complaint in Broiler Chickens on February 7, 2018.
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`(Id. ¶ 121.) To this day, it remains unknown how many companies receive Agri Stats’s reports.
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`(Id. ¶ 123.)
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`Olean and John Gross bring this action on behalf of themselves and a putative Class that,
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`subject to certain exclusions, consists of: “All persons and entities who directly purchased turkey
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`from Defendants or co-conspirators7 for personal use in the United States during the Class Period.”
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`(Id. ¶ 131.)
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`LEGAL STANDARD
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`A motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure
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`12(b)(6) challenges the sufficiency of the complaint. Berger v. National Collegiate Athletic
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`Association, 843 F.3d 285, 289–90 (7th Cir. 2016). When considering a motion to dismiss under
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`6 Collectively, the nine Turkey Defendants control eighty percent of the turkey production and processing market.
`(Id. ¶ 102.)
`7 Co-conspirators are Circle S-Ranch, Prestage Farms, and West Liberty Foods. (Id. ¶¶ 64–66.)
`7
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`Rule 12(b)(6), the Court must construe the complaint “in a light most favorable to the nonmoving
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`party, accept well-pleaded facts as true, and draw all inferences in the non-moving party’s favor.”
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`Bell v. City of Chicago, 835 F.3d 736, 738 (7th Cir. 2016). The complaint must contain a “short
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`and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P.
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`8(a)(2). This statement must give the defendant fair notice of what the claim is and the grounds
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`upon which it rests. Erickson v. Pardus, 551 U.S. 89, 93 (2007). A party need not plead “detailed
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`factual allegations,” but “labels and conclusions” or a “formulaic recitation of the elements of a
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`cause of action will not do.” Bell Atlantic Corp. v. Twonbly, 550 U.S. 544, 555 (2007). A
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`complaint must contain sufficient factual matter that when “accepted as true . . . ‘state a claim to
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`relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell
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`Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
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`DISCUSSION
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`To state a claim for a violation of § 1 of the Sherman Act, Plaintiffs must allege “‘(1) a
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`contract, combination, or conspiracy; (2) a resultant unreasonable restraint of trade in [a] relevant
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`market; and (3) an accompanying injury.’” Agnew v. Nat’l Collegiate Athletic Ass’n, 683 F.3d 328,
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`335 (7th Cir. 2012) (quoting Denny’s Marina, Inc. v. Renfro Prods., Inc., 8 F.3d 1217, 1220 (7th
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`Cir. 1993)). Courts evaluate § 1 information-exchange claims under the “rule of reason.” See
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`United States v. U.S. Gypsum Co., 438 U.S. 422, 441 n.16 (1978) (“The exchange of price data
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`and other information among competitors does not invariably have anticompetitive effects; indeed
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`such practices can in certain circumstances increase economic efficiency and render markets more,
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`rather than less, competitive. For this reason, we have held that such exchanges of information do
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`not constitute a per se violation of the Sherman Act.”); United States v. Citizens & S. Nat’l Bank,
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`422 U.S. 86, 113 (1975) (explaining that “the dissemination of price information is not itself a per
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`se violation of the Sherman Act”); Kenneth Khoo & Jerold Soh, The Inefficiency of Quasi-Per Se
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`Rules: Regulating Information Exchange in EU and U.S. Antitrust Law, 57 Am. Bus. L.J. 45, 47
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`(2020) (“[U]nder the U.S. antitrust regime, most forms of information exchange are subject to a
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`“rule of reason” analysis that places the burden of establishing anticompetitive effects on the party
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`alleging illegality.”). Stating a rule of reason claim requires alleging that Defendants entered into
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`an agreement that causes anti-competitive effects and that those anti-competitive effects outweigh
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`any pro-competitive benefits. Agnew, 683 F.3d at 335. The rule of reason also requires Plaintiffs
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`to plead that the exchange had an anti-competitive effect on a given market in a given geographical
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`area. Reifert v. S. Cent. Wis. MLS Corp., 450 F.3d 312, 321 (7th Cir. 2006).
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`All Defendants, with the exception of Kraft, together filed a Joint Motion to Dismiss for
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`Failure to State a Claim. Kraft filed its own Motion to Dismiss, which no other defendants joined.
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`Farbest and Cooper, both of which participated in the Joint Motion, filed supplemental Motions to
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`Dismiss, alleging that the allegations specific to them are insufficient to state claims against them.
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`The Court addresses each of these Motions in turn.
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`I.
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`Joint Motion to Dismiss
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`The Joint Motion to Dismiss (Dkt. 144) seeks dismissal of the Complaint on the grounds
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`that Plaintiff fails: (1) to allege any agreement among the Turkey Defendants to exchange
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`information, (2) to allege any anti-competitive effects stemming from the alleged information
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`exchange, and (3) to allege a properly defined market.
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`A.
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`Allegations of an Agreement
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`Plaintiffs allege that the Turkey Defendants agreed to “regularly exchange detailed, timely,
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`competitively sensitive and non-public information about their operations” via Agri Stats.
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`(Dkt. 1 ¶ 147.) Each Turkey Defendant contributed data to Agri Stats with the “understanding that
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`it would be reciprocated” by other Turkey Defendants. (Id. ¶ 156.) Turkey Defendants knew of
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`each other’s participation in the information exchange because Agri Stats listed its participants in
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`the report. (Id. ¶ 81.) Moreover, although Agri Stats ostensibly anonymized the data in the reports,
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`the data was so detailed that Turkey Defendants were able to infer which data corresponded to
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`which Defendant. (Id. ¶ 18.)
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`These allegations are sufficient to allege a hub-and-spoke conspiracy among the Turkey
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`Defendants and Agri Stats. Defendants suggest that the alleged conspiracy is at best a “rimless”8
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`conspiracy (i.e., a conspiracy wherein the spokes do not agree with one another to participate in
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`the conspiracy), but Plaintiffs allege enough to suggest agreements both among the spokes (Turkey
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`Defendants) and between the spokes and the hub (Agri Stats). Given that Turkey Defendants
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`allegedly knew that each of them were participating in the information exchange and could
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`decipher the data pertaining to each producer—and because executives of the Turkey Defendants
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`allegedly had regular opportunities to meet and discuss production targets at various trade
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`association meetings—Plaintiffs have alleged enough to plausibly suggest the existence of a hub-
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`and-spoke conspiracy among the Turkey Defendants to exchange competitively sensitive
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`information with one another through Agri Stats.
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`B.
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`Allegations of Anti-Competitive Effects
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`Plaintiffs adequately allege an anti-competitive effect—namely, price increases and slowed
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`production—resulting from the information exchanged through Agri Stats. The chart in paragraph
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`115 of the Complaint, which shows that prices and production began diverging in a dramatic
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`fashion around or before the beginning of the Class Period, supports a plausible inference that the
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`8 Even if the Court found that this was a rimless conspiracy, the authority Defendants cite for the proposition that
`rimless conspiracies are not cognizable is not so clear. See Howard Hess Dental Labs, Inc. v. Dentsply Int’l, Inc., 602
`F.3d 237, 256 (3d Cir. 2010) (specifically declining to decide whether an allegation of a rimless conspiracy is “legally
`viable or even relevant” to the case).
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`information exchange occurring simultaneously caused industry-wide shifts in output and pricing.
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`This divergence allegedly occurred in a market with characteristics that make it particularly likely
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`that an information exchange will have anticompetitive effects. See United States v. Container
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`Corp. of Am., 393 U.S. 333, 337 (1969) (explaining that information exchanges in markets that
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`have (1) fungible products, for which competition is price-based, (2) inelastic demand, and (3)
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`relatively few sellers are especially likely to cause anti-competitive effects). Indeed, Plaintiffs
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`adequately allege that each of the three relevant characteristics exist in the turkey market.
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`Specifically, Plaintiffs allege that turkey products are fungible, such that competition among
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`sellers is primarily price-based. (Dkt. 1 ¶ 103.) Of course, Agri Stats reports are valuable to Turkey
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`Defendants specifically because their products are so fungible. (Id. ¶ 104.) Plaintiffs also allege
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`that demand for turkey is relatively inelastic; Americans gobble up turkey on Thanksgiving
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`regardless of price-per-pound fluctuations. (Id. ¶ 106.) Finally, Plaintiffs allege that the turkey
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`market is relatively concentrated among a small group of sellers; the nine Turkey Defendants
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`control eighty percent of the market. (Id. ¶ 102.) In Container Corp. of Am., the Supreme Court
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`deemed a market in which eighteen sellers controlled ninety percent of the market to be sufficiently
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`concentrated to give rise to an inference that the exchange of information will have anti-
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`competitive effects. 393 U.S. at 337, 342. The turkey industry is sufficiently concentrated to
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`suggest a plausible causal connection between the information exchange and the divergence
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`between prices and production during the Class Period. Defendants do not allege any
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`procompetitive benefit of the information exchange that would supersede these alleged anti-
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`competitive effects.
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`Defendants point to a variety of explanations for why Plaintiffs’ allegations do not actually
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`suggest anticompetitive effects. For example, they posit that the divergence between prices and
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`production shown in the chart attached to paragraph 115 of the Complaint can be explained by an
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`avian influenza outbreak. Whether the alleged divergence was actually caused by some exogenous
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`phenomenon or was instead the result of the information exchange is a question of fact that is not
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`appropriate for the Court to resolve at this juncture. The same goes for Defendants’ suggestion that
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`Plaintiffs improperly characterize changes in production by considering heads slaughtered rather
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`than total pounds produced. The only relevant consideration at this juncture is whether Plaintiffs
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`allege a plausible causal relationship between the information exchange and the alleged changes
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`in pricing and output. Plaintiffs have met that burden.
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`C.
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`Allegations of Market Definition
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`The relevant market for a Sherman Act claim is the area of effective competition, which is
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`the arena within which substantial substitution in consumption and production occurs. Ohio v. Am.
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`Express Co., 138 S. Ct. 2274, 2285 (2018). Plaintiffs allege that the relevant market for purposes
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`of this case is the market for turkey meat for consumption in the United States. Of course, the
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`Court does not “blindly accept a market definition proposed in a complaint” and an antitrust claim
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`lacks merit when a plaintiff “fails even to attempt a plausible explanation as to why a market
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`should be limited in a particular way.” Int'l Equip. Trading, Ltd. v. AB SCIEX LLC, 13 CV 1129,
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`2013 WL 4599903, at *3 (N.D. Ill. Aug. 29, 2013). Courts are generally hesitant, however, to
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`dismiss Sherman Act claims for failure to allege a relevant product “[b]ecause market definition
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`is a deeply fact-intensive inquiry.” Todd v. Exxon Corp., 275 F.3d 191, 199–200 (2d Cir. 2001).
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`According to the Complaint, “[t]here is a single market for turkey meat consumption.
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`Prices for turkey sold in the United States are quoted generally in disassembled parts, with
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`adjustments for transportation, product form . . ., and packaging at the time of sale.” (Dkt. 1 ¶ 90.)
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`Defendants quarrel with this definition, suggesting that it is under-inclusive because it excludes
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`other proteins and over-inclusive because it does not differentiate between different turkey
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`products like turkey bacon and whole turkeys. Again, this is an attempt to have the Court resolve
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`a factual dispute, which would be improper at this juncture. Plaintiffs allege that the market for
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`turkey is a single market for disassembled parts, that this market is separate and apart from markets
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`for other proteins, and that although turkey products appear in different forms on store shelves,
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`they are generally originally sold in a market for disassembled parts. (Id. ¶ 90.) Plaintiffs allege
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`that there is a single market for disassembled turkey products. Whether that is the reality of the
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`market is not a question for the Court to decide at this stage of the litigation. Plaintiff alleges the
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`existence of a single turkey market, and that allegation is plausible.
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`D.
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`Statute of Limitations
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`Sherman Act claims are subject to a four-year statute of limitations. 15 U.S.C. § 15b.
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`“While a statute of limitations defense is not normally part of a motion to dismiss under Federal
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`Rule of Civil Procedure 12(b)(6), when the allegations of the complaint reveal that relief is barred
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`by the applicable statute of limitations, the complaint is subject to dismissal for failure to state a
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`claim.” Logan v. Wilkins, 644 F.3d 577, 582 (7th Cir. 2011). The Court may only dismiss a claim
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`on statute of limitations grounds at the motion to dismiss stage where it is clear from the face of
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`the complaint that it is “hopelessly time-barred.” Cancer Found, Inc. v. Cerberus Capital Mgmt.,
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`LP, 559 F.3d 671, 674 (7th Cir. 2009). The alleged anti-competitive conspiracy here took place
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`between January 1, 2010 and January 1, 2017. (Dkt. 1 at 4.) Plaintiffs filed this action on December
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`19, 2019. Thus, were the Court to apply the statute of limitations, the Court would limit the Class
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`Period to December 19, 2015 through January 1, 2017.
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`Plaintiffs suggest two reasons why the statute of limitations should not preclude any claims
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`at this stage: 1) the anti-competitive conduct alleged between December 19, 2015 and January 1,
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`13
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`Case: 1:19-cv-08318 Document #: 173 Filed: 10/19/20 Page 14 of 18 PageID #:1519
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`2017 is part of a continuing conspiracy dating back to 2010, and 2) the Court should toll the statute
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`of limitations because Plaintiffs did not and could not have known through reasonable diligence
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`about Defendants’ anti-competitive conduct at an earlier juncture. Plaintiff’s continuing
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`conspiracy rationale is flawed. “[C]ommission of a separate new overt act generally does not
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`permit the plaintiff to recover for the injury caused by old overt acts outside the limitations period.”
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`Klehr v. A.O. Smith Corp., 521 U.S. 179, 189 (1997). Specifically in the antitrust context, plaintiffs
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`cannot use “independent, new predicate act[s] as a bootstrap to recover for injuries caused by other
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`earlier predicate acts the took place outside the limitations period.” Id. at 190. Plaintiffs are
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`potentially entitled, however, to have the Court toll the statute of limitations. To be entitled to
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`tolling, Plaintiffs must demonstrate that Defendants’ engaged in fraudulent concealment, which
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`“‘is satisfied only if the plaintiff shows that he neither knew nor, in the exercise of due diligence,
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`could reasonably have known of the offense.’” Id. at 194 (quoting 2 P. Areeda & H. Hovenkamp,
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`Antitrust Law ¶ 338, p. 152 (rev. ed.1995)). The Complaint is full of allegations that suggest the
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`secretive nature of Agri Stats, and the Complaint explains that Agri Stats only makes its reports
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`available to industry participants who contribute their own data. (Dkt. 1 ¶¶ 2, 10, 29, 118, 119.)
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`These allegations suffice to make it at least possible that Plaintiffs could not, through reasonable
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`diligence, have known sooner about the alleged information exchange. Accordingly, Defendants
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`have not met their high burden at this stage to dismiss claims on statute of limitations grounds.
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`E.
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`Per Se & Rule of Reason Allegations
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`As detailed above, courts evaluate claims of unlawful information exchanges under the rule
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`of reason. Throughout most of the Complaint, plaintiffs acknowledge this (see Dkt. 1 ¶ 10) and
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`allege facts that support that theory. Then, in a conclusory paragraph, Plaintiffs state that “[t]he
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`alleged contract, combination, or conspiracy is also a per se violation of the federal antirust laws.”
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`14
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`Case: 1:19-cv-08318 Document #: 173 Filed: 10/19/20 Page 15 of 18 PageID #:1520
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`(Id. ¶ 163.) This is not a plausible allegation; courts evaluate information exchange claims under
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`the rule of reason, so the per se allegation is dismissed without prejudice.
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`II.
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`Kraft’s Motion to Dismiss
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`Kraft filed an independent Motion to Dismiss, seeking dismissal on the basis that Kraft is
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`not a turkey producer and as such cannot be a member of the alleged conspiracy. (Dkt. 146.)
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`Indeed, Kraft explains that it is a turkey purchaser, rather than a producer, such that supply cuts
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`and price increases would only hurt Kraft’s bottom line. Plaintiffs do not dispute that Kraft does
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`not raise its own turkeys, but this is not a fatal admission. The alleged relevant market is the turkey
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`market as a whole, which includes processed turkey products, not just live, whole turkeys. Kraft
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`admittedly purchases turkey from growers and then sells processed turkey products. According to
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`the Complaint, the information exchanged through Agri Stats reports contains prices for various
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`turkey products. (Dkt. 1 ¶ 14.) By alleging that Kraft participated in the exchange of information
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`related to processed turkey products, Plaintiffs allege plausible anti-competitive acts on Kraft’s
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`part. Indeed, it is possible that different defendants used Agri Stats’s report to further different
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`goals, and that each Defendant’s use of the reports caused anti-competitive effects with respect to
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`the particular turkey products that each Defendant sells.
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`Notwithstanding the plausibility of Plaintiffs’ market allegations, Plaintiffs still fail to state
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`a claim against Kraft because the only price and cost data alleged are prices and costs associated
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`with whole turkeys. For example, in paragraph 108 of the Complaint, Plaintiffs chart the data on
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`the total number of heads slaughters. In paragraph 111, Plaintiffs chart the increases in prices per
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`pound for hens over the Class Period. Likewise