Case: 1:20-cv-02295 Document #: 171 Filed: 04/21/21 Page 1 of 6 PageID #:3336
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF ILLINOIS
`EASTERN DIVISION
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`OLEAN WHOLESALE GROCERY
`COOPERATIVE, INC., et al.,
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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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`SANDEE’S CATERING,
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` Plaintiff,
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`v.
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`AGRI STATS, INC. et al,
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` Defendants.
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`No. 19 C 8318
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`Judge Virginia M. Kendall
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`No. 20 C 2295
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`Judge Virginia M. Kendall
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`MEMORANDUM OPINION AND ORDER
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`In two decisions issued on October 19 and October 26, 2020, this Court largely denied the
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`Joint Defendants’ Motions to Dismiss the Complaints in Olean Wholesale Grocery Cooperative,
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`Inc., et al. v. Agri Stats, Inc., et al., 19-cv-08318 (see Dkt. 173) and Sandee’s Catering v. Agri
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`Stats, Inc., et al., 20-cv-2295 (see Dkt. 88). The Court granted Defendants’ Kraft Heinz Foods
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`Company and Kraft Foods Groups Brands, LLC (collectively, “Kraft”) Motion to Dismiss because
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`Plaintiffs failed to allege that the information exchange had any anti-competitive impact on the
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`output or prices of Kraft’s product. (See Olean, Dkt. 173 at 15–16; see Sandee’s, Dkt. 88 at 27).1
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`1 The Tyson Defendants have submitted identical Motions for Judgment on the Pleadings under the separate dockets
`of Olean and Sandee’s. Indeed, as the Court previously discussed, the Complaints are essentially the same in Olean
`and Sandee’s, except Olean was brought by direct purchaser plaintiffs and Sandee’s was brought by indirect
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`Case: 1:20-cv-02295 Document #: 171 Filed: 04/21/21 Page 2 of 6 PageID #:3337
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`Defendants the Hillshire Brands Company, Tyson Foods, Inc., Tyson Fresh Meats, Inc., Tyson
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`Prepared Foods, Inc (“the Tyson Defendants”)2 have now moved for judgment on the pleadings,
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`arguing the reasoning that guided the Court in dismissing the Kraft Defendants should lead to their
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`dismissal from the case. For the reasons that follow, the Tyson Defendants’ Motions for Judgment
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`on the Pleadings are denied. (Olean at Dkt. 218; Sandee’s at Dkt. 134).
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`LEGAL STANDARD
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` A motion for judgment on the pleadings under Rule 12(c) of the Federal Rules of Civil
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`Procedure is governed by the same standards as a motion to dismiss for failure to state a claim
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`under Rule 12(b)(6). Adams v. City of Indianapolis, 742 F.3d 720, 727–28 (7th Cir. 2014). The
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`only difference between a motion for judgment on the pleadings and a motion to dismiss is timing;
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`the standard is the same. Federated Mutual Insurance Co. v. Coyle Mechanical Supply Inc., 983
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`F. 3d 307, 313 (7th Cir. 2020). “When a plaintiff moves for judgment on the pleadings, the motion
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`should not be granted unless it appears beyond doubt that the nonmovant cannot prove facts
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`sufficient to support its position, and that the plaintiff is entitled to relief.” Scottsdale Ins. Co. v.
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`Columbia Ins. Grp., Inc., 972 F.3d 915, 919 (7th Cir. 2020). In order to succeed, “the moving
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`party must demonstrate that there are no material issues of fact to be resolved.” Coyle Mechanical
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`Supply Inc., 983 F.3d at 313 (citing N. Ind. Gun & Outdoor Shows, Inc. v. City of S. Bend, 163
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`F.3d 449, 452 (7th Cir. 1998)). As with a motion to dismiss, the Court must determine whether
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`the complaint states a claim to relief that is plausible on its face, drawing all reasonable inferences
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`in the plaintiff’s favor. Gill v. City of Milwaukee, 850 F.3d 335, 339 (7th Cir. 2017) (citations
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`omitted).
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`purchaser plaintiffs. The Court will reference cites to the Olean, 19-cv-08318 docket as “Olean” and the Sandee’s,
`20-cv-2295 docket as “Sandee’s” and will provide the relevant docket number.
`2 As explained by Plaintiffs in their Complaint, The Hillshire Brands Company (Hillshire Brands) operates as a
`subsidiary of Tyson Foods that sells turkey products. Olean, Dkt. 1 at ¶ 62, Sandee’s, Dkt. 1 ¶ 61.
`2
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`DISCUSSION
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`The alleged facts in this case have already been discussed at length in this Court’s earlier
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`Memorandum Opinions denying in part the Defendants’ Motion to Dismiss. At issue in the instant
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`Motions is the Court’s reasoning in dismissing the Kraft Defendants, which the Court discussed in
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`the Olean Memorandum Opinion. (Dkt. 173).3 The Court dismissed the Kraft Defendants
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`because, despite the plausibility of Plaintiffs’ market allegations, Kraft was a turkey purchaser and
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`did not operate as a turkey producer and the only price and cost data alleged are prices and costs
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`associated with whole turkey. (Id. at 15–16). The Court stated, “Plaintiffs have alleged an
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`information exchange and a relevant market, but they have failed to allege that the information
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`exchange had any anti-competitive impact on the output or prices of Kraft’s products.” (Id. at 16).
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`The Tyson Defendants seek to apply the Court’s reasoning to its Motion for Judgment on
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`the Pleadings, but the allegations against the Tyson Defendants and the Kraft Defendants are
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`distinguishable. For example, Plaintiffs pled that Tyson Foods slaughters and sells turkey
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`products. (Olean, Dkt. 1 at ¶ 59, Sandee’s, Dkt. 1 ¶ 58). Kraft was dismissed because Kraft was
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`only alleged to be a turkey purchaser, not a turkey producer, and there were no price allegations
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`relating to turkey purchasers. (Dkt. 173 at 15). Here, however, Plaintiffs have pled that Tyson
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`Foods slaughters turkeys, implying they are in the business of producing turkeys. On this
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`allegation alone the Court would deny the Tyson Defendants’ Motion because such an activity
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`would be supported by allegations in the Complaint that were missing from the allegations
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`pertaining to Kraft. The Court explained in its decision dismissing Kraft that “[f]or example, in
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`paragraph 108 of the Complaint, Plaintiffs chart the data on the total number of heads slaughters.
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`In paragraph 111, Plaintiffs chart the increases in prices per pound for hens over the Class Period.
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`3 The Court incorporated the reasoning as to the Kraft Defendants from the Olean decision in its Sandee’s decision.
`See Sandee’s, Dkt. 88 at 27.
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`3
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`Likewise, Plaintiffs’ regression model in paragraph 116 only charts the relationship between the
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`cost of feed and the cost of hens. None of this data says anything about the portion of the turkey
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`market in which Kraft competes.” (Dkt. 173 at 15). As Plaintiffs allege here that Tyson slaughters
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`turkey and is a turkey producer, this data supports a part of the turkey market in which the Tyson
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`Defendants compete.
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`The Tyson Defendants take the Court’s reasoning to mean that since Kraft did not sell
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`whole turkeys, it was subject to dismissal. The Tyson Defendants insist that the Court’s statement
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`that “the only price and cost data alleged are prices and costs associated with whole turkeys,”
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`means that Kraft was dismissed because there were no allegations linking Kraft to the price of
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`whole turkeys. (Olean, Dkt. 173 at 15). But to believe the Court held solely that ignores the rest
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`of the Court’s reasoning. The Court stated that “[t]he alleged relevant market is the turkey market
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`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.” (Id.). Kraft
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`argued in its motion to dismiss that in addition to the weak allegations contained in the Complaints,
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`Kraft was solely a purchaser of turkey. Kraft argued that “conspicuously missing from Plaintiffs’
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`Complaint is any allegation that Kraft Heinz raised turkeys or reduced the supply of turkeys.”
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`(Olean, Dkt. 147 at 3; Sandee’s, Dkt. 37 at 3). The Tyson Defendants do not claim that they are
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`merely turkey purchasers as Kraft argued.
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`Finally, both the allegations relating to the Tyson Defendants and the arguments made in
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`their respective motions distinguish Tyson from Kraft. The Plaintiffs’ Complaints contain specific
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`allegations connecting the Tyson Defendants to the antitrust harms alleged here. The Complaints
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`allege, for example, that Tyson participated in Agri Stats’ reports on Turkey (Olean, Dkt. 1 ¶ 9;
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`Sandee’s, Dkt. 1 ¶ 9); that Tyson participated and served as officers in the National Turkey
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`4
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`Case: 1:20-cv-02295 Document #: 171 Filed: 04/21/21 Page 5 of 6 PageID #:3340
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`Federation, (Olean, Dkt. 1 ¶ 126; Sandee’s, Dkt. 1 ¶ 125); that Tyson has representation on the
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`Board of Directors of the U.S. Poultry & Egg Association (U.S. Poultry), which describes itself as
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`the world’s largest and most active poultry organization whose members include producers and
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`processors of broilers, turkeys, ducks, eggs, and breeding stock, (Olean, Dkt. 1 ¶ 129; Sandee’s,
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`Dkt. 1 ¶ 128); and that Tyson has board representation on the North American Meat Institute
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`(NAMI), which represents companies that process 95% of red meat and 70% of turkey products
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`in the United States and their suppliers throughout the country, (Olean, Dkt. 1¶ 130; Sandee’s,
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`Dkt. 1 ¶ 129). The Complaints contain significantly less allegations pertaining to Kraft and the
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`majority of the allegations pertained to background information on Kraft, such as where its
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`subsidiaries are headquartered. (See Olean, Dkt. 1 at ¶¶ 1, 9, 46, 50–52; Sandee’s, Dkt. 1 at ¶¶1,
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`9, 35, 49–51). As discussed by Kraft in its Motions to Dismiss:
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`Only seven of the Complaint’s 243 paragraphs refer to Kraft Heinz…Of
`these, the only substantive allegations against Kraft Heinz are that it
`“sold turkey” products and that, Louis Rich, a legacy brand of deli meat,
`somehow subscribed in some way to Agri Stats at one point. These
`allegations are wholly inadequate to raise an inference that Kraft Heinz
`participated in the alleged conspiracy to “restrain the supply of turkey.”
`Plaintiff neither alleges that Kraft Heinz reduced the supply of turkeys
`grown nor explains how Kraft Heinz—which does not raise turkeys—
`could even cut the supply of turkeys in the first instance.”
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`(Olean, Dkt. 147 at 8; Sandee’s, Dkt. 37 at 5) (internal citations omitted). Plaintiffs allegations as
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`to the Tyson Defendants are much more robust than the allegations as to the Kraft Defendants.
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` In order to succeed on a motion for judgment on the pleadings, “the moving party must
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`demonstrate that there are no material issues of fact to be resolved.” Coyle Mechanical Supply
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`Inc., 983 F.3d at 313. Here, however, Plaintiffs plead that the Tyson Defendants slaughter and
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`produce turkey, that they participated in the Agri Stats information exchange, and that they had
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`opportunities to collude. Antitrust plaintiffs must “allege that each individual defendant joined the
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`Case: 1:20-cv-02295 Document #: 171 Filed: 04/21/21 Page 6 of 6 PageID #:3341
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`conspiracy and played some role in it because, at the heart of an antitrust conspiracy is an
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`agreement and a conscious decision by each defendant to join it.” United States Bd. of Oral
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`Implantology v. Am. Bd. of Dental Specialties, 390 F. Supp. 3d 892, 904–05 (N.D. Ill. 2019).
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`Plaintiffs have plausibly alleged that the Tyson Defendants participated in the alleged antitrust
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`scheme. Therefore, judgment on the pleadings for the Tyson Defendants would be inappropriate.
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`CONCLUSION
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`For the foregoing reasons, the Court denies the Tyson Defendants’ Motions for Judgment
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`on the Pleadings. (Olean, Dkt. 218; Sandee’s, Dkt. 134)
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`Date: April 21, 2021
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`____________________________________
`Virginia M. Kendall
`United States District Judge
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`6
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