Case: 1:21-cv-05883 Document #: 1 Filed: 11/03/21 Page 1 of 60 PageID #:1
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF ILLINOIS
`EASTERN DIVISION
`
`HOWARD B. SAMUELS, solely as
`Chapter 7 Trustee of the estate of
`CENTRAL GROCERS, INC.
`
`
`Plaintiff,
`
`
`
`
`AGRI STATS, INC.; CLEMENS FOOD
`GROUP, LLC; CLEMENS FAMILY
`CORPORATION; HORMEL FOODS
`CORPORATION; HORMEL FOODS
`LLC; JBS USA FOOD COMPANY;
`SEABOARD CORPORATION;
`SEABOARD FOODS LLC; SMITHFIELD
`FOODS, INC.; TRIUMPH FOODS, LLC;
`TYSON FOODS, INC.; TYSON
`PREPARED FOODS, INC.; and TYSON
`FRESH MEATS, INC.,
`
`
`
`
`v.
`
`Defendants.
`
`Civil Action No.: 21-cv-05883
`
`
`
`
`COMPLAINT
`
`Jury Trial Demanded
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`I.
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`II.
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`III.
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`Case: 1:21-cv-05883 Document #: 1 Filed: 11/03/21 Page 2 of 60 PageID #:2
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`TABLE OF CONTENTS
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`Page(s)
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`NATURE OF ACTION ......................................................................................................... 4
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`JURISDICTION AND VENUE ............................................................................................ 6
`
`PARTIES ............................................................................................................................... 7
`
`A.
`
`B.
`
`Plaintiff ...................................................................................................................... 7
`
`Defendants ................................................................................................................. 8
`
`a.
`
`b.
`
`c.
`
`d.
`
`e.
`
`f.
`
`g.
`
`h.
`
`i.
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`Agri Stats .................................................................................................... 8
`
`Clemens ......................................................................................................... 8
`
`Hormel ........................................................................................................... 9
`
`JBS ............................................................................................................ 10
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`Seaboard ...................................................................................................... 10
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`Smithfield .................................................................................................... 11
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`Triumph ....................................................................................................... 11
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`Tyson ........................................................................................................... 12
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`Co-Conspirators ........................................................................................... 13
`
`IV.
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`FACTUAL ALLEGATIONS .............................................................................................. 13
`
`A.
`
`B.
`
`
`C.
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`D.
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`E.
`
`F.
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`Agri Stats’ Detailed Reports Enable the Producer Defendants to
`Accurately Assess and Monitor their Competitors’ Production Levels ................. 17
`
`The Producer Defendants’ Control Over the Production and Supply of
`Pork in the United States....................................................................................... 22
`
`Vertically-Integrated Companies and the Control of Hog-Raising through
`Contract Growing .................................................................................................... 22
`
`A Highly-Concentrated Industry........................................................................... 26
`
`Barriers to Entry .................................................................................................... 27
`
`Inelastic Demand and Standardized, Commodity Products Where Competition
` is Principally on Price .......................................................................................... 28
`2
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`Case: 1:21-cv-05883 Document #: 1 Filed: 11/03/21 Page 3 of 60 PageID #:3
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`G.
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`Opportunities to Collude at Industry Conferences and Trade Association
`Meetings ................................................................................................................ 29
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`V.
`
`THE PRODUCER DEFENDANTS’ CURTAILMENT OF PORK
`PRODUCTION .................................................................................................................... 35
`
`a.
`
`b.
`
`c.
`
`d.
`
`e.
`
`f.
`
`g.
`
`h.
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`Smithfield .................................................................................................... 37
`
`Tyson ........................................................................................................... 38
`
`JBS ............................................................................................................ 38
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`Hormel ......................................................................................................... 38
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`Seaboard ...................................................................................................... 39
`
`Triumph ....................................................................................................... 39
`
`Clemens ....................................................................................................... 39
`
`Co-Conspirator Indiana Packers ................................................................. 40
`
`VI.
`
`ABNORMAL PRICING AND THE EFFECT ON PLAINTIFF IN THE FORM
`OF HIGHER PRICES.......................................................................................................... 48
`
`VII. OVERCHARGES FROM THE CARTEL REFLECTED IN HIGHER PORK
`PRICES PLAINTIFF PAID ................................................................................................ 49
`
`VIII. DOJ’S CRIMINAL ANTITRUST PROSECUTION IN BROILER CHICKENS
`SUPPORTS AN INFERENCE OF THE EXISTENCE OF A SIMILAR CONSPIRACY
`IN PORK………………………………………………………………………………..50
`
`IX.
`
`TOLLING OF THE STATUTE OF LIMITATIONS ......................................................... 52
`
`A.
`
`B.
`
`American Pipe Tolling…………………………………………………………...52
`
`Fraudulent Concealment…………………………………………………………52
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`X.
`
`XI.
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`ANTITRUST INJURY ........................................................................................................ 56
`
`VIOLATION OF SECTION 1 OF THE SHERMAN ACT ............................................... 57
`
`XII. REQUEST FOR RELIEF .................................................................................................... 58
`
`XIII.
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`JURY TRIAL DEMANDED ............................................................................................ 59
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`3
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`Plaintiff Howard B. Samuels, solely as Chapter 7 Trustee of the estate of Central Grocers,
`
`Inc., (“Plaintiff”) by and through its undersigned counsel, files this Complaint against the
`
`Defendants identified below, for their illegal conspiracy, which increased the prices of pork sold
`
`in the United States beginning at least as early as 2009 and continuing through the present. Plaintiff
`
`brings this action against Defendants for treble damages and for such other damages to the
`
`maximum extent allowed under the antitrust laws of the United States, and demand a trial by jury.
`
`I.
`
`NATURE OF ACTION
`
`1.
`
`The pork producer defendants are the leading suppliers of pork in an industry with
`
`approximately $20 billion in annual commerce in the United States. The United States pork
`
`industry is highly concentrated, with a small number of large companies controlling the supply.
`
`Defendants and their Co-Conspirators collectively control over 80 percent of the wholesale pork
`
`market.
`
`2.
`
`Defendants Agri Stats, Clemens, Hormel, JBS USA, Seaboard, Smithfield,
`
`Triumph, and Tyson entered, along with Co-Conspirator Indiana Packers Corporation, into a
`
`conspiracy from at least 2009 to the present (the “Conspiracy Period”) to fix, raise, maintain, and
`
`1 The defendants, other than Agri Stats, are referred to here collectively
`stabilize the price of pork.
`
`as the “Producer Defendants.”
`
` 
`1 For the purposes of this Complaint, “pork” includes, but is not limited to, a variety of meat products from
`pigs (also referred to in the industry as porcine or swine) purchased fresh, frozen, processed, rendered or non-
`rendered, including but not limited to any and all processed pork products, (e.g., smoked ham, sausage, bacon,
`pepperoni, lunch meats), and other processed products and by-products containing pork. “Pork by-products”
`can include, but is not limited to, offal and individual parts or organs from pigs used in pet foods (e.g., livers,
`kidneys, lungs, hearts, cheeks) and/or rendered products (e.g., meat meals and bone meals). From time to
`time in this complaint, “pork” and “swine” are used interchangeably, particularly when referring to the pork
`or swine industry. See, e.g. DPP Class Memorandum of Points and Authorities in Support of Motion for
`Preliminary Approval of Class Settlement between Direct Purchaser Plaintiff and Defendant JBS at 2, n.2, In
`re: Pork Antitrust Litigation, Case No. 0:18-cv-01776 (D. Minn.).
`4
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`3.
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`One method by which Defendants implemented and executed their conspiracy was
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`by coordinating output and limiting production with the intent and expected result of increasing
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`pork prices in the United States.
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`4.
`
`In furtherance of their conspiracy, the Producer Defendants exchanged detailed,
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`competitively sensitive, and closely guarded non-public information, such as prices, capacity,
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`production, sales volume, and demand, including through their co-conspirator, Defendant Agri Stats.
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`5.
`
`Beginning in at least 2009, Defendant Agri Stats began providing highly sensitive
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`“benchmarking” reports to the Producer Defendants. Legitimate benchmarking allows competitors to
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`compare their profits or performance against that of other companies. Yet Agri Stats’ reports are unlike
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`those of lawful industry reports; rather, Agri Stats gathers detailed financial and production data from
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`each of the Producer Defendants and their Co-Conspirator Indiana Packers, standardizes this
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`information, and produces customized reports and graphs for the conspirators. The type of information
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`available in these reports is not the type of information that competitors would provide each other in a
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`normal, competitive market.
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`6.
`
`On at least a monthly basis, and often far more frequently (e.g., weekly or every other
`
`week), Agri Stats provides the Producer Defendants with current and forward-looking sensitive
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`information (such as profits, costs, prices and slaughter information), and regularly provides the keys to
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`deciphering which data belong to which participant. The effect of this information exchange was to
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`allow the pork producers to monitor each other’s production, and therefore control supply and price in
`
`furtherance of their anticompetitive scheme.
`
`7.
`
`The data exchanged through Agri Stats also bears all the hallmarks of the
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`enforcement and implementation mechanism of a price-fixing scheme. First, the data are current and
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`forward-looking— which courts have consistently held has “the greatest potential for generating
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`anticompetitive effects.” Second, information contained in Agri Stats reports is specific to pork
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`5
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`producers—including information on profits, prices, costs, and production levels—instead of being
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`aggregated as industry averages to avoid transactional specificity and the easy identification of
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`specific producers. Third, none of the Agri Stats information was publicly available. Agri Stats is a
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`subscription service that required the Co-Conspirators to pay millions of dollars over the Conspiracy
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`Period—far in excess of any other pricing and production indices. Agri Stats ensured that its detailed,
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`sensitive business information was available only to the co-conspirators and not to any buyers in the
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`market. Defendants utilize the information exchanges through Agri Stats in furtherance of their
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`conspiracy to fix, raise, stabilize, and maintain artificially inflated prices for pork sold in the United
`
`States.
`
`8.
`
`Defendants’ purposeful restriction of pork supply had the intended effect of
`
`increasing pork prices to Plaintiff. As a result of Defendants’ unlawful conduct, Plaintiff paid
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`artificially inflated prices for pork during the Conspiracy Period. Such prices exceeded the amount
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`Plaintiff would have paid if the price for pork had been determined by a competitive market. Thus,
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`Plaintiff was injured in its businesses or property by Defendants’ unlawful conduct.
`
`II.
`
`
`
`JURISDICTION AND VENUE
`
`9.
`
`This action arises under Section 1 of the Sherman Act, 15 U.S.C. § 1, and Section 4
`
`of the Clayton Act, 15 U.S.C. § 15(a), and seeks to recover treble damages, costs of suit, and
`
`reasonable attorneys’ fees for the injuries sustained by Plaintiff resulting from Defendants’
`
`conspiracy to restrain trade in the pork market. The Court has subject matter jurisdiction under
`
`28 U.S.C. §§ 1331, 1337(a), 1407, and 15 U.S.C. § 15.
`
`10.
`
`Venue is proper in this District under 15 U.S.C. §§ 15(a); 22 and 28 U.S.C. §§
`
`1391(b); (c); and (d) because during the relevant period, Defendants resided, transacted business,
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`were found, or had agents in this District, and a substantial portion of Defendants’ alleged
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`wrongful conduct affecting interstate trade and commerce was carried out in this District.
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`6
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`11.
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`Defendants are amenable to service of process under Fed. R. Civ. P. 4(k)(1)(A)
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`and the Illinois long-arm statute 735 ILCS 5/2-209, because each Defendant has transacted business
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`in this state and because the Illinois long-arm statute extends jurisdiction to the limits of Due
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`Process, and each Defendant has sufficient minimum contacts with the state of Illinois to satisfy Due
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`Process.
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`12.
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`This Court has personal jurisdiction over each Defendant because each Defendant –
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`throughout the U.S. and including in this District and the state of Illinois -- has transacted
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`business, maintained substantial contacts, or committed overt acts in furtherance of its illegal
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`scheme and conspiracy. The alleged scheme and conspiracy have been directed at, and had the
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`intended effect of, causing injury to persons and entities residing in, located in, or doing business
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`throughout the U.S., including in this District and the state of Illinois.
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`
`
`III.
`
`PARTIES
`
`A.
`
`13.
`
`Plaintiff
`
`The Trustee, Howard B. Samuels, acting solely in his capacity as Chapter 7 trustee
`
`for the bankruptcy of the estate of Central Grocers, Inc., brings this action on behalf of Central
`
`Grocers. Central Grocers is a privately owned Illinois Corporation with is principal place of business
`
`at 2600 Haven Avenue, Joliet, Illinois 60453. From 2009 to the present, Central Grocers and its
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`predecessors in interest purchased pork at artificially inflated prices directly from various Defendants
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`and their affiliates and co-conspirators and suffered injury to its business or property as a direct and
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`proximate result of Defendants’ wrongful conduct. Central Grocers brings this action on its own
`
`behalf and on behalf of its respective subsidiaries, affiliates, and other owned or controlled entities
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`and predecessors in interest (hereinafter collectively referred to as “Central Grocers” or “Plaintiff”).
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`7
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`B.
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`Defendants
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`a.
`
`Agri Stats
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`14.
`
`Agri Stats, Inc. is an Indiana corporation located in Fort Wayne, Indiana and was, for
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`a portion of the Conspiracy Period, a subsidiary of Eli Lilly & Co., a publicly-held corporation
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`headquartered in Indianapolis. Agri Stats is now a wholly owned subsidiary of Agri Stats Omega
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`Holding Co. LP, a limited partnership based in Indiana. Agri Stats is a co-conspirator of the
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`Producer Defendants and has knowingly played an important and active role by participating in and
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`a facilitating the Producer Defendants’ collusive scheme detailed in this Complaint. Agri Stats has
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`a unique and deep relationship with the pork industry generally, and specifically with each of the
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`Defendants identified below, all of which are Agri Stats’ primary customers. Defendants Clemens,
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`Hormel, JBS USA, Seaboard, Triumph, Smithfield, and Tyson, and Co-Conspirator Indiana
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`Packers, are all Agri Stats subscribers and report a wide variety of information to Agri Stats, which,
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`according to a 2016 Eli Lilly earnings call, is used by “over 90% of the poultry and pig market”
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`in the United States.
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`15.
`
`All of Agri Stats’ wrongful actions described in this Complaint are part of, and in
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`furtherance of, the unlawful conduct alleged herein, and were authorized, ordered, or engaged in by
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`Agri Stats’ various officers, agents, employers, or other representatives while actively engaged in
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`the management and operation of Agri Stats’ business affairs within the course and scope of their
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`duties and employment, or with Agri Stats’ actual apparent or ostensible authority. Agri Stats
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`used the instrumentalities of interstate commerce to facilitate the conspiracy, and its conduct was
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`within the flow of, was intended to, and did have a substantial effect on the interstate
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`commerce of the U.S., including in this District.
`
`
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`16.
`
`b.
`
`Clemens
`
`Clemens Food Group, LLC is a limited-liability company headquartered in Hatfield,
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`Pennsylvania. During the Conspiracy Period, Clemens Food Group, LLC and/or its predecessors,
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`wholly owned or controlled subsidiaries, or affiliates sold pork in interstate commerce, directly or
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`through its wholly owned or controlled affiliates, to purchasers in the United States, including
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`in this District.
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`17.
`
`The Clemens Family Corporation is a Pennsylvania corporation headquartered in
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`Hatfield, Pennsylvania, and the parent company of Clemens Food Group, LLC. During the
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`Conspiracy Period, The Clemens Family Corporation and/or its predecessors, wholly owned or
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`controlled subsidiaries, or affiliates sold pork in interstate commerce, directly or through its
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`wholly owned or controlled affiliates, to purchasers in the United States, including in this District.
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`18.
`
`The Clemens Food Group, LLC and the Clemens Family Corporation are referred to
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`here collectively as “Clemens.” Clemens reports a wide variety of pork data to Agri Stats,
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`including, without limitation, highly-detailed, confidential information regarding its production
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`and sales of pork.
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`
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`c.
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`Hormel
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`19.
`
`Hormel Foods Corporation is a Delaware corporation headquartered in Austin,
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`Minnesota. During the Conspiracy Period, Hormel Foods Corporation and/or its predecessors,
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`wholly owned or controlled subsidiaries, or affiliates, including but not limited to Hormel Foods,
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`LLC sold pork in interstate commerce, directly or through its wholly owned or controlled
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`affiliates, to purchasers in the United States, including in this District.
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`20.
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`Hormel Foods, LLC is a Minnesota corporation headquartered in Austin,
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`Minnesota. Hormel Foods, LLC is a wholly owned subsidiary of Defendant Hormel Foods
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`Corporation. During the Conspiracy Period, Hormel Foods Corporation and/or its predecessors,
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`wholly owned or controlled subsidiaries, or affiliates sold pork in interstate commerce, directly or
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`through its wholly owned or controlled affiliates, to purchasers in the United States, including in
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`9
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`this District.
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`21.
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`Hormel Foods, LLC and Hormel Foods Corporation are referred to here
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`collectively as “Hormel.” Hormel reports a wide variety of pork data to Agri Stats, including,
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`without limitation, highly-detailed, confidential information regarding its production and sales of
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`pork.
`
`
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`d.
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`JBS
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`22.
`
`JBS USA Food Company is one of the world’s largest beef and pork processing
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`companies and a wholly owned subsidiary of JBS USA Food Company Holdings, which holds a
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`78.5 percent controlling interest in Pilgrim’s Pride Corporation, one of the largest chicken-
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`producing companies in the world w h i c h recently plead guilty to antitrust violations in the
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`broiler chickens market. JBS USA Food Company is a Delaware corporation, headquartered in
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`Greeley, Colorado, and reports a wide variety of pork data to Agri Stats, including, without
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`limitation, highly-detailed, confidential information regarding its production and sales of pork.
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`During the Conspiracy Period, JBS USA Food Company and/or its predecessors, wholly owned
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`or controlled subsidiaries, or affiliates (hereinafter collectively referred to as “JBS USA”) sold pork
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`in interstate commerce, directly or through its wholly owned or controlled affiliates, to purchasers
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`in the United States, including in this District.
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`23.
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`Plaintiff timely opted out and excluded itself from the DPP class settlement with JBS
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`USA, which was preliminarily approved by the Court in In re: Pork Antitrust Litigation, Case No.
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`0:18-cv-01776 (D. Minn.).
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`
`
`e.
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`Seaboard
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`24.
`
`Seaboard Foods LLC is a limited-liability company headquartered in Shawnee
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`Mission, Kansas, and is a wholly owned subsidiary of Seaboard Corporation. During the
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`Conspiracy Period, Seaboard Foods LLC and/or its predecessors, wholly owned or controlled
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`subsidiaries, or affiliates sold pork in interstate commerce, directly or through its wholly owned or
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`controlled affiliates, to purchasers in the United States, including in this District.
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`25.
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`Seaboard Corporation is a Delaware corporation headquartered in Merriam,
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`Kansas, and is the parent company of Seaboard Foods LLC. During the Conspiracy Period,
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`Seaboard Corporation and/or its predecessors, wholly owned or controlled subsidiaries, or affiliates
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`sold pork in interstate commerce, directly or through its wholly owned or controlled affiliates, to
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`purchasers in the United States, including in this District.
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`26.
`
`Seaboard Corporation and Seaboard Foods LLC are referred to here collectively
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`as “Seaboard.” Seaboard reports a wide variety of pork data to Agri Stats, including, without
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`limitation, highly-detailed, confidential information regarding its production and sales of pork.
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`
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`f.
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`Smithfield
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`27.
`
`Smithfield Foods, Inc. is incorporated in the Commonwealth of Virginia, and an
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`indirect wholly owned subsidiary of WH Group Limited, a Chinese company. Smithfield Foods is
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`headquartered in Smithfield, Virginia, and reports a wide variety of pork data to Agri Stats,
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`including, without limitation, highly-detailed, confidential information regarding its production
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`and sales of pork. During the Conspiracy Period, Smithfield Foods, Inc. and/or its predecessors,
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`wholly owned or controlled subsidiaries, or affiliates sold pork in interstate commerce, directly or
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`through its wholly owned or controlled affiliates, to purchasers in the United States, including in
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`this District. Smithfield Foods has entered into an agreement to settle with the DPP class in In re:
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`Pork Antitrust Litigation, Case No. 0:18-cv-01776, ECF 815, (D. Minn.).
`
`g.
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`Triumph
`
`28.
`
`Triumph Foods, LLC is a limited-liability company headquartered in St. Joseph,
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`Missouri, and reports a wide variety of pork data to Agri Stats, including, without limitation,
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`highly-detailed, confidential information regarding its production and sales of pork. During the
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`11
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`Conspiracy Period, Triumph Foods, LLC and/or its predecessors, wholly owned or controlled
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`subsidiaries, or affiliates (hereinafter collectively referred to as “Triumph”) sold pork in interstate
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`commerce, directly or through its wholly owned or controlled affiliates, to purchasers in the United
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`States, including in this District.
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`
`
`h.
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`Tyson
`
`29.
`
`Tyson Foods, Inc. is a publicly traded Delaware corporation headquartered in
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`Springdale, Arkansas. During the Conspiracy Period, Tyson Foods, Inc. and/or its predecessors,
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`wholly owned or controlled subsidiaries, or affiliates sold pork in interstate commerce, directly or
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`through its wholly owned or controlled affiliates, to purchasers in the United States, including in
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`this District.
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`30.
`
`Tyson Prepared Foods, Inc. is a Delaware corporation headquartered in Springdale,
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`Arkansas and is a wholly-owned subsidiary of Tyson Foods, Inc. During the Conspiracy Period,
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`Tyson Prepared Foods, Inc. sold pork in interstate commerce, directly or through its wholly-
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`owned or controlled affiliates, to purchasers in the United States, including in this District.
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`31.
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`Tyson Fresh Meats, Inc. is a Delaware corporation headquartered in Springdale,
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`Arkansas and is a wholly-owned subsidiary of Tyson Foods, Inc. During the Conspiracy Period,
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`Tyson Fresh Meats, Inc. sold pork in interstate commerce, directly or through its wholly-owned or
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`controlled affiliates, to purchasers in the United States, including in this District.
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`32.
`
`Tyson Fresh Meats, Inc., Tyson Prepared Foods, Inc. and Tyson Foods, Inc. are
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`referred to here collectively as “Tyson.” Tyson reports a wide variety of pork data to Agri Stats,
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`including, without limitation, highly-detailed, confidential information regarding its production
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`and sales of pork.
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`
`
`i.
`
`Co-Conspirators
`
`33.
`
`Co-Conspirator
`
`Indiana Packers Corporation
`12
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`is an
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`Indiana corporation
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`headquartered in Delphi, Indiana, and reports a wide variety of pork data to Agri Stats, including,
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`without limitation, highly detailed, confidential information regarding its production and sales of
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`pork. During the Conspiracy Period, Indiana Packers Corporation and/or its predecessors, wholly
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`owned or controlled subsidiaries, or affiliates (hereinafter collectively referred to as “Indiana
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`Packers”) sold pork in interstate commerce, directly or through its wholly owned or controlled
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`affiliates, to purchasers in the United States. Indiana Packers Corporation’s parent companies are
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`Itoham Foods, Inc., Mitsubishi Corporation, and Mitsubishi Corporation (Americas).
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`34.
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`Various other persons, firms, and corporations not named as defendants have
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`performed acts and made statements in furtherance of the conspiracy. Defendants are jointly and
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`severally liable for the acts of their Co-Conspirators whether or not named as defendants in this
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`Complaint. Throughout this Complaint, Indiana Packers and the other persons, firms, and
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`corporations not named as defendants that performed acts and made statements in furtherance of the
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`conspiracy are collectively referred to as “Co-Conspirators.”
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`IV.
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`FACTUAL ALLEGATIONS
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`35.
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`Starting in at least 2009 and continuing to the present, each of Defendants and
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`their Co- conspirators conspired to fix, raise, maintain and stabilize pork prices. To effectuate and
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`ensure the stability of their anticompetitive agreement, e a c h o f the Producer Defendants
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`relied on a unique industry data sharing service provided by Defendant Agri Stats, Inc. Agri
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`Stats provided a means for e a c h o f the Producer Defendants to obtain and monitor critical
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`and competitively sensitive business information regarding each other’s production metrics, thereby
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`serving as a central and critical part of each of the Defendants’ price-fixing scheme, resulting in a
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`stable and successful anticompetitive cartel.
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`36.
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`The Chicago Mercantile Exchange (“CME”), the U.S. Department of Agriculture
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`(“USDA”), and various other entities publish publically available aggregated daily, weekly,
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`monthly, and annual supply and pricing information concerning the U.S. pork industry, including:
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`the CME Lean Hog Index, which reflects prices paid for hogs in the U.S.; the CME Pork Cutout
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`Index, which reflects the prices paid for pork (a “cutout’ is the approximate value of a hog
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`calculated using the prices paid for wholesale cuts of pork); and USDA’s National Daily Hog
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`and Pork Summary. The pricing and production information in those reports and indices is
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`completely anonymous and aggregated (or averaged), and indeed the USDA reports clearly state
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`that certain prices are “not reported due to confidentiality.”
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`37.
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`Only Agri Stats receives from each of the Producer Defendants, and then provides
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`to a l l o f the Producer Defendants, detailed information to accurately determine producer-
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`specific production, costs, and general efficiency. Agri Stats is a company that generates
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`confidential pork industry data considerably more detailed than any similar types of available
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`reports, and the Agri Stats reports include the following data categories:
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`a)
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`b)
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`c)
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`Performance Summary;
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`Feed Mill;
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`Ingredient Purchasing;
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`d) Weaned-Pig Production;
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`e)
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`f)
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`Nursery;
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`Finishing;
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`g) Wean-to-Finish;
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`h) Market Haul; and
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`i)
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`Financial information, including profits and sales.
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`38.
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`Much of the information shared by Agri Stats and the Producer Defendants was
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`unnecessary to achieve any benefits for pork producers. Exchanging individual company data
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`(particularly current data on prices and costs) is not required to achieve major efficiencies. In a
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`competitive market, the participants would closely protect such proprietary information from
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`disclosure as providing it to competitors would be disadvantageous—unless, of course, there is an
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`agreement that the competitors will use the information to the joint benefit of each other as was the
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`situation in the pork industry.
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`39.
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`Agri Stats describes itself as a “benchmarking” service that “allows organizations
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`to develop plans on how to adopt best practice, usually with the aim of increasing some aspect of
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`performance.” But describing Agri Stats as a “benchmarking” service does not accurately reflect its
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`critical role in the pork industry and the fundamental importance Agri Stats has to the
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`Producer Defendants.
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`40.
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`Beginning in 2008, after two decades focusing primarily on the poultry industry,
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`Agri Stats began selling its so-called “benchmarking” services to pork producers, including to
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`each of the Defendants.
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` Pork producers were told by Agri Stats’ Greg Bilbrey that
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`“benchmarking in the swine industry could range from simple production comparisons to elaborate
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`and sophisticated total production and financial comparisons. Each and every commercial swine
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`operation is encouraged to participate in some benchmarking effort.”
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`41.
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`Agri Stats emphasized to pork producers that sharing information through
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`“benchmarking” could help achieve the “ultimate goal [of] increasing profitability— not always
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`increasing the level of production.” Agri Stats told the industry that each pig producer “should be
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`participating in some type of benchmarking. To gain maximum benefit, production, cost, and
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`financial performance should all be part of the benchmarking program. . . . Producer groups could
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`design and operate their own benchmarking effort,” and, most importantly, “[e]ach participant
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`has to commit” to ensure the accuracy and reliability of the data collected and submitted to Agri
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`Stats.
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`42.
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`Agri Stats collects data from e a c h o f the Producer Defendants, audits and
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`verifies the data, and ultimately reports back to the Producer Defendants detailed statistics on
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`nearly every operating metric within the industry. Agri Stats’ survey methodology involves—from
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`and to the Producer Defendants—direct electronic data submissions of financial, production, hog
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`placement, size and weaning age, capacity, cost, and numerous other categories of information by
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`each pork producer on a weekly and monthly basis. At each of the Producer Defendants’ pork
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`facilities, certain employees, typically in the accounting department