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Case 1:19-cv-01550-SAG Document 83 Filed 02/08/21 Page 1 of 14
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF MARYLAND
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`PERDUE FARMS, INC. and PERDUE
`FOODS, LLC,
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`v.
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`NATIONAL UNION FIRE INS. CO. OF
`PITTSBURGH, PA,
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`Plaintiffs,
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`Defendant.
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`Civil Case No. 1:19-cv-01550-SAG
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`MEMORANDUM OPINION
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`Plaintiffs Perdue Farms, Inc. and Perdue Foods, LLC (collectively, “Perdue”) filed this
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`action against Defendant National Union Fire Insurance Company of Pittsburgh, Pa. (“National
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`Union”), asserting breach of contract and seeking declaratory judgment. Perdue filed a Motion for
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`Summary Judgment, ECF 76. National Union opposed Perdue’s Motion and filed its own Cross
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`Motion for Summary Judgment, ECF 80. Both National Union and Perdue filed oppositions to
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`the other’s summary judgment motion. ECF 81, 82. No hearing is necessary. See Loc. R. 105.6
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`(D. Md. 2018). For the reasons that follow, Perdue’s motion will be granted and National Union’s
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`motion will be denied.
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`I.
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`FACTUAL BACKGROUND
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`There is no substantive dispute over the facts at issue, which are summarized in Perdue’s
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`Complaint, ECF 1. Perdue Farms, Inc. and Perdue Foods, LLC, are growers and sellers of chickens
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`and are located in Salisbury, Maryland. In 2016, Perdue obtained an insurance policy from
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`National Union, which contained a sublimit for anti-trust claims of $15,000,000 (the “2016
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`Policy”). Perdue obtained a subsequent policy in 2017 from National Union with the same
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`Case 1:19-cv-01550-SAG Document 83 Filed 02/08/21 Page 2 of 14
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`conditions and coverage (the “2017 Policy”). During the term of the 2016 Policy, Perdue was sued
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`in the United States District Court for the Northern District of Illinois by commercial and consumer
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`purchasers of “broilers” (chickens raised for consumption) for violations of the Sherman Antitrust
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`Act and other state law antitrust claims (the “Purchaser Actions”). Perdue reported the claim to
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`National Union, and National Union agreed to indemnify Perdue under the 2016 Policy.
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`In 2017, various “growers” that raise chickens for Perdue filed a separate set of actions in
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`the United States District Court for the Eastern District of Oklahoma (the “Grower Actions”). The
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`complaint alleged violations of the Sherman Antitrust Act and other antitrust violations. Perdue
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`promptly reported the claim to National Union under the 2017 Policy, since the lawsuit was filed
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`during its effective dates. National Union denied coverage under the 2017 Policy, stating that the
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`facts arose from the same facts as the Purchaser Actions and therefore the claims were related
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`under the 2017 Policy’s “Related Wrongful Act(s)” clause, such that coverage for both claims was
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`limited to the 2016 Policy. Plaintiffs filed this declaratory judgment and breach of contract action
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`in the Circuit Court for Wicomico County, Maryland and Defendant removed this matter to this
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`Court.
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`The key contractual provisions are as follows. The 2017 Policy’s clause regarding
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`“Related Wrongful Act(s)” provides that National Union “shall not be liable” for any claim:
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`. . . . alleging, arising out of, based upon or attributable to the facts alleged, or to
`the same or Related Wrongful Act(s) alleged or contained in any Claim which has
`been reported, or in any circumstances of which notice has been given, under any
`directors and officers liability policy of which this D&O Coverage Section is a
`renewal or replacement of in whole or in part or which it may succeed in time[.]
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`ECF 76-7 at 127. The 2017 Policy defines “Related Wrongful Act(s)” as:
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`Wrongful Act(s) which are the same, related, or continuous, or Wrongful Act(s)
`which arise from a common nucleus of facts. Claims can allege Related Wrongful
`Act(s) regardless of whether such Claims involve the same or different claimants,
`Insureds or legal causes of action.
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`2
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`Case 1:19-cv-01550-SAG Document 83 Filed 02/08/21 Page 3 of 14
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`Id. at 14.
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`II.
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`LEGAL STANDARDS
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`Both Perdue and National Union seek summary judgment under Rule 56(a) of the Federal
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`Rules of Civil Procedure. Summary judgment is appropriate only “if the movant shows that there
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`is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of
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`law.” Fed. R. Civ. P. 56(a). The moving party bears the burden of showing that there is no genuine
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`dispute of material fact. See Casey v. Geek Squad, 823 F. Supp. 2d 334, 348 (D. Md. 2011) (citing
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`Pulliam Inv. Co. v. Cameo Props., 810 F.2d 1282, 1286 (4th Cir. 1987)). If the moving party
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`establishes that there is no evidence to support the non-moving party’s case, the burden then shifts
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`to the non-moving party to proffer specific facts to show a genuine issue exists for trial. Id. The
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`non-moving party must provide enough admissible evidence to “carry the burden of proof in [its]
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`claim at trial.” Id. at 349 (quoting Mitchell v. Data Gen. Corp., 12 F.3d 1310, 1315-16 (4th Cir.
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`1993)). The mere existence of a scintilla of evidence in support of the non-moving party’s position
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`will be insufficient; there must be evidence on which the jury could reasonably find in its favor.
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`Id. at 348 (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251 (1986)). Moreover, a genuine
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`issue of material fact cannot rest on “mere speculation, or building one inference upon another.”
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`Id. at 349 (quoting Miskin v. Baxter Healthcare Corp., 107 F. Supp. 2d 669, 671 (D. Md. 1999)).
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`Additionally, summary judgment shall be warranted if the non-moving party fails to
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`provide evidence that establishes an essential element of the case. Id. at 352. The non-moving
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`party “must produce competent evidence on each element of [its] claim.” Id. at 348-49 (quoting
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`Miskin, 107 F. Supp. 2d at 671). If the non-moving party fails to do so, “there can be no genuine
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`issue as to any material fact,” because the failure to prove an essential element of the case
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`“necessarily renders all other facts immaterial.” Id. at 352 (quoting Celotex Corp. v. Catrett, 477
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`3
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`Case 1:19-cv-01550-SAG Document 83 Filed 02/08/21 Page 4 of 14
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`U.S. 317, 322-23 (1986); Coleman v. United States, 369 F. App'x 459, 461 (4th Cir. 2010)
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`(unpublished)). In ruling on a motion for summary judgment, a court must view all of the facts,
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`including reasonable inferences to be drawn from them, “in the light most favorable to the party
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`opposing the motion.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-88
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`(1986) (quoting United States v. Diebold, Inc., 369 U.S. 654, 655 (1962)).
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`III. ANALYSIS
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`a. Disputes Regarding the Applicable Legal Standards
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`The substance of this dispute centers on only one issue: whether the Grower Actions are
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`related to the earlier Purchaser Actions covered by the 2016 Policy, such that the Grower Actions
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`are also covered under the 2016 Policy and not the 2017 Policy. Central to the resolution of this
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`issue are two points of law on which the parties do not agree. First, the parties disagree about the
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`scope of materials the Court should consider in determining whether the lawsuits stem from
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`Related Wrongful Act(s). Second, the parties disagree as to who bears the burden to demonstrate
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`that the Purchaser and Grower Actions are Related Wrongful Act(s). Both issues must be decided
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`prior to delving into the scope of the relevant contractual provisions.
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`i. The Scope of the Materials Considered
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`Perdue asserts that the Court should only consider the pleadings in the Purchaser and
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`Grower Actions to determine whether the two Actions are based on “Related Wrongful Act(s).”
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`ECF 76-1 at 12-13. National Union, meanwhile, suggests that the Court should take a broader
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`view and consider discovery materials from the two Actions as well. ECF 80-1 at 18-19. The
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`“Related Wrongful Act(s)” provision uses the language of allegations and “Claims”—defining a
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`“Claim” as a “complaint or similar pleading”—suggesting that only the pleadings are to be
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`considered under the plain language of the 2017 Policy. See ECF 76-7 at 10, 127; see also
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`4
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`Case 1:19-cv-01550-SAG Document 83 Filed 02/08/21 Page 5 of 14
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`Northrop Grumman Corp. v. Axis Reinsurance Co., 809 F. App'x 80, 89 (3d Cir. 2020) (rejecting
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`the consideration of “various statements made by the litigants” in the underlying claims to
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`determine relatedness because “those statements [fell] beyond the four corners of the complaints
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`and the policies”). This is the Court’s first opportunity to assess the scope of the provision, and
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`the prior statements and determinations cited by National Union, made in the separate context of
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`discovery, do not alter its interpretation of the provision’s language. See infra note 3. As such,
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`the Court concludes that, per the 2017 Policy’s own plain language, it may only consider the
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`pleadings when determining whether the two Actions are Related Wrongful Act(s).
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`ii. The Burden
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`The parties also disagree as to which party bears the burden of proving relatedness in
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`determining whether the Purchaser and Grower Actions are “Related Wrongful Act(s).” National
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`Union, as the insurer, bears the burden of showing the applicability of policy exclusions. See ACE
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`Am. Ins. Co. v. Ascend One Corp., 570 F. Supp. 2d 789, 798 (D. Md. 2008); see also Trice, Geary
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`& Myers, LLC v. Camico Mut. Ins. Co., 459 F. App’x 266, 274 (4th Cir. 2011) (stating that, in
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`Maryland, “[t]he burden is on the insurer, not the insured, to prove the applicability of an
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`exclusion”). Perdue, meanwhile, bears the burden “of proving every fact essential to [its] right to
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`recover” regarding the scope of the policy’s coverage. See Nat'l Union Fire Ins. Co. of Pittsburgh,
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`PA v. Porter Hayden Co., No. CIV. CCB-03-3408, 2012 WL 734170, at *2 (D. Md. Mar. 6, 2012).
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`The Related Wrongful Act(s) provision is an exclusion because its purpose is to delineate
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`claims that would otherwise be covered by the 2017 policy, but which are not ultimately covered
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`because they relate back to the earlier 2016 policy. ECF 76-7 at 127; see also ACE Am. Ins. Co.,
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`570 F. Supp. 2d at 798 (deeming a similar “Interrelated Wrongful Acts” provision to be an
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`exclusion). National Union suggests however, that, this dispute is instead governed by the
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`5
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`Case 1:19-cv-01550-SAG Document 83 Filed 02/08/21 Page 6 of 14
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`“Related Claims Provision” found in both the 2016 and 2017 Policies, which it says merely defines
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`the scope of coverage and thus places the burden on Perdue. ECF 80-1 at 24-25. The plain
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`language of the Related Claims Provision suggests, however, that it is only implicated when an
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`insured seeks to affirmatively bring a claim under the 2016 Policy by virtue of its being related to
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`earlier claims. See ECF 76-4 at 7. Put differently, the fundamental distinction is that the “Related
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`Wrongful Act(s)” clause is an exclusion mechanism for the insurer to deny coverage under the
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`2017 policy, whereas the Related Claims Provision is a “scope of the coverage” mechanism for
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`the insured to seek coverage under the 2016 policy. See Northrop Grumman Corp. v. Axis
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`Reinsurance Co., 809 F. App’x 80, 86 (3d Cir. 2020) (“The 2016 policy’s prior-notice exclusion
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`disclaimed coverage . . . [a]nd the 2006 policy’s relation-back clause accepted coverage for claims
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`. . . .”). Thus, had Perdue been affirmatively attempting to seek coverage under the 2016 policy,
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`then the Related Claims Provision would govern, and it would bear the burden. Here, however,
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`Perdue is unmistakably seeking coverage under the 2017 policy and National Union is attempting
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`to disclaim it based on the “Related Wrongful Act(s)” clause. Since it is an exclusion, National
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`Union bears the burden of showing that the Purchaser and Grower Actions are Related Wrongful
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`Act(s).
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`b. Interpretation of the Contract and the Relevant Actions
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`The parties agree that the dispositive issue in this case is whether the Grower and Purchaser
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`Actions “arise from a common nucleus of facts” and “bear logical or causal relationships to one
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`another.” ECF 81-1 at 17; ECF 82 at 9. The “Related Wrongful Act(s)” clause must be construed
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`“broadly,” but “[a]t some point, a relationship between two claims, though perhaps ‘logical,’ might
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`be so attenuated or unusual that an objectively reasonable insured could not have expected they
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`would be treated as a single claim under the policy.” Northrop Grumman, 809 F. App’x at 88
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`6
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`Case 1:19-cv-01550-SAG Document 83 Filed 02/08/21 Page 7 of 14
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`(citations and internal quotation marks omitted). National Union has, for the following reasons,
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`failed to carry its burden of showing that the Purchaser and Grower Actions are sufficiently related.
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`Both Perdue and National Union assert that the “method or modus operandi” is the most
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`important factor in determining relatedness. ECF 76-1 at 26; ECF 80-1 at 37. While courts in this
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`District have not adopted the “method or modus operandi” terminology per se, it is well-
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`established that the crux of the interrelatedness analysis compares how the alleged schemes are
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`carried out, with a focus on the specific elements of the schemes impacting the plaintiffs’
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`experiences. See W.C. & A.N. Miller Dev. Co. v. Cont'l Cas. Co., No. GJH-14-00425, 2014 WL
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`5812316, at *7 (D. Md. Nov. 7, 2014) (finding actions to be interrelated where a “common
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`scheme” existed “involving the same claimant, the same fee commission, the same contract, and
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`the same real estate transaction”); see also ACE Am. Ins. Co. v. Ascend One Corp., 570 F. Supp.
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`2d 789, 801 (D. Md. 2008) (finding claims unrelated because they were related only by general
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`business practices rather than “focusing on the specific experiences of the . . . plaintiffs”).
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`Here, the Complaints outline two distinct methods of anticompetitive conduct designed to
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`achieve two separate collusive ends. The Grower Plaintiffs, for one, allege that defendants’
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`“Scheme” consisted of: (1) information sharing agreements to share confidential data on Grower
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`compensation with one another, and (2) “no-poach” agreements in which they “agreed not to solicit
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`or recruit . . . [or] hire” Growers from one another. ECF 76-5 at 18-24. The Grower Plaintiffs
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`further allege that, in order to further this scheme, the defendants entered into “contract farming
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`arrangements” with their Growers to control “all aspects of Broiler production,” including
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`compensation for the Grower. Id. at 13. Through these “near uniform” contract farming
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`agreements, the defendants allegedly “set Grower base pay at identical or near identical levels.”
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`Id. at 32. Another major facet of the wage suppression scheme alleged by the Growers is the
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`7
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`Case 1:19-cv-01550-SAG Document 83 Filed 02/08/21 Page 8 of 14
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`“Tournament System” of compensation utilized by each defendant. The Tournament System is “a
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`rigid and formulaic compensation scheme under which Growers” are “rank[ed] against each
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`other,” with these rankings leading to payments above and below base compensation based off of
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`Grower performance. Id. at 35-36. That base compensation rate is, allegedly, set using the wage
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`data exchanged via the information sharing agreement mentioned above. Id.
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`The Purchaser Complaint, on the other hand, makes no mention of “no-poach” agreements,
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`contract farming agreements, the Tournament System, or any of the other alleged mechanisms for
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`manipulating Grower compensation. Instead, the Purchaser Plaintiffs allege a distinct set of
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`“methods” and “mechanisms” utilized by the defendants to “manipulate [broiler] supply.” ECF
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`76-3 at 68. Those methods include reducing their number of breeder chickens so that fewer eggs
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`are laid, reducing the number of eggs placed in incubators, destroying incubating eggs prior to
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`hatching, breaking eggs prior to placement in the incubators, and exporting hatching eggs to non-
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`United States markets. Id. at 68-69. Additionally, Purchaser Plaintiffs allege that defendants
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`slowed down, temporarily closed, or permanently closed a number of broiler processing plants.
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`Id. The Purchaser Complaint also includes allegations that defendants artificially raised prices by
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`manipulating a broiler pricing index relied upon to set contract prices, id. at 143-44, and switching
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`from fixed-price contracts to variable-price contracts to better benefit from rising broiler prices,
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`id. at 136-138. Unsurprisingly, none of these alleged techniques for reducing broiler supply and
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`inflating prices appear in the Grower Complaint. Given the vastly differing alleged methods for
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`carrying out the distinct wage suppression and broiler price inflation schemes, the Grower and
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`Purchaser Actions do not “arise from a common nucleus of facts,” nor do they “bear logical or
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`causal relationships to one another.”
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`8
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`Case 1:19-cv-01550-SAG Document 83 Filed 02/08/21 Page 9 of 14
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`National Union suggests that the above differences are immaterial “micro-distinctions,”
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`ECF 80-1 at 9, and that a common “method or modus operandi” is, in fact, alleged in both Grower
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`and Purchaser Actions. Specifically, it points out that both sets of Plaintiffs allege the central role
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`of Agri Stats in distributing confidential information to the defendants, giving them the analytical
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`insight needed to suppress wages and inflate prices. Id. at 37-38. It also relies on the Complaints’
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`shared reference to many of the same exact trade association meetings, plus their similar
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`descriptions of the poultry industry’s susceptibility to anticompetitive activity, as further evidence
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`of the overlap between the two actions. Id. at 32-36. While these overlapping allegations might
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`arguably appear to be part of a common modus operandi when viewed from a distance, the
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`relatedness analysis requires a closer examination focusing on the “specific experiences of the . . .
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`plaintiffs.” ACE Am. Ins. Co., 570 F. Supp. 2d at 801. The specific experiences of the Grower
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`and Purchaser Plaintiffs are dissimilar from one another, from the various distinct anticompetitive
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`tactics used (i.e. breaking eggs versus “no-poach” agreements) to the markedly different types of
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`Agri Stats data that the defendants used to effectuate the two schemes (wage data versus broiler
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`production data).1 National Union’s suggested commonalities demonstrate only that both sets of
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`Plaintiffs identified several of the same circumstantial enablers of anticompetitive conduct, rather
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`than similar anticompetitive conduct itself. Put differently, trade organization meetings and Agri
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`1 It is particularly telling that while both Complaints discuss Agri Stats at length, defendants’
`alleged use of Agri Stats in the Purchaser and Grower Actions involved using different information
`for wholly different purposes. ECF 76-5 at 10 (summarizing Agri Stats’s role in the alleged
`conspiracy as “serv[ing] as a conduit by which the [defendants] shared, inter alia, detailed,
`competitively sensitive, non-public information about Grower compensation”); ECF 76-3 at 6
`(summarizing the relevant information allegedly shared via Agri Stats to be the exchange of
`“detailed, competitively sensitive, and closely-guarded non-public information about prices,
`capacity, sales volume, and demand. . . .”). This epitomizes the fact that the commonalities
`highlighted by National Union exist only at the most general, abstract level and disappear once
`one delves into the substance of the two respective sets of allegations.
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`Case 1:19-cv-01550-SAG Document 83 Filed 02/08/21 Page 10 of 14
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`Stats are alleged to be vehicles enabling Perdue and others to engage in wage suppression and
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`price inflation, but the substance of the two respective schemes themselves are the ways Perdue
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`and the other defendants used the information to actually harm the Grower and Purchaser
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`plaintiffs—and those courses of action are entirely distinct as outlined above.2
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`To better understand
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`just how substantive
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`the distinctions
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`in anticompetitive
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`methodologies outlined above are, it is useful to consider briefly how the Purchaser and Grower
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`Complaints would look if the supposed “micro-distinctions” were subtracted and only the
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`overlapping high-level allegations relied upon by National Union remained. If Perdue and the
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`other defendants were alleged only to have used Agri Stats and attended the same trade association
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`meetings in order to share confidential information, without any further action, both sets of
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`Plaintiffs would face a considerably tougher challenge in establishing anticompetitive activity, let
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`alone alleging any harm arising from it. As this Court has pointed out elsewhere, there is nothing
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`inherently anticompetitive or illegal about using data benchmarking services like Agri Stats. Jien
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`v. Perdue Farms, Inc., No. 1:19-CV-2521-SAG, 2020 WL 5544183, at *8 (D. Md. Sept. 16, 2020).
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`Similarly, trade association meetings where confidential data are exchanged are not inherently
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`anticompetitive either. In re Musical Instruments and Equip. Antitrust Litig., 798 F.3d 1186, 1196
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`(9th Cir. 2015) (“[P]articipation in trade-organization meetings where information is exchanged
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`and strategies are advocated does not suggest an illegal agreement.”). Instead, it is the
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`implementation of the anticompetitive schemes—through, for example, the destroying of eggs or
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`“no-poach” agreements—that inflates prices or suppresses wages. Allegations pertaining to how
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`2 Importantly, it is not the fact that the Purchasers and Growers allege different harms that is
`dispositive. As National Union points out, parties can be harmed in different ways by the same or
`related anticompetitive conduct. ECF 80-1 at 41. The relatedness analysis centers on comparing
`the alleged anticompetitive conduct, which here involves two distinct schemes separated by
`substantive methodology, not just alleged harm.
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`Case 1:19-cv-01550-SAG Document 83 Filed 02/08/21 Page 11 of 14
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`the schemes were carried out necessarily lie at the very heart of any attempt to determine
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`interrelatedness because without them, the alleged anticompetitive effect giving rise to the two
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`Complaints would hardly exist at all. Yet such methods of implementation are the very allegations
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`National Union suggests should not be compared, despite their critical importance to the Grower
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`and Purchaser Actions as explained in the respective Complaints. The high-level commonalities
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`that National Union references, on the other hand, are, at best, conduits that enable the
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`anticompetitive conduct in question. As such, they cannot overcome the myriad scheme-specific
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`details that differ significantly across the wage suppression and price inflation schemes,
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`particularly since National Union bears the burden of proving interrelatedness in the first place.
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`National Union emphasizes several lines in the Grower Complaint stating that “the
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`[Grower wage suppression] Scheme serves as a means to collectively reduce Broiler output, which
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`ultimately causes an artificial inflation of Broiler prices to final consumers,” ECF 76-5 at 35; see
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`also id. at 36-37 (noting the increase in broiler prices and the lack of correlated increase in grower
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`wages), suggesting that this reference demonstrates interrelatedness. This allegation’s barebones
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`assertion of a relationship between grower compensation and broiler price inflation does not
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`include any details as to how wage suppression increases prices, citing “the law of supply and
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`demand” without any further explanation. The Court is left to guess whether and to what extent
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`the mechanics of this relationship between wage suppression and price inflation overlap with the
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`price inflation conspiracy alleged in the Purchaser Actions. While relatedness is to be construed
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`broadly, one standalone paragraph, amidst pages and pages detailing highly specific and entirely
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`distinct methods of suppressing wages, is not enough to transform the entire action into a Related
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`Wrongful Act. Indeed, it is telling that the Purchaser Complaint contains no reference whatsoever
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`to a relationship between increased prices and wage suppression (or any of the other scheme-
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`11
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`Case 1:19-cv-01550-SAG Document 83 Filed 02/08/21 Page 12 of 14
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`specific facts underlying the Grower Actions).3 If suppressing Grower wages was truly part of or
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`related to the alleged scheme to inflate broiler prices, surely the Purchaser Plaintiffs would make
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`at least some mention of how such wage manipulation tied to price inflation in their detailed 466-
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`paragraph, 148-page Complaint. Cumulatively, a few conclusory lines in the Grower Complaint
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`cannot overcome the distinct wage suppression scheme alleged or the fact that the Purchaser
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`Complaint fails to mention wage suppression at all—particularly since National Union bears the
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`burden of showing relatedness.4
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`Furthermore, while National Union provides a number of cases to support its position, none
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`of them stand for the proposition that entirely distinct anticompetitive methodologies can be
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`overlooked in favor of a handful of high-level, circumstantial parallels pertaining to general factor
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`that enable the anticompetitive conduct. In fact, each of National Union’s cases involves sets of
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`3 National Union cites several references in the Purchaser Complaint to different contract-farmer
`antitrust cases, ECF 80-1 at 15, but those references only “suggest a practice of coordination and
`collusion among Defendants” generally, see ECF 76-3 at 64-65, 118. In other words, the
`Purchasers reference the other, separate contract-grower actions as examples of collusion existing
`in the industry at large, thus making it more plausible that it exists in the particular circumstance
`of price inflation as well. There are no allegations in the Purchaser Complaint actually suggesting
`a logical or causal relationship between price inflation and wage suppression.
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` While the Court in Section III(a)(i) interpreted the 2017 Policy’s “Related Wrongful Act(s)”
`provision to restrict the relatedness analysis to the pleadings alone, its decision to grant summary
`judgment for Perdue would not have changed even had National Union’s materials from outside
`the pleadings been considered. Specifically, National Union relies upon several references in the
`Grower Complaint that call the Purchaser Actions an “ongoing, related anti-trust case,” ECF 80-6
`at 4, and an “overarching, unitary conspiracy,” ECF 80-7 at 3, among other references. See ECF
`80-1 at 18-19. As with the language contained in ¶ 145 addressed above, such isolated mentions
`of the Purchaser Actions and their relationship to the Grower Actions is not enough to overcome
`the divergent specific wrongful acts alleged in the two respective Complaints (namely, suppressing
`wages versus inflating prices) as well as the divergent methods used to achieve those
`anticompetitive ends. One-off statements made by litigants in motion-specific contexts having
`nothing to do with either the relatedness analysis or the pleadings, and made over the course of
`extensive litigation, “are hardly reliable indicators of relatedness.” See Northrop Grumman, 809
`F. App’x at 89. The same goes for National Union’s reliance on a handful of references to growers
`made in depositions taken as part of the Purchaser Actions. ECF 80-1 at 19.
`
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` 4
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`12
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`

`

`Case 1:19-cv-01550-SAG Document 83 Filed 02/08/21 Page 13 of 14
`
`allegations constituting a closely related common transaction or scheme, demonstrating by contrast
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`just how unrelated the Grower and Purchaser Actions are here. W.C. & A.N. Miller Dev. Co., for
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`example, involved a lawsuit to recover damages associated with alleged actions taken to avoid
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`paying a judgment issued in an earlier proceeding. 2014 WL 5812316, at *7. This subsequent
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`recovery action was deemed to be related to the earlier lawsuit in which judgment had been issued,
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`because the earlier lawsuit was a but-for cause of the later one.5 Id. Kilcher v. Cont'l Cas. Co.,
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`meanwhile, found relatedness because the harm (breach of fiduciary duty) was carried out by
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`defendant “in the same way” regardless of plaintiff. 747 F.3d 983, 990 (8th Cir. 2014). While the
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`defendant “made different alleged misstatements, omissions, and promises on different dates to
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`each Plaintiff,” the core mechanics of the scheme remained the same: preying on inexperienced
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`investors by advising them to invest in certain life insurance policies and other instruments. Id. at
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`986.6 Similarly, in Realcomp II, Ltd. v. Ace Am. Ins. Co., the court deemed the claims to be
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`interrelated because they were based upon the exact same scheme, preventing real-estate brokers
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`from accessing a database containing key property information. 46 F. Supp. 3d 736, 742 (E.D.
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`Mich. 2014). Northrop Grumman, lastly, also involved allegations of nearly the exact same
`
`
`5 National Union points out that the Miller Dev. Court stated that “so long as even a single fact,
`circumstance, situation, transaction or event logically or causally connects [the actions], then they
`would be ‘Interrelated Wrongful Acts.’” ECF 82 at 7. However, this reflects the expansive terms
`of the contractual provision at issue in that case and is not a principle that can be readily imported.
`In fact, the far more lenient contractual definition of “relatedness” in Miller Dev. undermines the
`case’s persuasive relevance here, where a stricter definition requiring a “common nucleus of facts”
`exists in the 2017 Policy.
`
` 6
`
` The “different alleged misstatements, omissions, and promises on different dates to each
`Plaintiff” in Kilcher are the genesis of National Union’s “micro-distinctions” argument. ECF 80-
`1 at 30-31. The contrast between those distinctions and the ones identified in this case is striking.
`Making one misstatement or omission instead of another is merely a variation on a theme—a
`different tactic in a singular scheme. Reducing a breeder chicken flock versus engaging in a “no-
`poach” agreement, on the other hand, goes well beyond mere tactical variation and is a different
`form of conduct entirely, evincing a completely different scheme.
`13
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`

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`Case 1:19-cv-01550-SAG Document 83 Filed 02/08/21 Page 14 of 14
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`scheme—the mismanagement of retirement accounts by overpaying itself for certain account
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`management services. 809 F. App’x at 89-90.
`
`Here, on the other hand, there is no common scheme, transaction, or lawsuit tying the
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`Purchaser and Grower Actions together. The Grower Actions do not arise out of the previous
`
`Purchaser Actions, as in W.C. & A.N. Miller Dev. Co. and Realcomp II, nor do they include
`
`allegations suggesting that the Growers were injured by the same sort of anticompetitive acts as
`
`the Purchasers were, as in Kilcher and Northrop Grumman. Instead, the Purchaser and Grower
`
`Actions allege different antitrust conspiracies facilitated by wholly distinct wrongful acts—the
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`utilization of methods like “no-poach” agreements for restricting competition of labor in the
`
`Grower Actions, contrasted with the utilization of methods like egg destruction and exporting for
`
`reducing supply of broilers in the Purchaser Actions. Given these stark and substantive differences
`
`in methodology underlying the two respective Complaints, “an objectively reasonable insured
`
`could not have expected [the Grower and Purchaser Actions] would be treated as a single claim
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`under the policy” and thus they are not logically or causally connected. See Northrop Grumman,
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`809 F. App’x at 88. National Union has thus not carried its burden of showing that the Purchaser
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`and Grower Actions are Related Wrongful Act(s) under the terms of the 2017 Policy.
`
`IV. CONCLUSION
`
`For the reasons set forth above, Perdue’s Motion for Summary Judgment, ECF 76-1, will
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`be GRANTED, and National Union’s Cross Motion for Summary Judgment, ECF 80-1, will be
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`DENIED. A separate implementing Order follows.
`
`Dated: February 8, 2021
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` /s/
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`
`Stephanie A. Gallagher
`United States District Judge
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`14
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`

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