Case 1:19-cv-02521-SAG Document 408 Filed 02/02/21 Page 1 of 59
`Case 1:19—cv-02521-SAG Document 408 Filed 02/02/21 Page 1 Of 59
`
`UNITED STATES DISTRICT COURT
`
`DISTRICT OF MARYLAND
`
`JUDY JIEN, et al.,
`
`vs.
`
`Plaintiffs,
`
`CA. No. 1:19-cv-02521-SAG
`
`OMNIBUS OPPOSITION TO
`DEFENDANTS’ MOTIONS
`
`PERDUE FARMS, INC. et al.,
`
`TO DISMISS
`
`Defendants.
`
`
`

`

`Case 1:19-cv-02521-SAG Document 408 Filed 02/02/21 Page 2 of 59
`Case 1:19—cv-02521-SAG Document 408 Filed 02/02/21 Page 2 of 59
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`TABLE OF CONTENTS
`
`age
`
`I.
`
`II.
`
`INTRODUCTION ............................................................................................................. 1
`
`STATEMENT OF FACTS ................................................................................................ 2
`
`III.
`
`LEGAL STANDARD ........................................................................................................ 8
`
`IV.
`
`ARGUMENT ..................................................................................................................... 9
`
`A.
`
`NAMED PLAINTIFFS HAVE STANDING TO ASSERT
`
`CLAIMS ON BEHALF OF ALL CLASS MElVfl3ERS. ..................................... 10
`
`l.
`
`2.
`
`Defendants’ Arguments Concerning the Typicality of Class
`Representatives Are Premature................................................................ 10
`
`Defendants’ Arguments Are Inconsistent with This Court’s
`Prior Opinion and Other Compensation-Fixing Cases. ........................... 14
`
`THE SAC DOES NOT RELY ON GROUP PLEADING................................... 16
`
`THE SAC PLAUSIBLY ALLEGES A PER SE CLAIM
`
`AGAINST JENNIE-O, SANDERSON FARMS, AND
`MOUNTAIRE FARMS. ...................................................................................... 20
`
`B.
`
`C.
`
`l.
`
`The SAC Links the Direct Evidence of the Per Se Claim to
`
`Jennie-O, Sanderson Farms, and Mountaire Farms. ................................ 20
`
`2.
`
`Individual Defendants’ Arguments to the Contrary Are
`Without Merit........................................................................................... 22
`
`a.
`
`b.
`
`c.
`
`Jennie-0’s arguments to dismiss the per se claim are
`unavailing..................................................................................... 22
`
`Sanderson Farms’ arguments to dismiss the per se claim are
`unavailing..................................................................................... 24
`
`Mountaire Farms’ arguments to dismiss the per se claim are
`unavailing..................................................................................... 27
`
`D.
`
`THE SAC PLAUSIBLY ALLEGES A RULE OF REASON
`
`CLAIM AGAINST JENNIE—O, MOUNTAIRE FARMS, AND
`SANDERSON FARMS ....................................................................................... 29
`
`

`

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`Plaintiffs Adequately Alleged That Jennie-O, Mountaire
`Farms, and Sanderson Farms Participated in the Agreement
`to Exchange Information.......................................................................... 30
`
`Plaintiffs’ Allegations of Anticompetitive Effects Remain
`Sufficient.................................................................................................. 3 1
`
`Individual Defendants’ Arguments to the Contrary Are
`Unavailing................................................................................................ 32
`
`a.
`
`Jennie-O’s arguments to dismiss the rule of reason claim are
`unavailing..................................................................................... 32
`
`Mountaire Farms’ arguments to dismiss the rule of reason
`claim are unavailing..................................................................... 35
`
`Sanderson Farms’ arguments to dismiss the rule of reason
`claim are unavailing..................................................................... 36
`
`E.
`
`PLAINTIFFS’ CLAIMS AGAINST JENNIE-O ARE NOT TIME
`
`BARRED. ............................................................................................................ 38
`
`1.
`
`Plaintiffs May Seek Damages against Jennie-O under
`Count I for the Entire Class Period. ......................................................... 39
`
`a.
`
`b.
`
`Jennie-O is jointly and severally liable for prior acts of
`co-conspirators under Count I...................................................... 39
`
`The SAC alleges facts indicating Jennie-O knew “what
`had gone on before” joining the WMS meetings and WMS
`surveys in 2015. ........................................................................... 42
`
`2.
`
`Plaintiffs May Seek Damages against Jennie-O under
`Count II for the Entire Class Period......................................................... 43
`
`a.
`
`b.
`
`Plaintiffs have adequately pled fraudulent concealment of
`Count II. ....................................................................................... 43
`
`Plaintiffs allege that Jennie-O engaged in conspiratorial
`misconduct prior to 2015. ............................................................ 49
`
`CONCLUSION ................................................................................................................ 49
`
`_ii_
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`

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`TABLE OF AUTHORITIES
`
`I?IEI)]E]2¢4AIJ (:[\£§IEE§
`
`Page(s)
`
`3 Lab, Inc. v. Kim,
`2007 WL 2177513 (D.N.J. July 26, 2007) ............................................................................... 27
`
`Amchem Prods. v. Windsor,
`521[LS.591(1997) ................................................................................................................. 11
`
`Baehr v. Creig Northrop Team, P. C.,
`2018 WL 643502 (D. Md. Dec. 7, 2018) .................................................................................46
`
`Baker v. United States,
`21 F.2d 903 (4th Cir. 1927) ............................................................................................... 38, 40
`
`Bautista v. CytoSport, Inc.,
`223 F. Supp. 3d 182 (S.D.N.Y. 2016) ...................................................................................... 15
`
`Bell Atl. Corp. v. Twombly,
`550 US. 544 (2007) ................................................................................................. 8, 22, 24, 25
`
`Bender v. Elmore & Throop, P. C.,
`963 F.3d 403 (4th Cir. 2020) ................................................................................................... 33
`
`Blum v. Yaretsky,
`457ILS.991(1982) ................................................................................................................. 13
`
`In re Broiler Antitrust Litig. ,
`290FISupp.3d722(NJ).HL2017) ....................................................................................... 10
`
`Burgess v. Baltimore Police Dep ’t,
`2016 WL 795975 (D. Md. Mar. 1, 2016) ................................................................................. 17
`
`Burtch v. Milberg Factors, Inc.,
`662 F.3d 212 (3d Cir. 2011)..................................................................................................... 26
`
`Burton v. Chrysler Grp. LLC,
`2012 WL 831843 (D.S.C. Mar. 12, 2012) ............................................................................... 12
`
`Carrier Corp. v. Outokumpu Oyj,
`673 F.3d 430 (6th Cir. 2012) ...................................................................................................46
`
`Cobonv.AvnetInc,
`687 F. Supp. 2d 914 (D. Ariz. 2010) ....................................................................................... 27
`
`-iii-
`
`

`

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`Cont’l Ore Co. v. Union Carbide & Carbon Corp.,
`370 US. 690 (1962) ................................................................................................................. 19
`
`Dickson v. Microsoft Corp.,
`309 F.3d 193 (4th Cir. 2002) ............................................................................................. 29, 31
`
`Edmonson v. Eagle Nat ’l Bank,
`922 F.3d 535 (4th Cir. 2019) .............................................................................................46, 47
`
`Geske v. PNY Techs., Inc.,
`2020 WL 7042887 (N.D. 111. Nov. 30, 2020) .......................................................................... 13
`
`Giuliano v. SanDisk Corp.,
`2014 WL 4685012 (N.D. Cal. Sept. 19, 2014) ........................................................................ 12
`
`G0 Comput, Inc. v. Microsoft Corp.,
`508 F.3d 170 (4th Cir. 2007) ...................................................................................................47
`
`In re GSE Bonds Antitrust Litig.,
`396 F. Supp. 3d 354 (S.D.N.Y. 2019) ...................................................................................... 26
`
`Harrison v. E.I. du Pont de Nemours & Co.,
`2016 WL 3231535 (N.D. Cal. June 13, 2016) ......................................................................... 12
`
`Hester v. Martindale—Hubbell, Inc.,
`659 F.2d 433 (4th Cir. 1981) ................................................................................................... 39
`
`Hinds Cnty. v. Wachovia Bank NA,
`700 F. Supp. 2d 378 (S.D.N.Y. 2010) .......................................................................... 25, 27, 28
`
`Houck v. Substitute Tr. Servs., Inc.,
`791 F.3d 473 (4th Cir. 2015) ..................................................................................................... 8
`
`Huey v. Honeywell, Inc.,
`82 F.3d 327 (9th Cir. 1996) ..................................................................................................... 34
`
`In re Interior Molded Doors Antitrust Litig. ,
`2019 WL 4478734 (E.D. Va. Sept. 18, 2019) .......................................................................... 13
`
`In re K-Dur Antitrust Litig. ,
`338 F. Supp. 2d 517 (D.N.J. 2004) ..........................................................................................41
`
`Kjessler v. Zaappaaz, Inc.,
`2019 WL 3017132 (S.D. Tex. Apr. 24, 2019) ......................................................................... 15
`
`In re Liquid Aluminum Sulfate Antitrust Litig. ,
`2017 WL 3131977 (D.N.J. July 20, 2017) .........................................................................40, 41
`
`-iv-
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`

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`Los Gatos Mercantile, Inc. v. E.I. DuPont De Nemours & Co.,
`2015 WL 4755335 (N.D. Cal. Aug. 11, 2015) ................................................................. 12, 13
`
`Lucero v. Early,
`873 F.3d 466, 469 (4th Cir. 2017). ............................................................................................ 8
`
`Marian Bank v. Elec. Payment Servs., Inc.,
`1997 WL 367332 (D. Del. Feb. 5, 1997) .................................................................................41
`
`Marsh v. United States,
`2016 WL 247563 (D. Md. Jan. 20, 2016) .................................................................................. 9
`
`McCleary—Evans v. Maryland Dep ’t of Transp. ,
`780 F.3d 582 (4th Cir. 2015) ..................................................................................................... 8
`
`In re Mid-Atlantic Toyota Antitrust Litig.,
`525 F. Supp. 1265. (D. Md. 1981) ...........................................................................................41
`
`Moore v. Mars Petcare US, Inc.,
`966 F.3d 1007 (9th Cir. 2020) ................................................................................................. 15
`
`Nitsch v. Dreamworks Animation SKG Inc. ,
`315 F.R.D. 270 (ND. Cal. 2016) ............................................................................................. 14
`
`Olean Wholesale Grocery Coop., Inc. v. Agri Stats, Inc.,
`2020 WL 6134982 (N.D. 111. Oct. 19, 2020) ............................................................................ 27
`
`Pearson v. Target Corp.,
`2012 WL 7761986 (ND. 111. Nov. 9, 2012) ............................................................................ 13
`
`Pocahontas Supreme Coal Co. v. Bethlehem Steel Corp.,
`828 F.2d 211 (4th Cir. 1987) ...................................................................................................46
`
`In re Polyurethane Foam Antitrust Litig. ,
`799 F. Supp. 2d 777 (ND. Ohio 2011) ....................................................................................41
`
`In re Polyurethane Foam Antitrust Litig. ,
`2011 WL 13133853 (ND. Ohio July 27, 2011) ...................................................................... 32
`
`Precision Assocs. v. Panalpina World Transp. (Holding) Ltd.,
`2015 WL 13650032 (E.D.N.Y. June 24, 2015) ....................................................................... 23
`
`In re Processed Egg Prod. Antitrust Litig. ,
`821 F. Supp. 2d 709 (ED. Pa. 2011) ....................................................................................... 25
`
`Ray v. Roane,
`948 F.3d 222 (4th Cir. 2020) ...................................................................................................43
`
`

`

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`Robertson v. Sea Pines Real Estate Cos., Inc.,
`679 F.3d 278 (4th Cir. 2012) ............................................................................................. 25, 29
`
`Rosedale v. CarChex LLC,
`2020 WL 6801922 (D. Md. Nov. 19, 2020) ............................................................................ 13
`
`Schlesinger v. Reservists Comm. to Stop the War,
`418 US. 208 (1974) ................................................................................................................. 13
`
`SD3, LLC v. Black & Decker (US) Inc.,
`801 F.3d 412 (4th Cir. 2015) ................................................................................... 8, 17, 23, 26
`
`Simon v. E. Ky. Welfare Rights 0rg.,
`426 US. 26 (1976) ................................................................................................................... 13
`
`Singh v. Lenovo (United States) Inc.,
`2021 WL 37660 (D. Md. Jan. 4, 2021) .................................................................................... 11
`
`Spokeo, Inc. v. Robins,
`136 S. Ct. 1540 (2016) ............................................................................................................. 10
`
`Supermarket ofMarlinton, Inc. v. Meadow Gold Dairies, Inc.,
`71 F.3d 119 (4th Cir. 1995) .....................................................................................................44
`
`In re Titanium Dioxide Antitrust Litig. ,
`959 F. Supp. 2d 799 (D. Md. 2013) .........................................................................................45
`
`Todd v. Exxon Corp.,
`275 F.3d 191 (2d Cir. 2001)............................................................................................... 15, 32
`
`Toledo Mack Sales & Serv. v. Mack Trucks, Inc. ,
`530 F.3d 204 (3d Cir. 2008)..................................................................................................... 25
`
`United Mine Workers ofAm. v. Pennington,
`381 US. 657 (1965) ................................................................................................................. 29
`
`United States v. Abu-Maizar,
`1991 WL 153658 (4th Cir. Aug. 14, 1991) ..............................................................................40
`
`United States v. Clay,
`1994 US. App. LEXIS 1481 (4th Cir. Jan. 31, 1994) .......................................................40, 49
`
`United States v. Sicle,
`1993 WL 280488 (4th Cir. July 26, 1993) ...............................................................................40
`
`United States v. Tedder,
`801 F.2d 1437 (4th Cir. 1986) .................................................................................................40
`
`-vi-
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`United States v. Warner,
`690 F.2d 545 (6th Cir. 1982) ...................................................................................................42
`
`Van Buren v. Walmart, Inc.,
`2020 WL 1064823 (D. Md. Mar. 5, 2020) ............................................................................... 11
`
`Wagner v. Gen. Nutrition Corp.,
`2017 WL 3070772 (ND. 111. July 19, 2017) ............................................................................ 15
`
`Walls v. Sierra Pac. Mortg. Co.,
`2020 WL 1528626 (D. Md. Mar. 31, 2020) .............................................................................46
`
`In re Zetia (Ezetimibe) Antitrust Litig.,
`2019 WL 1397228 (E.D. Va. Feb. 6, 2019) ............................................................................. 12
`
`In re Zetia Ezetimibe Antitrust Litig.,
`2019 U.S. Dist. LEXIS 220078 (E.D. Va. Dec. 20, 2019) ................................................ 22, 25
`
`FEDERAL STATUTES
`
`Sherman Act Section 1, 15 U.S.C. § 1 ........................................................................................... 28
`
`FEDERAL RULES
`
`Fed. R. Civ. P. 12(b)(6) .............................................................................................................. 8, 33
`
`-Vii -
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`

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`I.
`
`INTRODUCTION
`
`Citing compelling direct evidence, this Court held that Plaintiffs plausibly alleged two
`
`unlawful agreements in their First Amended Complaint (“FAC”)1: (1) a per se illegal agreement
`
`to fix compensation for poultry processing workers; and (2) an agreement
`
`to exchange
`
`competitively sensitive compensation information, in violation ofthe rule ofreason. Memorandum
`
`Opinion (“Opinion”), at 16, 27, Sept. 16, 2020, ECF No. 378. The FAC brought claims against 11
`
`corporate families and five other corporations for participating in these unlawful agreements, but
`
`the Court held that the FAC failed to adequately “link the[] direct evidence” of the conspiracy to
`
`particular corporate parents or subsidiaries within those 11 corporate families.
`
`Id. at 10.
`
`Additionally, while the Court found that the FAC properly alleged fraudulent concealment of
`
`Plaintiffs’ per se claim, the Court rejected application of fiaudulent concealment to Plaintiffs’ rule
`
`of reason claim.
`
`Plaintiffs’ Second Amended Complaint (“SAC”)2 cures both of the problems that the Court
`
`identified in its prior Opinion: It drops multiple corporate entities as defendants and expressly ties
`
`the remaining Defendants to specific conspiratorial meetings and actions. It also provides a
`
`detailed account of the steps Defendants took to conceal their unlawful information exchange.
`
`Recognizing the strength of the SAC’s allegations, nearly all Defendants have declined to
`
`challenge the plausibility and temporal scope of Plaintiffs’ claims.
`
`Instead, most Defendants seek only to narrow the scope of the proposed class, arguing that
`
`the named Plaintiffs—hourly workers in chicken processing plants—lack standing to bring
`
`I “FAC” or “First Amended Complaint” refers to Amended Consolidated Amended Complaint,
`Dec. 23, 2019, ECF No. 258.
`
`2 “SAC” or “Second Amended Complaint” refers to Second Amended Consolidated
`Complaint, Nov. 2, 2020, ECF No. 386.
`
`-1-
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`

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`antitrust claims on behalf of salaried workers and turkey processing workers. MTD3 at 4-7.
`
`Defendants do not contest, however, that named Plaintiffs have Article III standing to pursue their
`
`own claims or that employees of chicken and turkey processors suffered the same type of
`
`compensation suppression injury from the conspiracy. SAC, W 3-4, 10, 151-152, 264-69. At this
`
`stage of the litigation, no more is required; it is wholly premature to litigate the scope of the
`
`putative class or the typicality of class representatives. For those reasons, Defendants’ motion to
`
`dismiss for lack of standing should be dismissed.
`
`Only three individual Defendants—Jennie-O Turkey Store, Inc. (“Jennie-O”), Sanderson
`
`Farms, Inc. (“Sanderson Farms”), and Mountaire Farms, Inc. (“Mountaire Farms”) (collectively,
`
`the “Individual Defendants”)—argue that the SAC fails to state a claim against them. Jennie-O
`
`MTD4 at 3; Mountaire MTD5 at 4; Sanderson MTD6 at 6. Jennie-O also argues that the claims
`
`against it are time-barred. Jennie-O MTD at 13. Each of these arguments ignores new, compelling
`
`allegations in the SAC and seeks to relitigate issues the Court has squarely resolved. Accordingly,
`
`the Court should also deny each of the Individual Defendants’ motions to dismiss.
`
`II.
`
`STATEMENT OF FACTS
`
`Plaintiffs’ First Amended Complaint alleged that the nation’s largest poultry processors
`
`(“Defendant Processors”) conspired with two consulting companies—Agri Stats, Inc. (“Agri
`
`3 “MTD” refers to Memorandum in Support of Defendants’ Motion to Dismiss for Lack of
`Standing Pursuant to Fed. R. Civ. P. 12(b)(l), Dec. 18, 2020, ECF No. 398.
`
`4 “Jennie-O MTD” refers to Defendant Jennie-O Turkey Store, Inc.’s Memorandum of Law in
`Support of Its Motion to Dismiss Plaintiffs’ Second Amended Consolidated Complaint, Dec. 18,
`2020, ECF No. 399-1.
`
`5 “Mountaire MTD” refers to Defendant Mountaire Farms Inc.’s Memorandum in Support of Its
`Motion to Dismiss, Dec. 18, 2020, ECF No. 400-1.
`
`6 “Sanderson MTD” refers to Memorandum in Support of Sanderson Farms Inc.’s Motion to
`Dismiss, Dec. 18, 2020, ECF No. 401-1.
`
`_ 2 _
`
`

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`Stats”) and WMS and Company, Inc. (“WMS”)—to depress the compensation paid to poultry
`
`processing workers. FAC, 1H 2. Defendants employed a three-pronged strategy to carry out this
`
`anticompetitive scheme:
`
`First, a secret “Compensation Committee” organized an annual meeting at the Hilton
`
`Sandestin Resort Hotel & Spa in Destin, Florida, where Defendant Processors’ senior executives
`
`gathered to discuss and ultimately fix wages, salaries, and benefits for poultry processing workers.
`
`Id., M 135-154. Each year, the Compensation Committee organized the compensation-fixing
`
`meeting around the same time as the U.S. Poultry & Egg Association’s well-publicized annual
`
`Human Resources Seminar. Id., 1T 136. But according to a former senior executive of Perdue
`
`Farms, the Compensation Committee’s meetings were “off the books” because they involved such
`
`sensitive discussions. Id.
`
`A former employee of co-conspirator Keystone Foods explained that a poultry processor
`
`would be expelled from the Compensation Committee if its executives failed to attend the meetings
`
`in person for two years in a row. Id., 1T 152. This threat ensured that a critical mass of executives
`
`was present at each meeting for in-person discussions. Id.
`
`A compensation survey conducted by WMS guided the conversations at these secret
`
`meetings. Id., 1H] 139-154. Before each meeting, Defendant Processors reported detailed, current
`
`compensation data to WMS, including the wages, salaries, bonuses, and benefits paid to each type
`
`of employee at their poultry processing plants.
`
`After WMS circulated the survey results at the “off the books” meetings, it delivered a
`
`PowerPoint presentation to the attendees that emphasized the average and median wage rates and
`
`salaries for each poultry plant position. Id., 11 141. Following the PowerPoint presentation, the
`
`meeting attendees engaged in roundtable discussions to review the results of the WMS survey and
`
`-3-
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`

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`to determine and agree upon the optimal compensation for poultry plant workers. Id. , 1] 148. While
`
`WMS purportedly anonymized this data by replacing Defendant Processor names with a number,
`
`it was blatantly apparent which processor had provided which compensation information. Id.,
`
`1] 146. A former employee of Perdue Farms explained that it was not difficult to determine what
`
`each participating processor had reported when “you’re sitting in a meeting and the person across
`
`from you [from a competing processor] is reporting on what they do.” Id.
`
`During their roundtable discussions, Defendant Processors agreed upon and fixed the
`
`wages, salaries, and benefits that they would provide to Class Members. Id., 1H] 137-138, 148. The
`
`attendees also chastised any Defendant Processor that had deviated—by making unauthorized
`
`increases in compensation—from the wages, salaries, and benefits that had been fixed at prior in-
`
`person meetings. Id., 1T 148. Around 2018, a senior executive from Tyson Foods confessed that the
`
`“discussions about wages, salaries and benefits at the ‘off the books’ meetings .
`
`.
`
`. were so
`
`inappropriate and improper” that Tyson Foods would no longer attend them. Id., 1T 151.
`
`Second, Defendant Processors used monthly Agri Stats reports to track their competitors’
`
`compensation and ensure they were adhering to their agreement. Id., M 155-183. Approximately
`
`95 percent of poultry processors in the United States,
`
`including each Defendant Processor,
`
`subscribed to Agri Stats during the Class Period—and paid millions of dollars for those
`
`subscriptions. Id., 1H] 161, 180. All subscribers adhered to Agri Stats’ give-data-to-get-data policy:
`
`in order to obtain Agri Stats’ reports, subscribers had to provide terabytes of competitively
`
`sensitive compensation data to Agri Stats. Id., 1] 156. These Agri Stats reports were only available
`
`to poultry processors; they were not available to workers or members of the general public. Id., 1]
`
`159.
`
`

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`Every month, Agri Stats collected the current salaries and hourly wages paid to the workers
`
`at each subscriber’s poultry processing plants. Id., 1H] 162-163. Agri Stats then compiled that
`
`compensation data and distributed the compilation to its subscribers in monthly reports. Id. While
`
`Agri Stats claimed the data was reported anonymously, the data compilations were sufficiently
`
`granular and disaggregated that executives of Defendant Processors could, and did, easily match
`
`the distributed compensation data to specific poultry processing plants owned by specific
`
`Defendant Processors in specific regions. Id., 1] 164. A former Perdue Farms executive said that,
`
`although Agri Stats data was “supposedly confidential,” he knew from the “good old boy system”
`
`that Perdue Farms and every other poultry processor knew precisely which company reported
`
`which data. Id., 1] 165. He said it is “just bullshit” to suggest that processors did not know which
`
`company reported which compensation data to Agri Stats. Id. Similarly, a former Pilgrim’s
`
`employee explained that colleagues would routinely point out that certain Agri Stats compensation
`
`data was associated with a particular competitor’s plant in a specific location. Id., 11 204.
`
`Defendant Processers used the exchange of current compensation data through Agri Stats
`
`to harmonize compensation paid to plant workers. Id., 1] 173. For example, a former Pilgrim’s
`
`employee said that a corporate officer visited each of the company’s plants on a quarterly basis to
`
`review Agri Stats data with plant management and ensure that each Pilgrim’s plant was paying
`
`wages that were “exactly in the middle” of the reported Agri Stats data. Id. Thus, as a former
`
`employee of Perdue Farms observed, it would be “stupid to think” that Agri Stats did not have “an
`
`influence on” wages paid to poultry plant workers. Id., 1T 170. The former Perdue Farms employee
`
`explained that Agri Stats was responsible for “collusion in the poultry industry.” Id., 1T 157.
`
`Third, in addition to verifying their competitors’ compensation practices through Agri
`
`Stats, managers at Defendant Processors’ plants routinely monitored competitors’ compensation
`
`-5-
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`

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`Case 1:19-cv-02521-SAG Document 408 Filed 02/02/21 Page 14 of 59
`Case 1:19—cv-02521-SAG Document 408 Filed 02/02/21 Page 14 of 59
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`plans by contacting managers at rival plants and asking about their current and future plans for
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`wages, salaries, and benefits. 1d, M 184-193. Multiple confidential witnesses confirmed this
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`information-sharing network. A former Peco employee said that human resources managers at
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`rival poultry processing plants “shared” compensation information “all the time.” Id., 11 186. A
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`former Pilgrim’s employee explained that corporate headquarters would regularly ask each plant
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`to collect information about current and future compensation at competing poultry plants, and that
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`such information was often obtained directly from the competing plants themselves. Id., 11 204.
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`Likewise, a former human resources manager who worked at both a Perdue and a George’s
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`poultry processing plant said that both plants routinely exchanged data with rival plants. Id. , 1] 192.
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`She explained that managers of the Perdue plant and the George’s plant contacted managers of
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`rival poultry plants operated by Pilgrim’s, Cargill, and Virginia Poultry Growers Cooperative and
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`requested both the current hourly wage rates for plant workers as well as any planned future
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`increases to those wage rates. Id. The former human resources manager said, “We would
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`collaborate. We would talk among each other to see what they were doing for pay.” Id. ; see also
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`1] 188-190 (confidential witnesses describing plant-to-plant information exchanges involving
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`multiple plants, including some belonging to Pilgrim’s, Tyson Foods, Perdue, Butterball, and
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`Wayne Farms).
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`On March 2, 2020, Defendants moved to dismiss the FAC, arguing that Plaintiffs had not
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`adequately alleged any unlawful agreement among Defendants. ECF No. 344. The Court rejected
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`this argument, citing “‘smoking gun’” conspiracy evidence. Opinion at 12. Ultimately, the Court
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`concluded that the FAC alleged: (l) “a plausible per se wage fixing conspiracy” (Id. at 11); and
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`(2) “an agreement to share [compensation] information” with “plausible anticompetitive effects,”
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`in violation of the rule of reason (Id., 1] 20, 27).
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`Specifically, with respect to the per se claim, the Court found that Plaintiffs had alleged
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`direct evidence that made “plausible a conclusion” that “secret [WMS] meetings involved an
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`agreement
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`to fix wages” and “that plant-to-plant communications furthered the wage fixing
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`conspiracy.” Id. at 13. The Court explained that the “most important direct evidence” was the
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`statement “by a senior Tyson executive, fretting about the propriety of wage discussions at the
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`secret [WMS] meetings” and indicating that Tyson would no longer attend them. Id. at 12.
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`With respect to the rule of reason claim, the Court specifically held that Plaintiffs had “amply
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`pled an agreement to share information among Defendants, given the plethora of alleged facts in
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`the Amended Complaint pertaining to secret meetings, WMS, Agri Stats, and plant-to-plant
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`communications.” Id. at 26. The Court also found that “the alleged anticompetitive effects” of the
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`agreement were “economically plausible in the relevant market.” Id.
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`Yet the Court also found that, with the exception of five defendants, the FAC did not
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`adequately allege who participated in those unlawful agreements because it “lumped the various
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`subsidiaries of many of the Defendant Processors together, without alleging any facts specific to
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`each entity or each corporate family” (Id. at 8). Additionally, the Court held that the FAC
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`adequately pled fraudulent concealment of Plaintiffs’ per se claim, thereby tolling the statute of
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`limitations (id. at 28-30), but did not adequately allege fraudulent concealment of Plaintiffs’ rule
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`of reason claim. Id. at 30-32.
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`On November 2, 2020, Plaintiffs filed the SAC, curing both problems the Court identified
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`in its Opinion. Thirty-two entities that were identified as defendants in the FAC—by virtue of their
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`corporate affiliation with other defendants—have been dropped as defendants in the SAC; as for
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`the remaining 19 defendants, the SAC explicitly “links” each of them to the direct conspiracy
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`evidence that supports Plaintiffs’ claims. SAC, W 20—62. The SAC also contains detailed
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