CASE 0:19-cv-02723-JRT-HB Doc. 156 Filed 10/20/20 Page 1 of 87
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`UNITED STATES DISTRICT COURT
`DISTRICT OF MINNESOTA
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`IN RE PORK ANTITRUST LITIGATION
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`This Document Relates To:
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`All Actions.
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`Civil Nos. 18-1776, 19-1578, and
`19-2723 (JRT/LIB)
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`AMENDED MEMORANDUM
`OPINION AND ORDER
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`Brian D. Clark and W. Joseph Bruckner, LOCKRIDGE GRINDAL NAUEN PLLP,
`100 Washington Avenue South, Suite 2200, Minneapolis, Minnesota 55401;
`Bobby Pouya, PEARSON SIMON & WARSHAW, LLP, 15165 Ventura
`Boulevard, Suite 400, Sherman Oaks, California 91403, for the Direct
`Purchaser Plaintiffs.
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`Daniel C. Hedlund, GUSTAFSON GLUEK PLLC, 120 South Sixth Street, Suite
`2600, Minneapolis, Minnesota 55402; Shana Scarlett, HAGENS BERMAN
`SOBOL SHAPIRO LLP, 715 Hearst Avenue, Suite 202, Berkeley, California
`94710; Steve W. Berman, HAGENS BERMAN SOBOL SHAPIRO LLP, 1301 2nd
`Avenue, Suite 2000, Seattle, Washington 98101, for the Consumer Indirect
`Purchaser Plaintiffs.
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`Alec Blaine Finley, CUNEO GILBERT & LADUCA, LLP, 4725 Wisconsin Avenue
`N.W., Suite 200, Washington, District of Columbia 20016; Shawn M. Raiter,
`LARSON KING, LLP, 2800 Wells Fargo Place, 30 East Seventh Street, Saint
`Paul, Minnesota 55101; for the Commercial Indirect Plaintiffs.
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`Christa C. Cottrell and Christina Henk Briesacher, KIRKLAND & ELLIS LLP, 300
`North LaSalle Drive, Chicago, Illinois 60654, for Defendants Clemens Food
`Group, LLC and The Clemens Family Corporation.
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`Richard A. Duncan, FAEGRE DRINKER BIDDLE & REATH LLP, 90 South
`Seventh Street, Suite 2200, Minneapolis, Minnesota 55402, for Defendants
`Hormel Foods Corporation and Hormel Foods, LLC.
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`Jaime Stilson, DORSEY & WHITNEY LLP, 50 South Sixth Street, Suite 1500,
`Minneapolis, Minnesota 55402; Britt M. Miller, MAYER BROWN LLP, 71
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`CASE 0:19-cv-02723-JRT-HB Doc. 156 Filed 10/20/20 Page 2 of 87
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`South Wacker Drive, Chicago, Illinois 60606, for Defendant Indiana Packers
`Corporation.
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`Donald G. Heeman, SPENCER FANE LLP, 100 South Fifth Street, Suite 2500,
`Minneapolis, Minnesota 55402; Stephen R. Neuwirth, Sami H. Rashid,
`QUINN EMANUEL URQUHART & SULLIVAN LLP, 51 Madison Avenue, New
`York, New York 10010, for Defendant JBS USA Food Company.
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`William L. Greene and Peter J. Schwingler, STINSON LLP, 50 South Sixth
`Street, Suite 2600, Minneapolis, Minnesota 55402, for Defendants
`Seaboard Foods LLC and Seaboard Corporation.
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`Brian Edward Robison, GIBSON, DUNN & CRUTCHER, LLP, 2100 McKinney
`Avenue, Suite 1100, Dallas, Texas 75201; Richard G. Parker, GIBSON, DUNN
`& CRUTCHER, LLP, 1050 Connecticut Avenue, N.W. Washington, District of
`Columbia 20036, for Defendant Smithfield Foods, Inc.
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`Vollis Gene Summerlin Jr., HUSCH BLACKWELL LLP, 13330 California Street,
`Suite 200, Omaha, Nebraska 68154, for Defendant Triumph Foods, LLC.
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`Tiffany Rider Rohrbaugh, AXINN, VELTROP & HARKRIDER LLP, 950 F Street
`N.W., Washington, District of Columbia 20004, for Defendants Tyson Foods,
`Inc., Tyson Prepared Foods, Inc., and Tyson Fresh Meats, Inc.
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`William Leitzsey Monts III and Justin Bernick, HOGAN LOVELLS US LLP, 555
`Thirteenth Street N.W., Washington, District of Columbia 20004, for
`Defendant Agri Stats, Inc.
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`Three putative classes of Plaintiffs allege that Defendants, among America’s largest
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`pork producers and integrators, conspired to limit the supply of pork and thereby fix
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`prices in violation of federal and state antitrust laws. Defendants move to dismiss the
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`claims against them. Because Plaintiffs’ amended complaints adequately plead parallel
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`conduct, and because Plaintiffs adequately plead a continuing violation such that the
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`claims are not time barred, the Court will deny Defendants’ joint Motion to Dismiss.
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`CASE 0:19-cv-02723-JRT-HB Doc. 156 Filed 10/20/20 Page 3 of 87
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`However, because Plaintiffs fail to adequately plead participation in the parallel conduct
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`by Defendant Indiana Packers, the Court will grant Indiana Packers’ individual Motion to
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`Dismiss. In a related case brought by two individual businesses, the Court will deny
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`Defendants’ joint Motion to Dismiss and will grant Indiana Packers’ individual Motion to
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`Dismiss, for the same reasons.
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`Additionally, the Court will dismiss the following state-law claims brought by the
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`Indirect Plaintiff class: (1) the state antitrust claims arising before Rhode Island enacted
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`its Illinois Brick repealer and the claims from Mississippi; (2) the consumer-protection
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`claims from Massachusetts, Michigan, Minnesota, New Hampshire, New York, South
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`Dakota, Utah and Virginia; and (3) the unjust enrichment claims from Arizona, Florida,
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`North Dakota, and Utah.
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`Finally, the Court has determined that the Commonwealth of Puerto Rico has a
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`statutory grant of parens patriae standing. However, the Court concludes that the
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`Commonwealth has failed to adequately plead a claim for conspiracy to monopolize and
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`will therefore grant Defendants’ Motion to Dismiss the Commonwealth’s claim under P.R.
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`Laws Ann. tit. 10 § 260.
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`BACKGROUND
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`This case represents the consolidation of thirteen separately filed putative class
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`actions. There are three categories of class-action Plaintiffs who purchased, either
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`CASE 0:19-cv-02723-JRT-HB Doc. 156 Filed 10/20/20 Page 4 of 87
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`directly or indirectly, pork products from one of the Defendants1: Direct Purchaser
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`Plaintiffs (“DPPs”), Indirect Purchaser Plaintiffs (“IPPs”), and Commercial and Institutional
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`Indirect Purchaser Plaintiffs (“CIPs”). All three allege that Defendants engaged in a price-
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`fixing conspiracy to artificially constrict the supply of pork products in the domestic
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`market of the United States, a per se violation of § 1 of the Sherman Act, 15. U.S.C. § 1.
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`DPPs bring a claim for treble damages under § 4 of the Clayton Act, 15 U.S.C.
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`§ 15(a); IPPs and CIPs (together, the “Indirect Plaintiffs”) bring a claim for injunctive relief
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`under § 16 of the Clayton Act, 15 U.S.C. § 26.2 Indirect Plaintiffs also bring claims for
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`1 Agri Stats, Inc. (“Agri Stats”); Clemens Food Group, LLC and The Clemens Family
`Corporation (together and separately, “Clemens”); Hormel Foods Corporation and
`Hormel Foods, LLC (together and separately, “Hormel”); Indiana Packers Corporation
`(“Indiana Packers”); JBS USA Food Company (“JBS”); Seaboard Foods LLC and Seaboard
`Corporation (together and separately, “Seaboard”); Smithfield Foods, Inc. (“Smithfield”);
`Triumph Foods, LLC (“Triumph”); and Tyson Foods, Inc., Tyson Fresh Meats, Inc. and Tyson
`Prepared Foods, Inc. (together and separately, “Tyson”).
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`2 Concluding that allowing otherwise “would transform treble-damages actions into
`massive efforts to apportion the recovery among all potential plaintiffs that could have
`absorbed part of the overcharge,” the Supreme Court has held that only direct purchasers
`may sue for damages in Sherman Act price-fixing cases. Ill. Brick Co. v. Illinois, 431 U.S.
`720, 737 (1977). However, “the [Illinois Brick] direct-purchaser doctrine does not
`foreclose equitable relief.” U.S. Gypsum Co. v. Ind. Gas Co., 350 F.3d 623, 627 (7th Cir.
`2003).
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`CASE 0:19-cv-02723-JRT-HB Doc. 156 Filed 10/20/20 Page 5 of 87
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`damages under (1) the antitrust laws of 27 jurisdictions;3 (2) the consumer-protection
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`laws of 24 jurisdictions;4 and (3) the unjust-enrichment law of 32 jurisdictions.5
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`The Court first considered a joint Motion to Dismiss brought by Defendants against
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`the three class complaints last year. After concluding that “Plaintiffs ha[d] not adequately
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`pleaded parallel conduct, an essential element in showing that Defendants engaged in an
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`agreement to limit the supply of pork,” the Court granted the joint Motion without
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`prejudice and gave Plaintiffs 90 days to refile their amended complaints. In re Pork
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`Antitrust Cases, No. 18-1776, 2019 WL 3752497, at *9, 10 (D. Minn. Aug. 8, 2019).
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`Plaintiffs timely refiled their amended complaints,6 and Defendants now bring two joint
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`3 Arizona, California, the District of Columbia, Illinois, Iowa, Kansas, Maine, Michigan,
`Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Hampshire, New Mexico, New
`York, North Carolina, North Dakota, Oregon, Rhode Island, South Dakota, Tennessee,
`Utah, Vermont, Virginia, West Virginia, and Wisconsin.
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`4 Arkansas, California, the District of Columbia, Florida, Hawaii, Illinois, Massachusetts,
`Michigan, Minnesota, Nebraska, Nevada, New Hampshire, New Mexico, New York, North
`Carolina, North Dakota, Rhode Island, South Carolina, South Dakota, Utah, Vermont,
`Virginia, West Virginia, and Wisconsin
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`5 Arizona, Arkansas, California, the District of Columbia, Florida, Hawaii, Iowa, Kansas,
`Maine, Massachusetts, Maine, Michigan, Minnesota, Mississippi, Missouri, Nebraska,
`Nevada, New Hampshire, New Mexico, New York, North Carolina, North Dakota, Oregon,
`Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont, Virginia, West
`Virginia, and Wisconsin.
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`6 The DPP amended complaint can be found at Docket No. 431 (“DPP Compl.”); the CIP
`amended complaint can be found at Docket No. 432 (“CIP Compl.”); and the IPP amended
`complaint (“IPP Compl.”) can be found at Docket No. 392. Due to the nearly identical
`allegations in the three complaints, the Court will generally discuss them interchangeably
`unless it is necessary to do otherwise. Because of the length of and significant details
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`CASE 0:19-cv-02723-JRT-HB Doc. 156 Filed 10/20/20 Page 6 of 87
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`12(b)(6) motions—one for the federal claims in all three complaints and one for the state-
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`law claim in Indirect Plaintiffs’ Amended Complaints—as well as individual-defendant
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`Motions to Dismiss.
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`Two related cases have also been subsequently combined with this action: Winn-
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`Dixie Stores, Inc. et al. v. Agri Stats, Inc. et al. (“Winn-Dixie”), Civil No. 19-1578, and Puerto
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`Rico v. Agri Stats, Inc. et al, Civil No. 19-2723 (“Puerto Rico”). The former is brought by
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`two direct-purchaser grocery chains, Winn-Dixie and Bi-Lo; the latter is brought by the
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`Commonwealth of Puerto Rico on behalf of itself and as parens patriae on behalf of the
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`people of Puerto Rico.7
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`The Alleged Conspiracy
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`Together, the Defendants control over 80 percent of the wholesale pork
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`integration market. (DPP Compl. ¶ 1.) Plaintiffs allege that, from at least 2009 and
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`continuing to the present day, Defendants began to conspire to “fix, raise, maintain, and
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`stabilize the price of pork.” (Id. ¶ 2.) Plaintiffs allege that this was accomplished
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`within the Complaints, the Court will provide a general background here and discuss
`relevant facts in each analysis section.
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`7 The amended complaint in Winn-Dixie can be found at 19-cv-1578, Docket No. 94; the
`amended complaint in Puerto Rico can be found at 19-cv-2723, Docket No. 103. The
`Winn-Dixie complaint is nearly identical to the DPP class-action complaint; the Puerto Rico
`complaint is substantially similar to the three class-action complaints. The Court will
`generally discuss them all interchangeably unless it is necessary to do otherwise.
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`CASE 0:19-cv-02723-JRT-HB Doc. 156 Filed 10/20/20 Page 7 of 87
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`principally “by coordinating output and limiting production with the intent and expected
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`result of increasing pork prices in the United States.” (Id.)
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`Defendants were able to carry out this conspiracy in two ways. First, “Defendants
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`exchanged detailed, competitively sensitive, and closely guarded non-public information
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`about prices, capacity, sales volume, and demand through their co-conspirator,
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`Defendant Agri Stats.” (Id.) Agri Stats is a company that each of the Defendants worked
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`with; it gathered detailed financial information from the Defendants, which it then
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`standardized and made accessible to each Defendant. (Id. ¶ 3.) “Agri Stats collected the
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`pork integrators’ competitively sensitive supply and pricing data and intentionally shared
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`that information through detailed reports it provided to the pork integrators.” (Id.)
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`Through the “benchmarking” reports generated by Agri Stats, Defendants were able to
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`decipher which data belonged to which Defendant, thereby allowing them to monitor one
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`another’s pork production “and hence control supply and price[.]” (Id.) The Agri Stats
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`information was not publicly available. (Id. ¶ 4.)
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`Second, Plaintiffs allege that Defendants were able to carry out the conspiracy
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`through public statements, aimed at one another, regarding the need to cut production.
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`(Id. ¶ 5.) These statements served a signaling purpose and emphasized to one another
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`that solidarity existed. (Id.) Defendants then furthered the conspiracy by taking
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`individual action to cut supply or limit supply increases that would have otherwise
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`occurred in an unmanipulated market. (Id.)
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`Defendants’ conspiracy was successful, and as production either declined or
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`increased at a smaller rate than expected, pork prices increased. (Id. ¶ 7.) As a result,
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`Plaintiffs allege that they paid artificially inflated prices. (Id.)
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`I.
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`STANDARD OF REVIEW
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`DISCUSSION
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`When reviewing a motion to dismiss brought under Rule 12(b)(6), the Court
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`considers all facts alleged in the complaint as true to determine if the complaint states a
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`claim for “relief that is plausible on its face.” Braden v. Wal-Mart Stores, Inc., 588 F.3d
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`585, 594 (8th Cir. 2009) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). “A claim has
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`facial plausibility when the plaintiff pleads factual content that allows the court to draw
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`the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal,
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`556 U.S. at 678. Although the Court accepts the complaint’s factual allegations as true, it
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`is “not bound to accept as true a legal conclusion couched as a factual allegation.” Bell
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`Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).
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`Courts differ on how this generally permissive standard applies when reviewing
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`antitrust claims. The Supreme Court has explicitly noted that “in antitrust cases, where
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`the proof is largely in the hands of the alleged conspirators, dismissals prior to giving the
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`plaintiff ample opportunity for discovery should be granted very sparingly.” Hosp. Bldg.
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`Co. v. Trs. of Rex Hosp., 425 U.S. 738, 746 (1976) (cleaned up); accord Double D Spotting
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`Serv., Inc. v. Supervalu, Inc., 136 F.3d 554, 560 (8th Cir. 1998) (noting that “courts are
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`hesitant to dismiss antitrust actions before the parties have had an opportunity for
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`discovery, because the proof of illegal conduct lies largely in the hands of the alleged
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`antitrust conspirators”). However, the Supreme Court appeared to implicitly move away
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`from that standard in Twombly, which was itself a Sherman Act case. The Eighth Circuit
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`has also recently taken a jaundiced view of the “very-sparingly” standard articulated in
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`Hospital Building Co.:
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`Given the unusually high cost of discovery in antitrust cases,
`the
`limited success of
`judicial supervision
`in checking
`discovery abuse, and the threat that discovery expense will
`push cost-conscious defendants to settle even anemic cases[,]
`the federal courts have been reasonably aggressive in
`weeding out meritless antitrust claims at the pleading stage.
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`Insulate SB, Inc. v. Advanced Finishing Sys., Inc., 797 F.3d 538, 543 (8th Cir. 2015) (cleaned
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`up).
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`II.
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`THE SHERMAN ACT
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`Section 1 of the Sherman Act provides that “[e]very contract, combination in the
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`form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the
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`several States, or with foreign nations, is declared to be illegal.” 15 U.S.C. § 1. To establish
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`a claim under § 1 “a plaintiff must demonstrate ‘(1) that there was a contract,
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`combination, or conspiracy; (2) that the agreement unreasonably restrained trade under
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`either a per se rule of illegality or a rule of reason analysis; and (3) that the restraint
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`affected interstate commerce.’” Insignia Sys., Inc. v. News Am. Mktg. In-Store, Inc., 661 F.
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`Supp. 2d 1039, 1062 (D. Minn. 2009) (quoting Minn. Ass’n of Nurse Anesthetists v. Unity
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`CASE 0:19-cv-02723-JRT-HB Doc. 156 Filed 10/20/20 Page 10 of 87
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`Hosp., 5 F. Supp. 2d 694, 703 (D. Minn. 1998)). Because § 1 “does not prohibit all
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`unreasonable restraints of trade . . . but only restraints effected by a contract,
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`combination, or conspiracy, the crucial question
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`is whether the challenged
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`anticompetitive conduct stems from independent decisions or from an agreement, tacit
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`or express.” Twombly, 550 U.S. at 553 (cleaned up).
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`“Certain agreements, such as horizontal price fixing . . . are thought so inherently
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`anticompetitive that each is illegal per se without inquiry into the harm it has actually
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`caused.” Copperweld Corp. v. Indep. Tube Corp., 467 U.S. 752, 768 (1984). Thus, where—
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`as here—plaintiffs allege horizontal price fixing or agreements between competing
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`retailers to limit output in order to increase price, the only allegation that must be made
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`at the motion-to-dismiss stage is that defendants acted collectively or with concerted
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`action.
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`“[T]o satisfy the concerted action requirement, the plaintiff must demonstrate that
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`the defendants shared a unity of purpose or a common design and understanding, or a
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`meeting of the minds.” Insulate, 797 F.3d at 543 (quoting Impro Prods., Inc. v. Herrick,
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`715 F.2d 1267, 1273 (8th Cir. 1983)). This may be demonstrated through the presentation
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`of circumstantial evidence, including through a showing of parallel conduct among
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`defendants that demonstrates that their similar behavior “would probably not result from
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`chance, coincidence,
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`independent
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`responses
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`to common stimuli, or mere
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`interdependence unaided by an advance understanding among the parties.” Twombly,
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`550 U.S at 557, n.4 (cleaned up).
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`The Eighth Circuit has adopted a rule that, in addition to parallel conduct, to survive
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`a motion to dismiss, antitrust plaintiffs must also plead “factual enhancement,” often
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`referred to as “plus factors.” See, e.g., Blomkest Fertilizer, Inc. v. Potash Corp. of Sask.,
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`203 F.3d 1028, 1033 (8th Cir. 2000) (en banc) (“An agreement is properly inferred from
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`conscious parallelism only when certain ‘plus factors’ exist.”). These plus factors might
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`include (1) a shared motive to conspire; (2) action against self-interest; (3) market
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`concentration; and (4) a substantial amount of interfirm communication in conjunction
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`with the parallel conduct. See, e.g., In re Musical Instruments & Equip. Antitrust Litig.,
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`798 F.3d 1186, 1194–95 (9th Cir. 2015).
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`Thus, in order to survive a defendant’s 12(b)(6) motion, plaintiffs alleging a price-
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`fixing conspiracy must plausibly allege both parallel conduct and at least one plus factor.
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`A.
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`Parallel Conduct
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`Because the Court dismissed the Complaints on the ground that Plaintiffs had not
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`adequately pleaded parallel conduct, the critical question is whether the Amended
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`Complaints sufficiently allege “how any of the individual Defendants acted” so that the
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`Court can “analyze which, how many, or when any of the individual Defendants may have
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`affirmatively acted to reduce the supply of pork.” In re Pork, 2019 WL 3752497, at *8.
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`The DPP Complaint contains new, specific allegations related to each Defendant at
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`¶¶ 124–32:
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`1. Smithfield
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`Plaintiffs allege that Smithfield first indicated that it was “reducing the number of
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`pigs that come off sow farms” in 2008. (DPP Compl. ¶ 124.) In 2009, Smithfield
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`announced that it had reduced the size of its domestic supply by “two million market hogs
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`annually” and that it was immediately further reducing its herd by 3%. (Id.) Smithfield
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`followed this with a 5% reduction in 2010, and a further (unspecified) downsize in 2011.
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`(Id.) Although Plaintiffs allege that Smithfield also increased the share of its production
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`directed to exports, they fail to provide specifics beyond the opening of a plant in China
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`in 2015. (Id. ¶ 125.)
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`2. Tyson
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`Tyson cut its sows by over 25% between 2008 and 2009. (Id. ¶ 126.) Plaintiffs also
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`allege that in 2010 and 2013 Tyson reported decreased sales volume of 3.3% and 3.6%,
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`combined with unspecified decreases in its “capacity utilization rate.” (Id.)
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`3. JBS
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`Between 2009 and 2011, JBS increased its pork export volume from 15% to 20% of
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`its total production. (Id. ¶ 127.) In 2015, JBS acquired Cargill’s pork business, combining
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`the third- and fourth-largest pork producers into the second-largest producer. (Id. ¶¶ 85–
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`86.) In 2016, Plaintiffs allege that JBS undertook an unspecified reduction in the number
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`of sows it produced “despite increased consumer demand.” (Id. ¶ 127.) JBS subsequently
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`reported that “pork prices were 18% higher year on year at the end of 2016, on the back
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`of increased demand and output restrictions.” (Id.)
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`4. Hormel
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`Plaintiffs allege that “Hormel’s production statistics show that it cut its number of
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`sows in 2008,” though they do not provide specifics, and that Hormel “maintained such
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`reduced production throughout the class period.” (Id. ¶ 128.) They also allege that
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`Hormel reported unspecified “tonnage reductions for its pork operations in its 2009
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`Annual Report.” (Id.) The only specific reduction alleged is that “Hormel reduced its
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`capacity at its Los Angeles plant by 500 head per day” in 2014. (Id.)
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`5. Seaboard
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`The DPP Complaint contains no specific allegations of reduced production against
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`Seaboard, only that it “reduced supply in 2013.” (Id. ¶ 129.) Seaboard increased its
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`export sales in 2010 and 2011 by “23%[,] to an all-time record . . . .” (Id. ¶ 129 n.49.)
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`6. Triumph
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`A farm member of Triumph announced it was reducing its herd by 11,000 sows in
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`September 2008. (Id. ¶ 130.) In 2009, Triumph further reduced its herd by 6% (24,500
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`sows). (Id.) Plaintiffs allege that “Triumph focused its production on exports” but do not
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`provide specifics. (Id.)
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`7. Clemens
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`A Clemens subsidiary reported a decrease in production of 1000 sows in 2011. (Id.
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`¶ 131.)
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`8. Indiana Packers
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`Plaintiffs allege that Indiana Packers “indicated that it expected to reduce”
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`production in 2012 but provide no specifics. (Id. ¶ 132.)
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`The most specific allegations of herd-size reductions are against Smithfield, Tyson,
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`and Triumph. Those reductions all took place in 2008 and 2009, with Smithfield
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`continuing alone in 2010. There are smaller specific allegations of a herd reduction in
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`2011 (1000 sows, by a Clemens subsidiary) and production decreases in 2014 (500 head
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`per day, by Hormel at its plant in Los Angeles). There are direct allegations of herd
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`reduction—without specifics—against Hormel (2008/2009), Smithfield (2010), Seaboard
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`(2013), and JBS (2016); there are unspecific allegations of decreased capacity utilization
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`against Tyson in 2010 and 2013. There are specific allegations of increased exports
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`against JBS (5% increase, 2009–2011) and Seaboard (23% increase, 2009–2011); there are
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`unspecified allegations of export increases against Smithfield and Triumph. There are no
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`specific allegations against Indiana Packers.
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`The Court concludes that these allegations, when viewed as a whole, are sufficient
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`to plausibly plead parallel conduct against all Defendants, except Indiana Packers. The
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`new allegations give individualized content to what the original pleading showed: after
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`nearly a decade of sustained growth, pork supply decreased. The initial decrease comes
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`from three specific sources—sizeable reductions by Smithfield, Tyson, and Triumph, the
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`first, second, and sixth largest producers. (See DPP Compl. ¶¶ 85–86, 88, fig.4.) This
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`comports with the industry picture as a whole.
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`Figure 7: U.S. Annual Commercial Hog Production by Weight, 2000–20178
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`In the same way, the specific allegations of increased exports between 2009–2011 fit the
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`industry as a whole.
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`Figure 8: U.S. Pork Exports as a Percent of Total Production, 2000–20179
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`These two patterns, plausibly caused by the alleged actions of the Defendants, then
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`allowed for a massively atypical jump in the price of pork.
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`8 DPP Compl. ¶ 120, fig. 7.
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`9 DPP Compl. ¶ 122, fig. 8.
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`Figure 9: Average Hog Wholesale Prices in Cents per lb., 2000–201810
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`Given the inherent difficulty of obtaining solid information of an antitrust conspiracy—
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`especially one involving sophisticated commercial entities—the evidence that Plaintiffs
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`have marshalled is sufficient to survive the relatively low bar of the pleading stage.11
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`The Plaintiffs have alleged parallel conduct among the Defendants sufficient to
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`survive a motion to dismiss.12
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`10 DPP Compl. ¶ 165, fig. 9.
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`
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`11 Indeed, even the individual-defendant allegations that lack numerical specificity are
`enough to overcome a 12(b)(6) motion; “Plaintiffs ‘need not provide specific facts in
`support of their allegations.’ Rather, they need only provide ‘sufficient factual
`information to provide the “grounds” on which the claim rests[.]” In re Pre-Filled Propane
`Tank Antitrust Litig. (“Propane I”), 860 F.3d 1059, 1070 (8th Cir. 2017) (en banc) (quoting
`Schaaf v. Residential Funding Corp., 517 F.3d 544, 549 (8th Cir. 2008)).
`
`12 Defendants argue that the alleged reductions in supply are not “proximate in time and
`value,” a standard quoted in a see-also parenthetical of the Court’s August Order. In re
`Pork, 2019 WL 3752497, at *8 (quoting In re Generic Pharm Pricing Antitrust Litig.,
`388 F. Supp. 3d 404, 441 (E.D. Pa. 2018)). However, the Supreme Court noted more than
`80 years ago that “simultaneous action is not a requirement to demonstrate parallel
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`B.
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`Statute of Limitations
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`Defendants next argue that the complaints are barred by the statute of limitations.
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`Because the statute of limitations is “typically an affirmative defense” and a defendant
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`“does not render a complaint defective by pleading an affirmative defense,” an argument
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`by a defendant that a claim is time barred “is not ordinarily a ground for Rule 12(b)(6)
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`dismissal unless the complaint itself establishes the defense.” Jessie v. Potter, 516 F.3d
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`709, 713 n.2 (8th Cir. 2008).
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`Section 4b of the Clayton Act states that any claim for damages under § 4 “shall be
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`forever barred unless commenced within four years after the cause of action accrued.”13
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`conduct.” In re Broiler Chicken, 290 F. Supp. 3d 772, 791 (N.D. Ill. 2017) (citing Interstate
`Circuit v. United States, 306 U.S. 208, 227 (1939).
`
`Although the Eighth Circuit affirmed the dismissal of a Sherman Act claim for failure to
`plead parallel conduct where defendants’ actions were separated by six months, the
`termination of the plaintiff from the pharmacy benefit networks of CVS and Express
`Scripts was also the “only allegation that hints at parallel conduct” in that case and the
`panel specifically noted that it was not establishing a bright-line rule. Park Irmat Drug
`Corp. v. Express Scripts Holding Co., 911 F.3d 505, 514–16 (8th Cir. 2018). This case, where
`Plaintiffs allege that Defendants took several specific actions under very similar
`circumstances, is distinguishable.
`
`13 Claims for injunctive relief under § 16 of the Clayton Act are not subject to the four-
`year time bar under § 4b. See 15 U.S.C. § 15b (stating that the statute of limitations
`applies only to “any cause of action under section 15, 15a, or 15c of this title” and not to
`15 U.S.C. § 26); see also Midwestern Machinery Co., Inc. v. Northwest Airlines, Inc., 392
`F.3d 265, 276–77 (8th Cir. 2004) (analyzing a Clayton Act damages claim under the four-
`year time bar and a Clayton Act injunctive-relief claim under the equitable doctrine of
`laches).
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`CASE 0:19-cv-02723-JRT-HB Doc. 156 Filed 10/20/20 Page 18 of 87
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`15 U.S.C. § 15b. The cause of action accrues from “the date on which the wrongdoer
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`commits an act that injures the business of another.” Varner v. Peterson Farms, 371 F.3d
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`1011, 1019 (8th Cir. 2004).
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`Regarding the § 4 treble-damages claims brought by the DPPs, both sides
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`acknowledge that because the DPP Complaint alleges that the antitrust conspiracy started
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`in at least 2009, the statute of limitations has run unless exceptions apply. DPPs argue
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`that two exceptions apply: they have alleged a continuing violation, or, in the alternative,
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`the statute of limitations should be equitably tolled due to the Defendants’ fraudulent
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`concealment of the conspiracy.
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`1. Fraudulent Concealment
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`To invoke fraudulent concealment, Plaintiffs must allege facts showing: “(1)
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`Defendants’ concealment of Plaintiffs’ cause of action, (2) failure by Plaintiffs to discover
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`the existence of their cause of action, and (3) due diligence by Plaintiffs in attempting to
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`discover the claim.” In re Milk Prod. Antitrust Litig., 84 F. Supp. 2d 1016, 1022 (D. Minn.
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`1997), aff'd, 195 F.3d 430 (8th Cir. 1999). To adequately allege fraudulent concealment,
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`Plaintiffs must meet Rule 9(b)’s heightened pleading standard, such that Plaintiffs must
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`plead “the who, what, when, where, and how.” Summerhill v. Terminix, Inc., 637 F.3d
`
`
`Defendants do not argue that laches should bar Plaintiffs’ Clayton Act claims for injunctive
`relief. Therefore, Plaintiffs’ claims for injunctive relief under 15 U.S.C. § 26 survives,
`regardless of whether their damage claims under 15 U.S.C. § 15 are time barred
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`
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`877, 880 (8th Cir. 2011); In re Milk, 84 F. Supp. 2d at 1022 (discussing the application of
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`Rule 9(b)).
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`a. Defendant’s concealment of Plaintiffs’ cause of action
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`Plaintiffs argue that they have adequately pleaded the first element of fraudulent
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`concealment because (1) the conspiracy was “self-concealing” and (2) even if not self-
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`concealing, they have otherwise pleaded the concealment.
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`The self-concealing doctrine essentially posits that a conspiracy may itself suffice
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`to show fraudulent concealment where the conspiracy would not have been effective if
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`it had been disclosed. Thus, the fact that the conspiracy was carried out at all may prove
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`fraudulent concealment for tolling purposes. In re Monosodium Glutamate Antitrust
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`Litig., No. CIV. 00MDL1328PAM, 2003 WL 297287, at *2 (D. Minn. Feb. 6, 2003)
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`(explaining that the self-concealing doctrine “allows a plaintiff to proceed with a
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`fraudulent concealment claim merely on proof of a self-concealing antitrust violation.”)
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`The Eighth Circuit has not decided whether the self-concealing doctrine applies in
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`cases such as this, but the Court concludes that it does not. Nearly every circuit to
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`consider the question has held that, for tolling purposes, defendants must have in some
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`way acted to conceal their conspiracy. See, e.g., In re Scrap Metal Antitrust Litig., 527 F.3d
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`517, 538 (6th Cir. 2008); see also In re Fasteners Antitrust Litig., Civil No. 08-md-1912,
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`2011 WL 3563989, at *3 (E.D. Pa. Aug. 12, 2011) (collecting cases and noting only the
`
`Second Circuit has adopted the self-concealing doctrine). To hold that fraudulent
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`CASE 0:19-cv-02723-JRT-HB Doc. 156 Filed 10/20/20 Page 20 of 87
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`concealment can be met by claiming a conspiracy is self-concealing would mean allowing
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`fraudulent concealment to apply to nearly every conspiracy. Likewise, even if the Court
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`were to accept the self-concealing doctrine, it seems illogical to apply it to a case like this,
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`where the Plaintiffs made public statements an essential part of their conspiracy
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`allegations.
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`Of course, the Plaintiffs also argue that Defendants did indeed take affirmative
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`actions to fraudulently conceal their antitrust violations. In the complaints, Plain