CASE 0:20-cv-01319-JRT-HB Doc. 168 Filed 02/18/21 Page 1 of 75
`
`UNITED STATES DISTRICT COURT
`DISTRICT OF MINNESOTA
`
`IN RE CATTLE ANTITRUST
`LITIGATION
`
`This document relates to:
`
`ALL CASES
`
`Case No. 0:19-cv-1222-JRT-HB
`
`PETERSON, et al.,
`
`Case No. 0:19-cv-1129-JRT-HB
`
`v.
`
`JBS S.A., et al.,
`
`Plaintiffs,
`
`Defendants.
`
`IN RE DPP BEEF LITIGATION
`
`Case No. 0:20-cv-1319-JRT-HB
`
`This document relates to:
`
`ALL CASES
`
`ERBERT & GERBERT’S, INC.,
`Plaintiff,
`
`v.
`
`CARGILL, INC., et al.,
`
`Defendants.
`
`Case No. 0:20-cv-1414-JRT-HB
`
`MEMORANDUM OF LAW IN SUPPORT OF DEFENDANTS’
`JOINT MOTION TO DISMISS THE FEDERAL CLAIMS
`
`(REDACTED)
`
`

`

`CASE 0:20-cv-01319-JRT-HB Doc. 168 Filed 02/18/21 Page 2 of 75
`
`
`
`TABLE OF CONTENTS
`
`2.
`
`INTRODUCTION ............................................................................................................... 1
`LEGAL STANDARD ......................................................................................................... 4
`ARGUMENT ....................................................................................................................... 5
`I.
`PLAINTIFFS FAIL TO PLEAD A VIOLATION OF THE SHERMAN ACT ......... 5
`A. Plaintiffs’ Witness Allegations Do Not Provide Direct Evidence Of A
`Conspiracy .......................................................................................................... 6
`1. Witness 1’s allegations do not support a conspiracy .................................. 6
`a. Neither Witness 1 nor his source was in a position to know
`about the alleged agreement ............................................................... 7
`b. Even if credited, Witness 1’s allegations do not substantiate
`the claim of a conspiracy ................................................................. 11
`2. Witness 2 offers no direct evidence of a conspiracy ................................ 14
`B. Plaintiffs Fail To Plead Parallel Conduct Supporting The Inference Of A
`Conspiracy ........................................................................................................ 15
`1.
`Plaintiffs fail to plead that Defendants engaged in parallel
`slaughter reductions .................................................................................. 17
`a.
`Plaintiffs’ estimates of Defendants’ quarterly slaughter
`volumes do not support their alleged conspiracy ............................. 17
`b. Plaintiffs’ other Defendant-specific slaughter volume
`allegations do not support the alleged conspiracy ........................... 22
`c. Reducing slaughter volumes when prices are high is rational
`economic behavior ........................................................................... 25
`Plaintiffs fail to plead that Defendants agreed to curtail cash cattle
`purchases .................................................................................................. 26
`Plaintiffs fail to plead that Defendants coordinated how they
`bought cash cattle ..................................................................................... 29
`Plaintiffs fail to plead that Defendants manipulated cattle imports ......... 33
`Plaintiffs fail to plead that Defendants closed plants as part of the
`conspiracy ................................................................................................. 35
`C. Plaintiffs Fail To Plead Other Facts Supporting The Inference Of A
`Conspiracy ........................................................................................................ 37
`1.
`Plaintiffs have not alleged sufficient plus factors ..................................... 37
`2.
`Plaintiffs’ regression model does not show a conspiracy ......................... 44
`3. The complaints explain why fed cattle prices lawfully fell ...................... 46
`
`3.
`
`4.
`5.
`
`i
`
`

`

`CASE 0:20-cv-01319-JRT-HB Doc. 168 Filed 02/18/21 Page 3 of 75
`
`TABLE OF CONTENTS
`(continued)
`
`D. Purchaser Plaintiffs Fail To Allege An Injury In Fact That Confers
`Standing To Sue ................................................................................................ 48
`E. R-CALF And NFU Lack Standing To Seek Money Damages ......................... 49
`II. PLAINTIFFS FAIL TO PLEAD A VIOLATION OF THE PACKERS AND
`STOCKYARDS ACT ............................................................................................... 50
`III. PLAINTIFFS FAIL TO PLEAD A VIOLATION OF THE COMMODITY
`EXCHANGE ACT .................................................................................................... 52
`A. Plaintiffs’ CEA Claims Are Derivative Of Their Sherman Act Claims ........... 52
`B. Plaintiffs Fail To Plead The Elements Of A CEA Claim ................................. 53
`C. Plaintiffs’ Secondary Liability Claims Fail Because They Fail To Allege
`A Primary Liability Claim ................................................................................ 55
`IV. PLAINTIFFS’ CLAIMS ARE TIME-BARRED ...................................................... 55
`A. Plaintiffs Do Not Plead Fraudulent Concealment............................................. 56
`1.
`Plaintiffs do not allege that Defendants concealed the supposed
`conspiracy. ................................................................................................ 57
`Plaintiffs do not allege that they failed to discover the alleged
`conspiracy ................................................................................................. 58
`Plaintiffs do not plead diligence ............................................................... 59
`3.
`B. The Continuing-Violation Doctrine Does Not Permit Plaintiffs To
`Recover Damages For Acts Outside The Limitations Period ........................... 61
`CONCLUSION ................................................................................................................. 62
`
`
`2.
`
`
`
`ii
`
`

`

`CASE 0:20-cv-01319-JRT-HB Doc. 168 Filed 02/18/21 Page 4 of 75
`
`
`
`Cases
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`Ashcroft v. Iqbal,
`556 U.S. 662 (2009) ............................................................................................. 4, 5, 37
`
`Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters,
`459 U.S. 519 (1983) ..................................................................................................... 50
`
`Bell Atl. Corp v. Twombly,
`550 U.S. 544 (2007) .............................................................................................. passim
`
`Blomkest Fertilizer, Inc. v. Potash Corp. of Sask.,
`203 F.3d 1028 (8th Cir. 2000) ......................................................................... 30, 35, 42
`
`Brown v. Medtronic, Inc.,
`628 F.3d 451 (8th Cir. 2010) ......................................................................................... 5
`
`In re Canadian Imp. Antitrust Litig.,
`470 F.3d 785 (8th Cir. 2006) ................................................................................. 48, 49
`
`In re Cattle Antitrust Litig.,
`No. 19-cv-1222, 2020 WL 5884676 (D. Minn. Sept. 29, 2020) ........................... passim
`
`CFTC v. M25 Invs., Inc.,
`No. 09-cv-1831, 2010 WL 769367 (N.D. Tex. Mar. 6, 2010) ..................................... 54
`
`In re Chi. Bd. Options Exch. Volatility Index Manipulation Antitrust Litig.,
`390 F. Supp. 3d 916 (N.D. Ill. 2019) ........................................................................... 55
`
`In re Chocolate Confectionary Antitrust Litig.,
`801 F.3d 383 (3d Cir. 2015) ..................................................................................... 8, 43
`
`In re Citric Acid Litig.,
`191 F.3d 1090 (9th Cir. 1999) ..................................................................................... 40
`
`In re Dairy Farmers of Am., Inc. Cheese Antitrust Litig.,
`801 F.3d 758 (7th Cir. 2015) ....................................................................................... 53
`
`E.L. by White v. Voluntary Interdistrict Choice Corp.,
`864 F.3d 932 (8th Cir. 2017) ....................................................................................... 48
`
`In re Elevator Antitrust Litig.,
`502 F.3d 47 (2d Cir. 2007) ........................................................................................... 43
`
`iii
`
`

`

`CASE 0:20-cv-01319-JRT-HB Doc. 168 Filed 02/18/21 Page 5 of 75
`
`TABLE OF AUTHORITIES
`(continued)
`
`
`Cases (continued)
`
`Page(s)
`
`In re EpiPen Direct Purchaser Litig.,
`No. 20-cv-0827, 2021 WL 147166 (D. Minn. Jan. 15, 2021) ..................................... 61
`
`Erie Cty. v. Morton Salt, Inc.,
`702 F.3d 860 (6th Cir. 2012) ................................................................................. 39, 40
`
`Five Smiths, Inc. v. Nat’l Football League Players Ass’n,
`788 F. Supp. 1042 (D. Minn. 1992) ............................................................................. 41
`
`In re Flat Glass Antitrust Litig.,
`191 F.R.D. 472 (W.D. Pa. 1999) ................................................................................. 60
`
`In re Graphics Processing Units Antitrust Litig.,
`527 F. Supp. 2d 1011 (N.D. Cal. 2007) ....................................................................... 42
`
`Griffin v. Smithfield Foods, Inc.,
`183 F. Supp. 2d 824 (E.D. Va. 2002) .......................................................................... 51
`
`In re GSE Bonds Antitrust Litigation,
`396 F. Supp. 3d 354 (S.D.N.Y. 2019) ................................................................... passim
`
`Harry v. Total Gas & Power N. Am., Inc.,
`889 F.3d 104 (2d Cir. 2018) ......................................................................................... 53
`
`Hinds Cty., Miss. v. Wachovia Bank N.A.,
`620 F. Supp. 2d 499 (S.D.N.Y. 2009) .......................................................................... 42
`
`Hinds Cty., Miss. v. Wachovia Bank N.A.,
`700 F. Supp. 2d 378 (S.D.N.Y. 2010) .................................................................. 7, 8, 10
`
`Holiday Wholesale Grocery Co. v. Philip Morris, Inc.,
`231 F. Supp. 2d 1253 (N.D. Ga. 2002) ........................................................................ 44
`
`IBP, Inc. v. Glickman,
`187 F.3d 974 (8th Cir. 1999) ................................................................................. 30, 51
`
`In re Ins. Brokerage Antitrust Litig.,
`618 F.3d 300 (3rd Cir. 2010) ........................................................................... 11, 38, 39
`
`Insulate SB, Inc. v. Advanced Finishing Sys., Inc.,
`797 F.3d 538 (8th Cir. 2015) ......................................................................................... 5
`
`iv
`
`

`

`CASE 0:20-cv-01319-JRT-HB Doc. 168 Filed 02/18/21 Page 6 of 75
`
`TABLE OF AUTHORITIES
`(continued)
`
`
`Cases (continued)
`
`Page(s)
`
`Insulate SB, Inc. v. Advanced Finishing Sys., Inc.,
`No. 13-cv-2664, 2014 WL 943224 (D. Minn. Mar. 11, 2014) .................................... 60
`
`InterVest, Inc. v. Bloomberg, L.P.,
`340 F.3d 144 (3d Cir. 2003) ......................................................................................... 14
`
`Jackson v. Swift Eckrich, Inc.,
`53 F.3d 1452 (8th Cir. 1995) ................................................................................. 51, 56
`
`Kelsey K. v. NFL Enters., LLC,
`254 F. Supp. 3d 1140 (N.D. Cal. 2017) ....................................................................... 21
`
`Kleen Prods. LLC v. Georgia-Pacific LLC,
`910 F.3d 927 (7th Cir. 2018) ....................................................................................... 26
`
`Klehr v. A.O. Smith Corp.,
`521 U.S. 179 (1997) ..................................................................................................... 61
`
`LaFlamme v. Societe Air France,
`702 F. Supp. 2d 136 (E.D.N.Y. 2010) ......................................................................... 21
`
`Levy v. BASF Metals Ltd.,
`917 F.3d 106 (2d Cir. 2019) ......................................................................................... 56
`
`In re LIBOR-Based Fin. Instruments Antitrust Litig.,
`935 F. Supp. 2d 666 (S.D.N.Y. 2013) .......................................................................... 55
`
`LLM Bar Exam, LLC v. Barbri, Inc.,
`271 F. Supp. 3d 547 (S.D.N.Y. 2017) .......................................................................... 36
`
`Lovett v. Gen. Motors Corp.,
`975 F.2d 518 (8th Cir. 1992) ....................................................................................... 50
`
`In re LTL Shipping Servs. Antitrust Litig.,
`No. 08-md-01895, 2009 WL 323219 (N.D. Ga. Jan. 28, 2009) .................................. 39
`
`In re McCormick & Co.,
`217 F. Supp. 3d 124 (D.D.C. 2016) ............................................................................. 25
`
`McDonald v. Johnson & Johnson,
`722 F.2d 1370 (8th Cir. 1983) ..................................................................................... 49
`
`v
`
`

`

`CASE 0:20-cv-01319-JRT-HB Doc. 168 Filed 02/18/21 Page 7 of 75
`
`TABLE OF AUTHORITIES
`(continued)
`
`
`Cases (continued)
`
`Page(s)
`
`McDonough v. Anoka Cty.,
`799 F.3d 931 (8th Cir. 2015) ......................................................................................... 5
`
`Midwest Commc’ns, Inc. v. Minn. Twins, Inc.,
`779 F.2d 444 (8th Cir. 1985) ....................................................................................... 49
`
`In re Milk Prods. Antitrust Litig.,
`84 F. Supp. 2d 1016 (D. Minn. 1997) .................................................................... 56, 60
`
`In re Musical Instruments & Equip. Antitrust Litig.,
`798 F.3d 1186 (9th Cir. 2015) ........................................................................... 6, 22, 37
`
`Nat’l Farmers’ Org., Inc. v. Associated Milk Prods., Inc.,
`850 F.2d 1286 (8th Cir. 1988) ..................................................................................... 48
`
`Org. for Competitive Mkts. v. U.S. Dep’t of Agric.,
`912 F.3d 455 (8th Cir. 2018) ....................................................................................... 51
`
`Park Irmat Drug Corp. v. Express Scripts Holding Co.,
`911 F.3d 505 (8th Cir. 2018) ....................................................................................... 36
`
`Pickett v. Tyson Fresh Meats, Inc.,
`420 F.3d 1272 (11th Cir. 2005) ................................................................................... 28
`
`In re Platinum & Palladium Commodities Litig.,
`828 F. Supp. 2d 588 (S.D.N.Y. 2011) .......................................................................... 52
`
`Pocahontas Supreme Coal Co. v. Bethlehem Steel Corp.,
`828 F.2d 211 (4th Cir. 1987) ....................................................................................... 58
`
`In re Pork Antitrust Litig.,
`No. 18-cv-1776, 2019 WL 3752497 (D. Minn. Aug. 8, 2019) ............................. passim
`
`In re Pork Antitrust Litig.,
`No. 18-cv-1776, 2020 WL 6149666 (D. Minn. Oct. 20, 2020) ................................... 57
`
`In re Pre-Filled Propane Tank Antitrust Litig.,
`860 F.3d 1059 (8th Cir. 2017) ..................................................................................... 61
`
`In re Pre-Filled Propane Tank Antitrust Litig.,
`893 F.3d 1047 (8th Cir. 2018) ........................................................................... 4, 12, 27
`
`vi
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`

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`CASE 0:20-cv-01319-JRT-HB Doc. 168 Filed 02/18/21 Page 8 of 75
`
`TABLE OF AUTHORITIES
`(continued)
`
`
`Cases (continued)
`
`Page(s)
`
`Prosterman v. Am. Airlines, Inc.,
`747 F. App’x 458 (9th Cir. 2018) ................................................................................ 39
`
`In re Refrigerant Compressors Antitrust Litig.,
`92 F. Supp. 3d 652 (E.D. Mich. 2015) ......................................................................... 60
`
`In re Scrap Metal Antitrust Litig.,
`527 F.3d 517 (6th Cir. 2008) ....................................................................................... 57
`
`Sonterra Capital Master Fund, Ltd. v. Barclays Bank PLC,
`366 F. Supp. 3d 516 (S.D.N.Y. 2018) .......................................................................... 55
`
`Sonterra Capital Master Fund Ltd. v. Credit Suisse Grp. AG,
`277 F. Supp. 3d 521 (S.D.N.Y. 2017) .......................................................................... 53
`
`Stahl v. U.S. Dep’t of Agric.,
`327 F.3d 697 (8th Cir. 2003) ......................................................................................... 5
`
`Summerhill v. Terminix, Inc.,
`637 F.3d 877 (8th Cir. 2011) ....................................................................................... 57
`
`Sw. Suburban Bd. of Realtors, Inc. v. Beverly Area Planning Ass’n,
`830 F.2d 1374 (7th Cir. 1987) ..................................................................................... 50
`
`Tatum v. Legg Mason Wood Walker, Inc.,
`83 F.3d 121 (5th Cir. 1996) ......................................................................................... 55
`
`In re Text Messaging Antitrust Litig.,
`782 F.3d 867 (7th Cir. 2015) ....................................................................................... 14
`
`In re Tyson Foods, Inc. Sec. Litig.,
`275 F. Supp. 3d 970 (W.D. Ark. 2017) ........................................................................ 38
`
`United States v. Apple, Inc.,
`791 F.3d 290 (2d Cir. 2015) ......................................................................................... 11
`
`Wash. Cty. Health Care Auth, Inc. v. Baxter Int’l Inc.,
`328 F. Supp. 3d 824 (N.D. Ill. 2018) ........................................................................... 21
`
`White v. R.M. Packer Co.,
`635 F.3d 571 (1st Cir. 2011) ........................................................................................ 40
`
`vii
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`

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`CASE 0:20-cv-01319-JRT-HB Doc. 168 Filed 02/18/21 Page 9 of 75
`
`TABLE OF AUTHORITIES
`(continued)
`
`
`Cases (continued)
`
`Page(s)
`
`Zenith Radio Corp. v. Hazeltine Research, Inc.,
`401 U.S. 321 (1971) ..................................................................................................... 56
`
`In re Zinc Antitrust Litig.,
`155 F. Supp. 3d 337 (S.D.N.Y. 2016) .......................................................................... 32
`
`Statutes and Rules
`
`Commodity Exchange Act, 7 U.S.C. § 1 et seq. ........................................................ passim
`
`
`
`
`
`7 U.S.C. § 25(a)(1) ....................................................................................................... 53
`
`7 U.S.C. § 25(c) ........................................................................................................... 56
`
`7 U.S.C. § 1638 ................................................................................................................. 34
`
`Packers and Stockyards Act, 7 U.S.C. § 181 et seq. .................................................. passim
`
`Sherman Act, 15 U.S.C. § 1 et seq. ............................................................................ passim
`
`
`
`15 U.S.C. § 15b ............................................................................................................ 56
`
`Consolidated Appropriations Act of 2016, Pub. L. No. 114-113, § 759,
`129 Stat. 2242 (2015) ................................................................................................... 34
`
`Fed. R. Civ. P. 9(b) ............................................................................................................ 57
`
`Fed. R. Civ. P. 12(b)(6) ....................................................................................................... 4
`
`Other Authorities
`
`Ltr. from Bill Bullard, CEO, R-CALF, to Sen. Charles E. Grassley, Chairman of
`the Sen. Comm. on the Jud. (Jan. 5, 2016) ............................................................ 59, 60
`
`Cattle Buyers Weekly, “Top 30 Beef Packers” Annual Reports, 2008-2019 ................... 23
`
`Consol. Beef Producers, Who We Are (last accessed Feb. 17, 2021) ................................ 59
`
`Food Indus. Ass’n, 2017 Annual Meat Conference: Registered Attendees (last
`accessed Feb. 17, 2021) ............................................................................................... 41
`
`viii
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`CASE 0:20-cv-01319-JRT-HB Doc. 168 Filed 02/18/21 Page 10 of 75
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`TABLE OF AUTHORITIES
`(continued)
`
`
`Other Authorities (continued)
`
`Page(s)
`
`Kansas State Univ., Inaugural AgCon Brings Business, Government Together to
`Discuss Ag Futures Market (Mar. 8, 2018) ................................................................. 41
`
`David J. Lynch, “America First” May Be Last Hope for These Cattle Ranchers,
`Wash. Post (May 3, 2019) ............................................................................................ 34
`
`Nat’l Cattlemen’s Beef Ass’n, NCBA Allied Industry Membership (2019) ...................... 41
`
`N. Am. Meat Inst., About Us: Board of Directors (last accessed Feb. 17, 2021) ............. 41
`
`Glynn Tonsor, et al., Assessing Beef Demand Determinants (Jan. 18, 2018) ................... 21
`
`U.S. Gov’t Accountability Off., GAO-18-296, U.S. Department of Agriculture:
`Additional Data Analysis Could Enhance Monitoring of U.S. Cattle Market
`(Apr. 2018) ............................................................................................................. 42, 47
`
`U.S. Dep’t of Agric., Boxed Beef & Fed Cattle Price Spread Investigation Report
`(July 22, 2020) ............................................................................................................. 42
`
`USDA Econ. Research Serv., Historical Monthly Price Spread Data for Beef,
`Pork, Broilers (Feb. 28, 2019) ..................................................................................... 46
`
`USDA Econ. Research Serv., Livestock Prices (Oct. 28, 2019) ....................................... 46
`
`USDA Econ., Stats., & Mkt. Info. Sys., Actual Slaughter Under Federal
`Inspection (Jan. 14, 2021) ............................................................................................ 18
`
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`CASE 0:20-cv-01319-JRT-HB Doc. 168 Filed 02/18/21 Page 11 of 75
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`
`
`INTRODUCTION
`
`Fed cattle prices hit a historic peak in 2014, largely because a significant drought
`
`led to reduced supply. In 2015, the cattle herd started to rebuild, and fed cattle prices fell.
`
`As the Government Accountability Office (GAO) found, this price drop was due to normal
`
`supply and demand forces.
`
`Plaintiffs allege something much more nefarious. They claim that Defendants, the
`
`four largest meatpackers in the United States, conspired to suppress fed cattle prices and
`
`increase beef prices, primarily by making coordinated slaughter reductions.1
`
`The Court dismissed Plaintiffs’ prior complaints because Plaintiffs had not plausibly
`
`pleaded direct or indirect evidence of the alleged conspiracy. Plaintiffs have not fixed the
`
`fatal defects the Court identified. This brief addresses Plaintiffs’ federal claims; the state
`
`claims are discussed in a separate brief.
`
`As before, Plaintiffs assert that two witnesses provide direct evidence of the
`
`supposed conspiracy. Plaintiffs have not cured the defects the Court found the last time
`
`around. Most importantly, Plaintiffs still do not allege facts sufficient to show that either
`
`person had any personal knowledge of any conspiracy. The first person, the former quality
`
`
`1 Plaintiffs present their allegations in four complaints. One is brought by ranchers,
`feedlot owners, and ranchers’ organizations. See Third Consol. Am. Class Action Compl.
`¶¶ 29-41, In re Cattle Antitrust Litig., No. 19-cv-01222, ECF No. 312 (Cattle Compl.).
`Three are brought by direct and indirect purchasers of beef. See Corrected Consol. Am.
`Class Action Compl. ¶¶ 32-33, In re DPP Beef Litig., No. 20-cv-1319, ECF No. 158 (DPP
`Compl.) (direct purchasers of beef ); Corrected Third Am. Class Action Compl. ¶¶ 30-49,
`Peterson v. JBS S.A., No. 19-cv-1129, ECF No. 256 (Peterson Compl.) (indirect retail
`purchasers of beef ); Corrected Am. Class Action Compl. ¶ 31, Erbert & Gerbert’s, Inc. v.
`Cargill, Inc., No. 20-cv-1414, ECF No. 125 (Erbert Compl.) (indirect commercial
`purchaser of beef ).
`
`1
`
`

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`CASE 0:20-cv-01319-JRT-HB Doc. 168 Filed 02/18/21 Page 12 of 75
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`
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`assurance officer at a JBS plant, says that a fabrication manager at his plant once mentioned
`
`an “agreement,” “or words to that effect.” The quality assurance officer is just repeating
`
`what he heard from the fabrication manager, and the fabrication manager does not claim to
`
`have any personal knowledge of the supposed agreement. (Plaintiffs pleaded that the
`
`fabrication manager had personal knowledge the last time around, but now they have
`
`deleted that allegation from the complaints.) So this talk of an “agreement” is nothing but
`
`hearsay and speculation. The fabrication manager provides no details about the supposed
`
`agreement, such as who agreed to it, which plants were involved, or when or how any
`
`reductions took place. Plaintiffs have added nothing of substance to the prior complaints.
`
`The second witness, a former feedlot manager, does not say anything about
`
`coordinated slaughter reductions. So, as the Court recognized last time, those allegations
`
`do not provide direct evidence of the asserted conspiracy. All this witness says is that some
`
`Defendants followed certain purchasing practices at his feedlot; that does not show an
`
`agreement, and the practices at issue are not anticompetitive.
`
`Plaintiffs are left with trying to show conspiracy through allegations of parallel
`
`conduct combined with plus factors. The Court previously found Plaintiffs’ allegations of
`
`parallel conduct insufficient because they were not Defendant-specific. Plaintiffs have
`
`added each Defendant’s estimated quarterly slaughter volumes, but those estimates depend
`
`on industry-wide data, so they have the same problem as before. Plaintiffs also add
`
`Defendant-specific monthly slaughter volumes for 2019, and yearly slaughter volumes for
`
`2018 and 2019. But that data (like the new estimated quarterly data) actually undercuts the
`
`claim of parallel conduct, because it shows that Defendants acted differently from each
`
`2
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`

`

`CASE 0:20-cv-01319-JRT-HB Doc. 168 Filed 02/18/21 Page 13 of 75
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`
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`other, and that Defendants increased slaughter volumes during the times Plaintiffs say they
`
`were conspiring to decrease slaughter volumes. That just does not show Defendants acting
`
`in parallel to reduce slaughter volumes.
`
`Plaintiffs’ other allegations of parallel conduct are largely unchanged from the
`
`previous complaints. They did not plausibly plead a conspiracy before, and they still do
`
`not now. For example, Plaintiffs again say that three Defendants closed plants on five
`
`occasions, but four of those were before the supposed conspiracy, and they did not happen
`
`in parallel.
`
`Without a plausible claim of parallel conduct, there is no need to reach Plaintiffs’
`
`asserted plus factors. In any event, those plus factors merely reflect that the fed cattle and
`
`beef markets are concentrated commodity markets – where companies should be expected
`
`to respond similarly to market forces. They do not push the complaints over the line to
`
`plausibly alleging a conspiracy.
`
`Plaintiffs ignore the obvious alternative explanation for the fall in fed cattle prices.
`
`That explanation makes their claim of conspiracy implausible. Plaintiffs’ real grievance is
`
`that prices did not remain at historic highs. But as the GAO concluded after an 18-month
`
`investigation, ordinary market forces caused those prices to fall. There is no reason to look
`
`for conspiracy when the explanation is clear.
`
`The remaining federal claims (for violations of the Packers and Stockyards Act and
`
`the Commodity Exchange Act) cannot survive without the Sherman Act claims, as the
`
`Court recognized previously. Plaintiffs’ claims also are untimely and cannot be rescued
`
`by the fraudulent-concealment or continuing-violation doctrines.
`
`3
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`

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`CASE 0:20-cv-01319-JRT-HB Doc. 168 Filed 02/18/21 Page 14 of 75
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`
`
`Plaintiffs have had plenty of chances. All Plaintiffs have amended their complaints
`
`at least twice. They still have not provided the Court with anything plausibly suggesting a
`
`conspiracy here. The Court should not send this case to costly and time-consuming
`
`discovery based on such flimsy allegations. Instead, the Court should dismiss Plaintiffs’
`
`federal claims with prejudice.
`
`LEGAL STANDARD
`
`To withstand a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a
`
`complaint must plead “sufficient factual matter” that if “accepted as true” “‘state[s] a claim
`
`to relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting
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`Bell Atl. Corp v. Twombly, 550 U.S. 544, 570 (2007)). This standard “asks for more than
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`a sheer possibility that a defendant has acted unlawfully.” Id. A complaint that “pleads
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`facts that are ‘merely consistent with’ a defendant’s liability . . . ‘stops short of the line
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`between possibility and plausibility.’ ” Id. (quoting Twombly, 550 U.S. at 557).
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`The plaintiff must plead “factual content” – such as the “relevant individuals, acts,
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`and conversations” – that “raise a right to relief above the speculative level.” In re Pre-
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`Filled Propane Tank Antitrust Litig., 893 F.3d 1047, 1056-57 (8th Cir. 2018) (citations and
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`internal quotation marks omitted). The allegations must be defendant-specific; the plaintiff
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`cannot plead industry-wide trends and ask the court to speculate that each defendant
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`contributed to those trends. In re Pork Antitrust Litig., No. 18-cv-1776, 2019 WL 3752497,
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`at *8 (D. Minn. Aug. 8, 2019). The court considers “whether there are lawful, ‘obvious
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`alternative explanation[s]’ for the alleged conduct” that make the plaintiff ’s allegation of
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`CASE 0:20-cv-01319-JRT-HB Doc. 168 Filed 02/18/21 Page 15 of 75
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`a conspiracy implausible. McDonough v. Anoka Cty., 799 F.3d 931, 946 (8th Cir. 2015)
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`(quoting Iqbal, 556 U.S. at 682).
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`The court may look to the complaint itself and to documents attached to or
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`incorporated by reference in the complaint. Brown v. Medtronic, Inc., 628 F.3d 451, 459-
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`60 (8th Cir. 2010); see Twombly, 550 U.S. at 568 n.13. The court also may consider items
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`in the public record. Stahl v. U.S. Dep’t of Agric., 327 F.3d 697, 700 (8th Cir. 2003). The
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`court should be “reasonably aggressive in weeding out meritless antitrust claims at the
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`pleading stage” because of the “unusually high cost of discovery in antitrust cases.”
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`Insulate SB, Inc. v. Advanced Finishing Sys., Inc., 797 F.3d 538, 543 (8th Cir. 2015)
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`(internal quotation marks omitted).
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`ARGUMENT
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`Plaintiffs claim that when fed cattle prices hit historic highs in 2014, Defendants
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`conspired to “jointly manage their collective demand below the available cattle supply,”
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`mainly by coordinating reductions in slaughter volumes, to lower the price of fed cattle and
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`increase the price of beef. Cattle Compl. ¶ 12. The Court already dismissed the complaints
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`once. Despite multiple amendments, Plaintiffs still do not plausibly allege an antitrust
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`conspiracy.
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`I.
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`PLAINTIFFS FAIL TO PLEAD A VIOLATION OF THE SHERMAN ACT
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`To state a claim under Section 1 of the Sherman Act, 15 U.S.C. § 1 et seq., a plaintiff
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`must plausibly allege that the defendants entered into an agreement to restrain competition.
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`In re Cattle Antitrust Litig., No. 19-cv-1222, 2020 WL 5884676, at *4 (D. Minn. Sept. 29,
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`2020). The plaintiff can attempt to show an agreement in two ways: through direct
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`CASE 0:20-cv-01319-JRT-HB Doc. 168 Filed 02/18/21 Page 16 of 75
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`evidence of an agreement, or through evidence of parallel conduct and “plus factors” that
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`“plausibly suggest[] the existence” of an agreement. In re Musical Instruments & Equip.
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`Antitrust Litig., 798 F.3d 1186, 1193 (9th Cir. 2015).
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`Plaintiffs attempt both. But Plaintiffs have not fixed the problems the Court
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`identified in the prior complaints, and their own data undermines their claim of a
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`conspiracy.
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`A.
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`Plaintiffs’ Witness Allegations Do Not Provide Direct Evidence Of A
`Conspiracy
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`Plaintiffs provide allegations from two confidential witnesses – a former quality
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`assurance officer at a Swift (JBS) plant and a former manager of a feedlot. Cattle Compl.
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`¶ 28.2 The Court previously refused to credit these allegations, because Plaintiffs had not
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`explained how the first person was in a position to know of any conspiracy, and because
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`the second person described only pu