CASE 0:20-cv-01319-JRT-HB Doc. 174 Filed 02/18/21 Page 1 of 23
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`UNITED STATES DISTRICT COURT
`DISTRICT OF MINNESOTA
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`IN RE CATTLE ANTITRUST
`LITIGATION
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`This document relates to:
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`ALL CASES
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`Case No. 19-cv-1222-JRT-HB
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`KENNETH PETERSON, et al.,
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`Case No. 19-cv-1129-JRT-HB
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`v.
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`JBS S.A., et al.,
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`Plaintiffs,
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`Defendants.
`
`IN RE DPP BEEF LITIGATION
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`Case No. 20-cv-1319-JRT-HB
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`This document relates to:
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`ALL CASES
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`ERBERT & GERBERT’S, INC.,
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`Case No. 20-cv-1414-JRT-HB
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`Plaintiff,
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`v.
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`CARGILL, INC., et al.,
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`Defendants.
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`NATIONAL BEEF PACKING COMPANY, LLC’S
`MEMORANDUM OF LAW IN SUPPORT OF ITS MOTION TO DISMISS
`THE AMENDED CLASS ACTION COMPLAINTS
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`

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`CASE 0:20-cv-01319-JRT-HB Doc. 174 Filed 02/18/21 Page 2 of 23
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`TABLE OF CONTENTS
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`Page
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`B.
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`2.
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`3.
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`INTRODUCTION .............................................................................................................. 1
`LEGAL STANDARD ........................................................................................................ 2
`ARGUMENT ...................................................................................................................... 3
`A.
`Plaintiffs Have Not Pled Any “Direct Evidence” of National Beef’s
`Participation in a Conspiracy ....................................................................... 3
`1. Witness 1 Does Not Mention National Beef, Let Alone Tie
`The Company To An Alleged Conspiracy ........................................ 5
`2. Witness 2’s Statements Affirmatively Exclude National Beef
`from Any Anticompetitive Conduct .................................................. 7
`Plaintiffs Have Not Pled Any Facts Suggesting “Indirect Evidence”
`of National Beef’s Participation in a Conspiracy ......................................... 8
`1.
`Plaintiffs’ Allegations Demonstrate That National Beef Did
`Not Close or Idle a Plant—And Actually Expanded
`Capacity—During the Alleged Conspiracy Period ........................... 9
`Plaintiffs’ Own Allegations Show that National Beef Did Not
`Reduce its Total Slaughter Volumes During the Alleged
`Conspiracy Period ........................................................................... 11
`National Beef Did Not Engage in Parallel Slaughter
`Reductions Nor Change Its Behavior During The Alleged
`Conspiracy Period ........................................................................... 13
`National Beef Did Not Engage in Parallel Procurement
`Activity ............................................................................................ 14
`Plaintiffs’ Plus Factors Are Insufficient, Unspecific, And
`Often Inapplicable to National Beef ............................................... 17
`CONCLUSION ................................................................................................................ 18
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`4.
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`5.
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`i
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`CASE 0:20-cv-01319-JRT-HB Doc. 174 Filed 02/18/21 Page 3 of 23
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`TABLE OF AUTHORITIES
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`CASES
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`Page
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`America Channel, LLC v. Time Warner Cable Inc.,
`No. 06–2175, 2007 WL 1892227 (D. Minn. June 28, 2007) ................................... 9, 10
`
`Ashcroft v. Iqbal,
`556 U.S. 662 (2009) ....................................................................................................... 3
`
`Bell Atl. Corp. v. Twombly,
`550 U.S. 544 (2007) ....................................................................................... 2, 3, 12, 15
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`Blomkest Fertilizer, Inc. v. Potash Corp. of Sask.,
`203 F.3d 1028 (8th Cir. 2000) (en banc) ....................................................................... 9
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`Burtch v. Milberg Factors, Inc.,
`662 F.3d 212 (3d Cir. 2011) ........................................................................................... 4
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`Double D Spotting Serv., Inc. v. Supervalu, Inc.,
`136 F.3d 554 (8th Cir. 1998) ......................................................................................... 5
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`Hanten v. Sch. Dist. of Riverview Gardens,
`183 F.3d 799 (8th Cir. 1999) ..................................................................................... 2, 9
`
`In re Cattle Antitrust Litig.,
`No. CV 19-1129 (JRT/HB), 2020 WL 5884676 (D. Minn. Sept. 29,
`2020) .......................................................................................................................... 4, 7
`
`In re Milk Prods. Antitrust Litig.,
`84 F. Supp. 2d 1016 (D. Minn. 1997), aff’d, 195 F.3d 430 (8th Cir.
`1999) .............................................................................................................................. 2
`
`In re Pork Antitrust Litig.,
`No. 18-cv-1776 (JRT/HB), 2019 WL 3752497 (D. Minn. Aug. 8, 2019) ............... 2, 15
`
`In re Pre-Filled Propane Tank Antitrust Litig.,
`893 F.3d 1047 (8th Cir. 2018) ....................................................................................... 2
`
`ii
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`CASE 0:20-cv-01319-JRT-HB Doc. 174 Filed 02/18/21 Page 4 of 23
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`Leslie J. v. Berryhill,
`No. 17-CV-1319 (TNL), 2018 WL 4603278 (D. Minn. Sept. 25, 2018) ...................... 6
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`Mayor of Baltimore v. Citigroup, Inc.,
`709 F.3d 129 (2d Cir. 2013) ........................................................................................... 4
`
`Podpeskar v. Makita U.S.A. Inc.,
`247 F. Supp. 3d 1001 (D. Minn. 2017) ........................................................................ 10
`
`Porous Media Corp. v. Pall Corp.,
`186 F.3d 1077 (8th Cir. 1999) ..................................................................................... 10
`
`Stahl v. U.S. Dep’t of Agric.,
`327 F.3d 697 (8th Cir. 2003) ....................................................................................... 10
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`OTHER AUTHORITIES
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`Rule 12(b)(6) ................................................................................................................. 5, 10
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`iii
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`CASE 0:20-cv-01319-JRT-HB Doc. 174 Filed 02/18/21 Page 5 of 23
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`INTRODUCTION
`Plaintiffs’ amended class action complaints (the “Amended Complaints”) rest on a
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`supposition that this Court will not be able to pick National Beef Packing Company, LLC
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`(“National Beef”) out of a herd of “Defendants.” Though they contend that “Defendants”
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`participated in a multi-faceted, years-long conspiracy to reduce industry slaughter rates,
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`suppress the prices paid for fed cattle, and raise the prices charged for boxed beef, Plaintiffs
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`have not pled any facts, taken as true, that would constitute direct or circumstantial
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`evidence that National Beef participated in such a conspiracy. To the contrary, the
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`Amended Complaints concede that National Beef did not participate at all in the activities
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`that provide the foundation for Plaintiffs’ claims. For example, during the alleged
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`conspiracy period National Beef:
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`• Did not close any plant;
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`• Did not reduce its slaughter volumes in total or in parallel;
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`• Did not import cattle;
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`• Did not boycott any feedlots; and
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`• Did not participate at all, much less engage in anticompetitive activity in, the
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`broiler chicken or pork industries.
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`These facts are wholly inconsistent with Plaintiffs’ conspiracy claim, and they have not
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`pled any other facts that would—directly or indirectly—link National Beef to any
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`anticompetitive conduct. Merely including National Beef among a group of “Defendants”
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`that allegedly engaged in anticompetitive acts does not, and cannot, make it so. For this
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`reason, and for the reasons set forth in Defendants’ Joint Motions to Dismiss all four
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`CASE 0:20-cv-01319-JRT-HB Doc. 174 Filed 02/18/21 Page 6 of 23
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`Amended Complaints (“Joint Motions,” which are incorporated by reference herein), the
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`Court should now dismiss National Beef from all four actions with prejudice.1
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`LEGAL STANDARD
`To survive a motion to dismiss, a complaint alleging an antitrust conspiracy must
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`plead “factual content,” such as the “relevant individuals, acts, and conversations” that, if
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`accepted as true, “support the reasonable inference” of a conspiracy. In re Pre-Filled
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`Propane Tank Antitrust Litig., 893 F.3d 1047, 1056-57 (8th Cir. 2018) (internal quotation
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`marks omitted). Plaintiffs may not simply rely on “group” pleading to satisfy their burden.
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`See In re Pork Antitrust Litig., No. 18-cv-1776 (JRT/HB), 2019 WL 3752497, at *8 (D.
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`Minn. Aug. 8, 2019) (explaining that “[w]ithout specific information regarding each
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`Defendant, the Court has no basis to analyze which, how many, or when any of the
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`individual Defendants may have affirmatively acted” in furtherance of the alleged
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`conspiracy); In re Milk Prods. Antitrust Litig., 84 F. Supp. 2d 1016, 1020 (D. Minn. 1997)
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`(dismissing claims where the complaint “attempt[s] to lump [defendant] in with the other
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`defendants”), aff’d, 195 F.3d 430 (8th Cir. 1999). Nor may Plaintiffs rely on conclusory
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`allegations. Hanten v. Sch. Dist. of Riverview Gardens, 183 F.3d 799, 805 (8th Cir. 1999).
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`Rather, Plaintiffs have the burden of presenting “allegations plausibly suggesting
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`(not merely consistent with) agreement” to satisfy the “threshold requirement” of pleading
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`a conspiracy to restrain trade. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557 (2007). While
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`1 Given the lengthy briefing on the Joint Motions, National Beef will not include its
`own recitation of the factual background, and will instead adopt and incorporate that
`portion of the Joint Motions herein.
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`2
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`CASE 0:20-cv-01319-JRT-HB Doc. 174 Filed 02/18/21 Page 7 of 23
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`Plaintiffs are entitled to rely on reasonable inferences to support their claims, they are not
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`entitled to any inferences where there is an “obvious alternative explanation” for a
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`defendant’s behavior. Id.at 567. Ultimately, whether a complaint “states a plausible claim
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`for relief” is a “context-specific task that requires the reviewing court to draw on its judicial
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`experience and common sense.” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009).
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`ARGUMENT
`Plaintiffs’ factual allegations fall into three distinct categories: some do not
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`implicate National Beef at all; others show that National Beef did not engage in parallel
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`conduct; and still others demonstrate that National Beef’s actions are wholly inconsistent
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`with a conclusion that it participated in a conspiracy to restrain trade. Absent any facts
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`connecting National Beef to the alleged conspiracy at the heart of Plaintiffs’ claims, or
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`facts from which its participation could reasonably be inferred, the Amended Complaints
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`must be dismissed.2
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`A.
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`Plaintiffs Have Not Pled Any “Direct Evidence” of National Beef’s
`Participation in a Conspiracy
`The Amended Complaints identify just two ostensible sources of direct evidence:
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`statements from Witness 1, a former Swift employee who never worked for National Beef;
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`and Witness 2, a feedlot employee who sold cattle to National Beef. Cattle Compl. ¶¶ 28,
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`2 The allegations against National Beef are largely identical across all four Amended
`Complaints. This brief will provide citations primarily to the Cattle Complaint. See Third
`Consol. Am. Class Action Compl., In re Cattle Antitrust Litig., No. 19-cv-01222, ECF No.
`312 (Cattle Compl.).
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`3
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`CASE 0:20-cv-01319-JRT-HB Doc. 174 Filed 02/18/21 Page 8 of 23
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`102, 143.3 Neither individual provides direct evidence of National Beef’s participation in
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`a price-fixing conspiracy of any kind, let alone one effectuated through coordinated
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`slaughter reductions.
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`Direct evidence of conspiracy consists of “smoking gun” evidence such as “a
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`recorded phone call in which two competitors agreed to fix prices at a certain level.” Mayor
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`of Balt. v. Citigroup, Inc., 709 F.3d 129, 136 (2d Cir. 2013). Direct evidence must be
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`“explicit and requires no inferences to establish the proposition or conclusion being
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`asserted.” Burtch v. Milberg Factors, Inc., 662 F.3d 212, 225 (3d Cir. 2011) (citation
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`omitted). This Court has already determined that the statements attributed to Witness 1
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`and Witness 2 (which were contained in prior iterations of the complaints and repeated
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`again in the Amended Complaints) do not meet these standards. Plaintiffs failed to
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`“adequately explain . . . how their interactions in [their] jobs would lead to them acquiring
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`the knowledge they allegedly possess,” In re Cattle Antitrust Litig., No. CV 19-1129
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`(JRT/HB), 2020 WL 5884676, at *5 (D. Minn. Sept. 29, 2020), and the details Plaintiffs
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`added to—and sometimes subtracted from—the Amended Complaints further undermine
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`any connection between National Beef and the witness’ recollections of any allegedly
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`anticompetitive conduct.
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`3 While neither individual is credibly labeled as a “witness” to any anticompetitive
`conduct, for ease of reference National Beef will identify them here as they are described
`in the Amended Complaints.
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`4
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`CASE 0:20-cv-01319-JRT-HB Doc. 174 Filed 02/18/21 Page 9 of 23
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`1.
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`Witness 1 Does Not Mention National Beef, Let Alone Tie The
`Company To An Alleged Conspiracy
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`Plaintiffs’ allegations concerning Witness 1 fall far short of implicating National
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`Beef in any misconduct. According to the Amended Complaints, Witness 1 is Jason F., a
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`former quality assurance employee who worked at Swift’s plant in Cactus, Texas. Cattle
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`Compl. ¶¶ 101-02. Plaintiffs allege that Jason F.’s boss, James Hooker, once told him that
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`Swift’s “competitor plants” would be cutting their kills in an unspecified week sometime
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`in 2015. Cattle Compl. ¶¶ 117-18. Neither Jason F. nor Hooker is alleged to have worked
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`for National Beef, nor is either alleged to have (or been in a position to have) direct
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`knowledge of National Beef’s plans or activities. Cattle Compl. ¶¶ 107-15. Plaintiffs
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`claim Hooker would provide Jason F. with information about “current and future
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`operations of [Defendants’] nearby packing plants,” Cattle Compl. ¶ 115, but they do not
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`provide any details, including the nature or source of the information. Such a vague and
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`conclusory statement cannot suffice to support Plaintiffs’ conspiracy claim. See Double D
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`Spotting Serv., Inc. v. Supervalu, Inc., 136 F.3d 554, 558 (8th Cir. 1998) (“The essential
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`elements of a private antitrust claim must be alleged in more than vague and conclusory
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`terms to prevent dismissal of the complaint on a defendant’s Rule 12(b)(6) motion.”).
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`Nonetheless, Plaintiffs place great weight on an allegation about a conversation in
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`2015 during which Jason F. asked Hooker if Swift Cactus’s “competitor plants” were
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`cutting kill that week. Cattle Compl. ¶ 118. Jason F. evidently did not ask Mr. Hooker
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`about National Beef, its plans, or any of its plants, and Mr. Hooker apparently made no
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`mention of them. See id. This allegation represents a significant step backwards for
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`5
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`Plaintiffs, as their prior complaints alleged that Hooker claimed there was an “agreement”
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`between his plant and “the other Packing Defendants’ plants in the Panhandle Region” to
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`reduce slaughter rates. See Second Consol. Am. Class Action Compl. ¶ 95, In re Cattle
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`Antitrust Litig., No. 19-cv-01222, ECF No. 125 (Previous Cattle Compl.). Further, the
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`prior complaints asserted that Witness 1 “understood that he was referring to at least all
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`Packing Defendants’ plants in the Panhandle Region, namely Tyson Amarillo, Texas; JBS
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`Cactus, Texas; Cargill Friona, Texas; and National Beef, Liberal, Kansas.” Id. ¶ 96. Now,
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`the claimed “agreement” is with “competitor plants”—a particularly ambiguous term given
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`the presence of independent packing plants in the Texas Panhandle4—and what Witness 1
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`“understood” has morphed only into what he was “certain” the fabrication manager
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`“intended to convey.” Compare Previous Cattle Compl. ¶¶ 95-98 with Cattle Compl.
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`¶¶ 117-119. Jason F.’s vague statement does not provide direct (let alone sufficient)
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`evidence that National Beef participated in a price-fixing conspiracy of any kind, much
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`less one effectuated through coordinated slaughter reductions.
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`4 Caveniss Beef Packers and Preferred Beef Group have plants in the Texas
`Panhandle. See Declaration of Benjamin L. Ellison in Support of National Beef Packing
`Company, LLC’s Motion to Dismiss the Amended Class Action Complaints, Exhibit A
`(“Ellison Decl.”). The Court can take judicial notice of the locations of these plants and
`their proximity to the Swift plant. See Leslie J. v. Berryhill, No. 17-CV-1319 (TNL), 2018
`WL 4603278, at *25 n.5 (D. Minn. Sept. 25, 2018) (“The Court takes judicial notice that
`the distance between Red Wing and Rochester, Minnesota, is approximately 45 miles.”)
`(citing Mut. Ben. Life Ins. Co. v. Robison, 58 F. 723, 732 (8th Cir. 1893).
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`6
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`CASE 0:20-cv-01319-JRT-HB Doc. 174 Filed 02/18/21 Page 11 of 23
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`2.
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`Witness 2’s Statements Affirmatively Exclude National Beef from
`Any Anticompetitive Conduct
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`Plaintiffs’ allegations concerning Witness 2 affirmatively rebut any suggestion that
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`National Beef participated in anticompetitive conduct at the feedlot where he worked.
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`Witness 2 is Matt T., who worked at Carrizo Feeders in Texas for just six months during
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`the alleged conspiracy period. Cattle Compl. ¶ 143, n. 59. According to the Amended
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`Complaints, Matt T. claims that the Defendants engaged in a “queuing convention” that
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`prescribed a right-of-first refusal for the first company to bid on a particular pen of cattle
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`at the feedlot. Cattle Compl. ¶¶ 166-69. Though Matt T. heard from his predecessor that
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`JBS and Tyson boycotted the feedlot for a period of time after it allegedly failed to adhere
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`to the queuing convention, the Amended Complaints expressly admit that National Beef
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`and Cargill Meat Services continued to patronize the business. Cattle Compl. ¶ 167.
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`Matt T. also claims that Defendants proposed—and the feedlot agreed—to employ
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`a card-drawing scheme to decide which of them would bid first on a particular lot of cattle.
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`This process, according to the Amended Complaints, would permit the cattle buyers “to
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`avoid attending the feedlot at increasingly early hours in an attempt to place the first bid.”
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`Cattle Compl. ¶ 172.
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`At the threshold, it bears repeating (as the Court already observed) that Matt T.’s
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`statements say nothing about a conspiracy to reduce slaughter volumes. At best, they could
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`suggest a concerted refusal to deal, which differs from the “main thrust of Plaintiffs’
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`alleged price-fixing conspiracy.” In re Cattle Antitrust Litig., No. CV 19-1129 (JRT/HB),
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`2020 WL 5884676, at *5 (D. Minn. Sept. 29, 2020). Plaintiffs have not even attempted to
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`7
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`CASE 0:20-cv-01319-JRT-HB Doc. 174 Filed 02/18/21 Page 12 of 23
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`address the Court’s criticism that Matt T.’s statements are “mismatched” to their claim that
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`“Defendants” engaged in a price-fixing conspiracy of any kind, let alone one effectuated
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`through coordinated slaughter reductions. See id.
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`Moreover, Matt T.’s statements expressly acknowledge that National Beef
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`continued to purchase cattle at the feedlot after other Defendants allegedly boycotted it.
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`Despite an alleged breach of the so-called “queuing convention” by the feedlot, Witness 2
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`admits that the feedlot would still “receive bids from National Beef and [Cargill].” Cattle
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`Compl. ¶ 167. Indeed, Witness 2 does not cite a single instance in which National Beef
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`refused to visit his feedlot or to bid on cattle there.
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`Finally, Plaintiffs have not explained how National Beef’s participation in the “card-
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`drawing scheme” constitutes anticompetitive conduct, let alone conduct relating to the
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`alleged slaughter reduction conspiracy at the heart of Plaintiffs’ claims. Plaintiffs do not
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`explain how a random draw to start the bidding affected each packer’s ability to compete
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`when, as Plaintiffs admit, other packers could offer higher bids. See Cattle Compl. ¶ 171.
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`In short, Plaintiffs have not pled any facts, taken as true, that would provide direct
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`evidence showing that National Beef participated in a price-fixing conspiracy effectuated
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`through coordinated slaughter reductions.
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`B.
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`Plaintiffs Have Not Pled Any Facts Suggesting “Indirect Evidence” of
`National Beef’s Participation in a Conspiracy
`Unable to allege any facts constituting direct evidence of a conspiracy to restrain
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`trade, Plaintiffs attempt to fall back on conclusory allegations that Defendants engaged in
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`parallel conduct, and that certain industry “plus factors” support an inference that National
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`8
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`CASE 0:20-cv-01319-JRT-HB Doc. 174 Filed 02/18/21 Page 13 of 23
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`Beef and the other Defendants colluded with one another to reduce slaughter capacity. But
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`many of those allegations explicitly exclude National Beef, and the remainder contradict
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`or negate any reasonable inference that National Beef participated in anticompetitive
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`conduct of any kind. Plaintiffs cannot rely on conclusory or internally inconsistent
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`allegations. See Hanten, 183 F.3d at 805 (reasoning a complaint “must not be merely
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`conclusory in its allegations”); see also America Channel, LLC v. Time Warner Cable Inc.,
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`No. 06–2175 (DWF/SRN), 2007 WL 1892227, *4-5 (D. Minn. June 28, 2007) (rejecting
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`“conclusory and internally inconsistent conspiracy allegations”).
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`1.
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`Plaintiffs’ Allegations Demonstrate That National Beef Did Not
`Close or Idle a Plant—And Actually Expanded Capacity—During
`the Alleged Conspiracy Period
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`Though Plaintiffs assert that “Defendants” closed and idled plants in furtherance of
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`the alleged conspiracy, their allegations against National Beef unequivocally demonstrate
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`the opposite. First, the Amended Complaints concede National Beef closed its Brawley,
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`California plant in June 2014, Cattle Compl. ¶ 190, six months before the start of the
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`alleged conspiracy in January 2015, Id. at ¶ 8. On its face, this allegation cannot support
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`an inference that National Beef participated in the ostensible conspiracy. See Blomkest
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`Fertilizer, Inc. v. Potash Corp. of Sask., 203 F.3d 1028, 1037 n.7 (8th Cir. 2000) (en banc)
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`(reasoning that an act occurring “before the class contends the conspiracy ever began . . .
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`is . . . of little relevance”).
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`9
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`CASE 0:20-cv-01319-JRT-HB Doc. 174 Filed 02/18/21 Page 14 of 23
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`Second, the Amended Complaints expressly assert that National Beef sold the
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`Brawley plant to One World Beef, LLC (which occurred in the spring of 2015)5 and that
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`One World reopened the plant during the alleged conspiracy period. Cattle Compl. ¶ 197.
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`The sale created one of the “independent packers” that, according to Plaintiffs, increased
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`industry-wide slaughter during the conspiracy period. Id. at ¶¶ 96, 197. And while
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`Plaintiffs allege in conclusory fashion that National Beef refrained from expanding its
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`capacity during the alleged conspiracy period, Id. at ¶ 189, elsewhere they admit that
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`National Beef expanded its capacity during the class period by acquiring a plant in Tama,
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`Iowa in 2019, thereby adding 1,100 head per day in additional slaughter capacity. Id. at
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`¶ 258. These internally inconsistent allegations likewise do not support an inference of
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`conspiracy. See America Channel, 2007 WL 1892227 at *4-5 (rejecting “conclusory and
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`internally inconsistent conspiracy allegations”).
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`Far from idling capacity or refraining from expanding capacity, the Amended
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`Complaints establish that during the alleged conspiracy period, National Beef both
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`expanded its own capacity and facilitated the entry of an “independent packer” that
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`increased industry capacity. Both actions are entirely inconsistent with a conspiracy to
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`reduce slaughter rates, and any allegations about them cannot be credited for that reason.
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`5 See Ellison Decl., Ex. B (announcing National Beef sold its Brawley plant to One
`World Beef). The Court may consider items in the public record, Stahl v. U.S. Dep’t of
`Agric., 327 F.3d 697, 700 (8th Cir. 2003), and take judicial notice of “materials that are
`part of the public record or do not contradict the complaint” in deciding a Rule 12(b)(6)
`motion. Porous Media Corp. v. Pall Corp., 186 F.3d 1077, 1079 (8th Cir. 1999) (citation
`omitted); see also Podpeskar v. Makita U.S.A. Inc., 247 F. Supp. 3d 1001, 1005 n.3 (D.
`Minn. 2017) (citing website containing press release in motion to dismiss ruling).
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`10
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`CASE 0:20-cv-01319-JRT-HB Doc. 174 Filed 02/18/21 Page 15 of 23
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`2.
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`Plaintiffs’ Own Allegations Show that National Beef Did Not Reduce
`its Total Slaughter Volumes During the Alleged Conspiracy Period
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`Plaintiffs’ own charts illustrate that National Beef increased its slaughter every year
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`from 2015-17 and again in 2019. Cattle Compl. ¶¶ 14, 133, fig. 4. In fact, Plaintiffs’ charts
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`plainly show that by 2019, National Beef was slaughtering more cattle by quarter than at
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`any point dating back to 2012. Id. at ¶¶ 11, 127, fig. 2. To muddle this damaging fact,
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`Plaintiffs allege that the increases in National Beef’s slaughter volumes during the
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`conspiracy period were “artificially low,” as evidenced by comparing National Beef’s
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`slaughter volumes during the alleged conspiracy to (1) its 2007-2014 average slaughter
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`volume, and (2) so-called “independent packer” performance. Id. at ¶¶ 14-15, 133. But
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`these allegations, like its others concerning National Beef, shade Plaintiffs’ own data and
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`do not account for the sale of the Brawley plant.
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`As to the first point, Plaintiffs rely on an average of National Beef’s slaughter
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`numbers from 2007-2014 to set the high water mark for the pre-conspiracy period, but they
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`do not explain why the average (rather than its constituent parts) is an appropriate metric,
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`or why the designated time period provides the right baseline for comparison. Of course,
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`National Beef completed its acquisition of the Brawley plant in June 2006.6 The 2007-
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`2014 data thus includes slaughter volumes from the Brawley plant that did not carry over
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`to National Beef’s ledger after it closed the plant in 2014, and creates an illusion that
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`National Beef reduced its slaughter volumes in 2015. Moreover, Plaintiffs’ own
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`6 See Ellison Decl., Ex. C (Form 8-K filing with Securities and Exchange
`Commission by National Beef Packing Company, LLC, showing acquisition of plant in
`Brawley, California on June 30, 2006).
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`allegations explain the reason why National Beef’s slaughter numbers decreased between
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`2014 and 2015: because National Beef closed the Brawley plant in June of 2014. Id. at
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`¶ 190. While Plaintiffs contend that National Beef’s total slaughter numbers fell by 6%
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`(or 184,000 head)7 from 2014 to 2015 as part of the alleged conspiracy, Id. at ¶ 214, n.102,
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`closing the Brawley plant removed 2,000 head per day from National Beef’s capacity, Id.
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`at ¶ 190, and reduced its total slaughter numbers by at least as many head as Plaintiffs
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`count toward collusion. (Indeed, running the Brawley plant for 5 or 6 days a week at 2,000
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`head per day from January through May of 2014 would have added a minimum of 210,000
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`cattle to National Beef’s total slaughter numbers in 2014, and more than explain the
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`184,000 difference in 2015.)8 Plaintiffs are not entitled to an inference of conspiracy in
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`the face of this obvious alternative – and far more plausible – explanation for the difference
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`between National Beef’s slaughter numbers in 2014 and 2015. Twombly, 550 U.S. at 567
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`(rejecting inference of conspiracy in light of an “obvious alternative explanation” for the
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`challenged conduct).
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`As to the second point, Plaintiffs engage in a similar sleight-of-hand. Plaintiffs
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`claim that National Beef’s slaughter volumes were “artificially low” between 2015-2019
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`7 The 184,000 figure is evident from the data in the Cattle Buyers Weekly
`publication that Plaintiffs rely on to support their allegations, see Cattle Compl., n. 3,
`copies of which are submitted to the Court with this filing. See Ellison Decl., Ex. A, at 16-
`18.
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`8 Plaintiffs do not allege that National Beef idled the Brawley plant or ran it at
`artificially low rates prior to closing it June 2014. To the contrary, they contend that
`National Beef’s explanation for closing the plant – that it was inefficient and difficult to
`procure cattle nearby – was “pretextual.” Cattle Compl. ¶ 193.
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`when compared to independent packer slaughter volumes during the same timeframe.
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`Cattle Compl. ¶¶ 15, 133. But the independent packer volumes were only as high as they
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`were because National Beef sold the Brawley plant to One World Beef in 2015 and could
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`no longer claim credit for Brawley slaughter volumes itself.
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`As the Court can plainly see, Plaintiffs’ comparison is as conclusory as it is
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`misleading, and cannot support an inference that National Beef reduced its slaughter
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`numbers between 2014 and 2015 as part of an alleged conspiracy.
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`3.
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`National Beef Did Not Engage in Parallel Slaughter Reductions Nor
`Change Its Behavior During The Alleged Conspiracy Period
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`Plaintiffs contend that all Defendants engaged in parallel conduct by “ration[ing]
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`their slaughter volumes during periods of high or rising prices for fed cattle to suppress
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`those prices.” Cattle Compl. ¶ 123. To support that allegation, Plaintiffs point to a chart
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`of quarterly slaughter values for each Defendant from 2012 to 2019. Id. at ¶¶ 11, 127 fig.2.
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`As explained in the Joint Motions, Figure 2 evidences a lack of parallel conduct among
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`Defendants, including National Beef, and Plaintiffs themselves draw conflicting
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`conclusions from the same chart. See Defs.’ Fed. Br. § I.B.1.9
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`Figure 2 says nothing about slaughter reductions “during periods of high or rising
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`prices for fed cattle.” Rather, it depicts Plaintiffs’ estimates of quarterly fluctuations in
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`slaughter volumes by each Defendant, Cattle Compl. ¶ 127, fig.2, n. 49, and shows no
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`9 Memorandum of Law in Support of Defendants’ Joint Motion to Dismiss the
`Federal Claims (filed contemporaneously herewith in all cases).
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`appreciable difference in National Beef’s behavior before, during or after the alleged
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`conspiracy period. For example:
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`• While Plaintiffs allege that Figure 2 “shows the consistent reductions made by
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`all Packing Defendants in the first quarters throughout the Class Period,” Id. at
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`¶ 129, National Beef’s slaughter volumes remained flat in Q1 2015 and
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`increased in Q1 2019.
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`• While Plaintiffs aver that Figure 2 shows “the extension of these cuts in 2018
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`and 2019 to encompass the fourth quarter as well,” Id. at ¶ 129, National Beef
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`increased its slaughter volume in Q4 2019 after it had already increased its
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`slaughter numbers to higher levels than any other point depicted on the chart.
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`• While Plaintiffs claim that “uniform reduction[s]” are not evident in the pre-
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`class period, Plaintiffs concede that National Beef “engaged in notable cuts”
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`before the conspiracy. Id. at ¶ 130.
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`• While Plaintiffs point to an increase in National Beef’s slaughter volume in the
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`third quarter of 2013 as evidence that it behaved differently during the alleged
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`conspiracy period, the increase is entirely consistent with the company’s
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`increase in slaughter volumes in the third quarters of 2016, 2017, and 2019.
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`In short, Figure 2 does not support Plaintiffs’ conclusory claim of parallel slaughter
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`reductions or an inference that National Beef’s behavior differed before and after the
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`alleged conspiracy began.
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`4.
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`National Beef Did Not Engage in Parallel Procurement Activity
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`Plaintiffs also complain about alleged cattle procurement practices, some of which
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`predate the alleged conspiracy by years (or even decades), and none of which implicate
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`National Beef. Specifically, Plaintiffs complain about reduced