Antitrust Law Daily Wrap Up, ANTITRUST—E.D. Okla.: Court finally approves $100 million Pilgrim’s Pride settlement with broiler chicken growers, (Jan 10, 2025)
Law Firms Mentioned:Kasowitz Benson Torres, LLP | Whitfield Bryson & Mason, LLP
Organizations Mentioned:Berger & Montague, PC | Haff Poultry, Inc. | Hausfeld, LLP | Huntington National Bank | Koch Foods, Inc. | Perdue Farms, Inc. | Pilgrim's Pride Corp. | Tyson Foods
By Justin Marcus Smith, J.D.
The Pilgrim’s Pride settlement brings nearly 8 years of broiler litigation to a close and is easily the largest broiler grower settlement in both absolute terms and in relationship to the relative market share of the settlor.
The federal district court in Muskogee, Oklahoma, has granted final approval of the long-awaited Pilgrim’s Pride Corporation (PPC) settlement with the chicken broiler grower plaintiffs who accused it and other broiler chicken processors of price-fixing. The litigation traces back to 2017. The PPC settlement is the fifth and final settlement in the case. It is five times larger than the $21 million Tyson settlement. The court also approved a $33 million fee award for broiler growers’ counsel. The chicken growers credited PPC’s counsel and “renowned” mediator Professor Eric Green for the settlement-in-principle and long form settlement agreement executed on August 6, 2024 (In Re: Broiler Chicken Grower Antitrust Litigation, No. 6:21-cv-00033-RJS-CMR (E.D. Okla. Jan. 7, 2025)).
Nearly eight years ago, in 2017, broiler chicken growers brought price-fixing claims against Tyson Foods, Inc., Pilgrim’s Pride Corp., Perdue Farms, Inc., and Koch Foods, Inc., among other companies that operate localized chicken broiler processing plants. In 2021, Tyson and Perdue agreed to settle for $21 million and $14.75 million, respectively.
On May 8, 2024, the court granted certification and ordered a nationwide antitrust class of 24,354 growers; however, PPC sought and obtained a partial stay for leave to appeal. The court found it made good sense, at that juncture, to separate class proceedings, including distribution of class notice, from summary judgment briefing and other trial preparation.
On June 13, 2024, the chicken growers filed their motion for partial summary judgment, and, before reaching the settlement-in-principle with PPC, briefed their summary judgment motion and motion to enforce class waivers. The parties executed a settlement agreement on August 6, 2024. On August 20, 2024, the court appointed Hausfeld LLP and Berger Montague PC as settlement class counsel and the plaintiff class representatives; granted final approval of the class notice; and, appointed Angeion Group LLC as the settlement administrator with Huntington National Bank as escrow agent.
Settlement class. The settlement agreement defined the settlement class, paraphrased here, as all individuals and entities in the U.S. and its territories who were compensated for broiler grow-out services by a defendant or co-conspirator, or by associated entities, at any time from January 27, 2013 through December 31, 2019.
Settlement sum. As detailed in the memorandum of law in support of the motion for final approval, PPC agreed to pay $100 million, which it deposited into escrow on October 28, 2024, for pro rata distribution to the settlement class. PPC has also agreed it will not, for a five-year period, require any further arbitration or try to enforce any putative bans on collective or class action. Members of the class agreed to release claims against defined PPC released parties arising from the factual predicates of the action.
Notice, objections. The court approved a notice plan with an opt-out deadline of December 3, 2024. Angeion ran the settlement website, otherwise publicized the settlement, and provided a toll-free phone line that received over 1000 calls. The broiler growers said they received 10 exclusion requests and only one objection, to counsel fees, out of a class of about 30,000.
Fees. The class counsel petition sought an award of attorney fees of one-third of the gross settlement, $33,333,333, plus accrued interest; reimbursement of over $400 thousand in litigation costs; and, services awards of $100 thousand to each of seven class representatives.
The court found the request of one-third plus interest to be well within the applicable range and consistent with the Tenth Circuit preference for the percentage-of-recovery method for calculating attorney fees. The court said the Tenth Circuit does not require a lodestar crosscheck, but even so, a lodestar crosscheck supported the reasonableness of the fee award based on class counsel having spent more than 56,000 hours litigating the case. The court found that amount of time implied a lodestar fee of about $36 million, and a multiplier, based on prior fee awards in this litigation, of about 1.56. The court found the 1.56 multiplier “in line” with lodestar multipliers deemed reasonable in comparable common fund cases. The court likewise approved $402,434.23 of unreimbursed expenses and the $100 thousand dollar service awards. Combined with the prior service awards, each class representative will receive a total of $150,000.
The Case is No. 6:21-cv-00033-RJS-CMR.
Judge: Shelby, R.
Attorneys: Caroline Ramsey Taylor (Whitfield Bryson & Mason, LLP) for Haff Poultry, Inc. Alexander S. Lee (Kasowitz Benson Torres, LLP) for Pilgrim's Pride Corp.
Companies: Haff Poultry, Inc.; Pilgrim's Pride Corp.
Cases: Antitrust OklahomaNews