Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Cattle producers, beef packers propose $83.5 million settlement in antitrust suit, (Feb 7, 2025)

By Christopher. M. Longo, J.D.

The proposed settlement of the suit, which alleges a price-fixing conspiracy in the cattle industry, comes after years of litigation and negotiation.

In a development in the ongoing multidistrict litigation (MDL) based in the District of Minnesota concerning alleged antitrust violations in the cattle industry, a group of cattle producers (the cattle plaintiffs) have filed an unopposed motion for preliminary approval of an $83.5 million settlement with JBS USA Food Company, Swift Beef Company, JBS Packerland, Inc., and JBS S.A. (collectively, JBS). As detailed in their memorandum in support of the motion for preliminary approval, the proposed settlement follows years of litigation and negotiation, and if approved, would resolve price-fixing claims brought by the cattle producers against JBS under the Sherman Act, the Commodity Exchange Act (CEA), and the Packers and Stockyard Act (PSA) (In Re Cattle and Beef Antitrust Litigation, No. 0:22-md-03031-JRT-JFD (D. Minn. Jan. 31, 2025)).

Background and allegations. In their complaint, the cattle producers alleged that beef packers Tyson, Cargill, JBS and National Beef “conspired to fix, depress, suppress, or stabilize the price of fed cattle they purchased in the United States and to manipulate the price of live cattle futures and options traded on the Chicago Mercantile Exchange,” and that this conduct violated the Sherman Act, the Commodity Exchange Act (CEA), and the Packers and Stockyard Act (PSA).

The cattle producers alleged that the beef packers conspired “to suppress the price of fed cattle that they purchased in the United States, from at least January 1, 2015 through the present,” and this “coordinated conduct [which included] slashing their respective slaughter volumes and curtailing their purchases of fed cattle in the cash cattle market, precipitated an unprecedented collapse in fed cattle prices in 2015” and “continued to suppress fed cattle prices thereafter.” The cattle producers alleged that as a result of the beef packers’ conduct, they “received significantly lower prices for their cattle than they would have in a competitive market,” and that “purchasers of live cattle futures and options…suffered significant harm as a result of the same.” This case was later filed in the District of Minnesota as part of the MDL to streamline proceedings.

In November 2023, the federal district court for the District of Minnesota approved the $25 million settlement of claims brought by commercial and institutional indirect purchaser plaintiffs (“CIIPPs”) against JBS in the antitrust class action litigation. In May 2024, the court dismissed an amended complaint against Tyson, Cargill, JBS and National Beef for not plausibly alleging a causal relationship between the alleged conspiracy conduct.

Settlement negotiations. Settlement discussions between the cattle producers and JBS began in earnest following the court’s denial of the beef packers’ motions to dismiss. The negotiations were facilitated by a mediator and involved a series of in-person and other discussions over several years. The parties “ultimately accepted a mediator’s proposal” and reached an agreement in January 2025, which was formalized in the Stipulation and Agreement of Settlement between the cattle producers and JBS.

Rule 23 requirements. In the cattle producers’ memorandum in support of their motion, they argue that the Rule 23(a) requirements are satisfied: numerosity is satisfied, in that “there are thousands of geographically dispersed persons and entities in each of the proposed classes;” there are “questions of law or fact common to the class,” such as whether there was a conspiracy, and whether the conspiracy “suppressed the prices [the cattle producers] paid for fed cattle during the class period;” the class representatives’ claims are “typical” of the class members’ claims; and the cattle producers and co-lead counsel have “fairly and adequately protect the interests of the class[es].” The cattle producers also contend that the classes can be certified under Rule 23(b)(3), as common questions predominate and “class action is superior to individual actions.”

Terms of the settlement. The proposed $83.5 million settlement fund will be distributed between two settlement classes, the Producer Class and the Exchange Class. The Producer Class consists of “persons or entities within the United States that directly sold to a Defendant one or more fed cattle for slaughter from June 1, 2015 to February 29, 2020,” while the Exchange Class consists of “persons or entities who held a long position in Live Cattle Futures traded on the Chicago Mercantile Exchange prior to June 1, 2015, and subsequently liquidated the long position through an offsetting market transaction at any point prior to November 1, 2016.” In addition to the monetary compensation, JBS has agreed to cooperate with the cattle producers in their ongoing litigation against the remaining defendants, Tyson, Cargill, and National Beef. This cooperation includes providing documents or data, producing witnesses for depositions and trial testimony, and assisting with the authentication of evidence.

The Case is No. 0:22-md-03031-JRT-JFD.

Judge: Tunheim, J.

Attorneys: Amanda F. Lawrence (Scott &Scott, Attorneys at Law, LLP) for Steven Graham and Charles Weinreis. Garrett D. Blanchfield, Jr. (Reinhardt Wendorf & Blanchfield) for Plaintiff's. Barry G. Stratford (Perkins Coie LLP) for Tyson Foods, Inc. Christopher R. Morris (Bassford Remele, P.A.) for JBS S.A. Davida Sheri McGhee (Greene Espel PLLP) for Cargill, Inc.

Companies: Tyson Foods, Inc.; JBS S.A.; Cargill, Inc.

News: Antitrust MinnesotaNews