Daniel L. Warshaw

A long-running antitrust class action alleging price-fixing by poultry producers took an unusual turn in early June 2020 when federal prosecutors criminally indicted some of the same industry executives that Daniel L. Warshaw has been suing for years.

The Pearson Simon & Warshaw LLP name partner said the news was welcome but not entirely a surprise.

"We are co-lead counsel for the direct purchaser class, and as we were litigating the case last year the Department of Justice moved to intervene and asked the judge to stay our case while they got up to speed," Warshaw said.

Often in cases like this, civil class actions are filed only after criminal wrongdoing is exposed by government officials. This time, the civil case came first. "Here, we beat 'em to the punch by a few years," Warshaw said. In re: Broiler Chicken Antitrust Litigation, 1:16-cv-08637 (N.D. Ill., filed Sept. 2, 2016).

The plaintiffs are restaurant companies and other poultry buyers who accuse major chicken farms--including Tyson Foods Inc., Pilgrim's Pride Corp., Koch Foods Inc., Sanderson Farms Inc., Foster Farms LLC, Purdue Farms Inc. and others--of illegally coordinating operations to inflate prices. The upshot, according to Warshaw's complaint: "...a nearly 50% increase in Broiler wholesale prices by one measure since 2008, despite input costs (primarily corn and soybeans) falling roughly 20% to 23% over the same time period." Broilers are chickens raised for meat consumption. The defendants have denied the claims.

The new federal indictment was returned by a federal grand jury in Colorado. In a single count, it names current and former executives at Pilgrim's Pride and Claxton Poultry Farms and alleges they fixed prices and rigged bids from 2012 to 2017. U.S. v. Penn, 20-cr-00152 (D. Colo., filed June 2, 2020).

The indictment reads: "The combination and conspiracy engaged in by the Defendants and co-conspirators was a per se unlawful, and thus unreasonable, restraint of interstate trade and commerce in violation of Section 1 of the Sherman Act..."

"The amount of commerce at stake here is humongous," Warshaw said. "This criminal indictment puts more force behind our civil case. It validates the claims we've been litigating for years. We're here to seek a remedy, and now the other side can no longer roll their eyes and talk about greedy class action lawyers."

Class certification papers are due in September, Warshaw said.

He has similar price-fixing class actions in progress targeting the cattle and pork industries. "I call them the protein cases,' he said.

-- John Roemer