Chicken Criminal Price-Fixing Case Heats Up

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As the Bilzin Sumberg team previously reported in June 2020, the Department of Justice (DOJ) indicted four executives from Pilgrim’s Pride and Claxton Poultry for their participation in a conspiracy to fix prices and rig bids of broiler chicken products.

That indictment alleged that from at least 2012 through at least 2017, Pilgrim’s, Claxton, and at least five other unnamed chicken suppliers participated in a conspiracy to exchange confidential pricing information and rig bids to some of their largest customers, including quick-service restaurants and grocery chains.

On October 6, 2020, the DOJ issued a superseding indictment, which expanded both the number of companies involved and the scope of conduct.

Specifically, the superseding indictment charged six additional individuals with participating in the conspiracy: Bill Lovette, the former CEO of Pilgrim’s Pride, who retired in March 2019; Timothy Mulrenin, a Perdue Farms executive who previously worked at Tyson; William Kantola, an executive at Koch Foods; Jimmie Little, a former Pilgrim’s sales director; Gary Brian Roberts, an employee at Case Farms who previously worked at Tyson, and Rickie Blake, a former director, and manager at George’s Inc.

The superseding indictment also expand ed the number of chicken manufacturers involved in the conspiracy. In addition to the individuals from Pilgrims, Claxton, Tyson, Perdue, Koch, Case, and George’s, three other unnamed suppliers were also listed, bringing the number of companies involved in the conspiracy to 10. The conspiracy period was also extended through at least 2019.

One of the indicted individuals, Jimmie Little from Pilgrim’s, was also charged with making false statements to the DOJ and obstruction of justice.

One week later, on October 13, 2020, the DOJ issued a criminal information against Pilgrim’s Pride Corporation. The information charges Pilgrim’s with entering into and engaging in a “continuing combination and conspiracy to suppress and eliminate competition by rigging bids and fixing prices and other price-related terms for broiler chicken products sold in the United States” from 2012 through at least 2019.

The next day, Pilgrim’s announced that it had reached a plea agreement with the DOJ. While that plea agreement has not yet been made public, it is reported that the agreement includes Pilgrim’s payment of a $110 million criminal fine. On November 2, 2020, Pilgrim’s is scheduled to appear in court for its plea hearing.

Shortly after filing the superseding indictment, the DOJ notified Judge Durkin, in the Northern District of Illinois, of the new charges. Judge Durkin is presiding over an ongoing consolidated civil action filed by several class action and opt-out plaintiffs against the indicted chicken suppliers and several other suppliers. Plaintiffs in the civil case include restaurants, grocers, and other chicken purchasers. The allegations in that case include price fixing and bid rigging to Plaintiffs.

The DOJ’s investigation into the chickens industry remains ongoing. Bilzin Sumberg will continue to provide updates regarding both the criminal and civil actions.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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