Law 360: Major Meat Cos. Must Face Wage-Fixing Suit In Colo.

Sep 29, 2023

By: Daniel Ducassi

Law360 (September 28, 2023, 8:18 PM EDT) -- A Colorado federal judge has denied bids by major meat producers to toss a putative class action accusing them of illegally coordinating to keep wages in the red meat industry low.

The decision Wednesday by U.S. District Judge Philip A. Brimmer rejected a joint dismissal motion by a group of meat companies that included JBS USA Food Co., Cargill Inc. and Tyson Foods Inc., along with individual motions to dismiss by many of the same companies.

Meat plant workers sued nearly a dozen meat processors in November, alleging they shared compensation studies and data and worked together to ensure uniform pay policies across the industry in violation of federal antitrust laws.

In one of his orders Wednesday, Judge Brimmer concluded that the meat plant workers had plausibly alleged violations of the Sherman Act by meat processors, noting that they claimed processors capped wage increases in parallel with competitors. Beyond that, Judge Brimmer ruled that by alleging the companies exchanged information, communicating with high-level employees, it was enough to make their allegations plausible.

Judge Brimmer rejected arguments from meat companies that the workers hadn't plausibly asserted there were anti-competitive effects, finding that "allegations of specific wage suppression provide sufficient support at the pleading stage for plaintiffs' broader claims of industry-wide wage suppression."

The judge also found that in regards to Seaboard Foods LLC and Triumph Foods LLC, the motion was moot as they've already asked for approval of a settlement. Purdue has also settled claims with workers, including in a similar suit in Maryland.

In another order Wednesday, Judge Brimmer similarly rejected various arguments for why individual companies, such as Smithfield Foods and Hormel, should be able to get out of the case, finding workers' allegations were detailed enough to allege they were part of the conspiracy to keep wages down.

For example, the suit's allegation that Smithfield actively worked to develop a key compensation survey at the start of the alleged wage-fixing conspiracy was enough to surmise that it had participated in the conspiracy.

Judge Brimmer, however, tossed Iowa Premium LLC from the case, at least for now. Judge Brimmer found that the proposed class of meat plant workers hadn't really alleged that the company had conspired with competitors, and couldn't be pulled into the case through allegations against parent company National Beef Packing Co. LLC, which purchased Iowa Premium in 2019.

Representatives for the parties did not immediately respond to requests for comment on Thursday.

The workers are represented by Hagens Berman Sobol Shapiro LLP, Cohen Milstein Sellers & Toll PLLC, Handley Farah & Anderson PLLC, Lockridge Grindal Nauen PLLP and Berger Montague PC.

National Beef Packing Company LLC is represented by Michael F. Tubach, Stephen J. McIntyre, Benjamin G. Bradshaw and Brian P. Quinn of O'Melveny & Myers LLP.

Cargill Inc. and Cargill Meat Solutions Corp. is represented by Jennifer Milici, Mark Ford, John Walsh and Nana Wilberforce of WilmerHale.

Agri Beef Co. and Washington Beef LLC is represented by Timothy R. Beyer and Adam B. Stern of Bryan Cave Leighton Paisner LLP.

American Foods Group LLC is represented by Richard B. Benenson and Emily R. Garnett of Brownstein Hyatt Farber Schreck LLP and David L. Hashmall of Felhaber Larson.

Agri Stats Inc. is represented by William L. Monts III and Peter H. Walsh of Hogan Lovells LLP.

Tyson Foods Inc. is represented by John F. Terzaken, Abigail W. Williams, Laurel Fresquez and Jonathan R. Myers of Simpson Thacher & Bartlett LLP.

Hormel Foods Corp. is represented by Desmonne A. Bennett, Craig S. Coleman, Emily E. Chow, Anderson C. Tuggle, Kathryn E. Bettini, Jacob D. Bylund and Robert C. Gallup of Faegre Drinker Biddle & Reath LLP.

Iowa Premium LLC is represented by Brian Byrne, Carl Lawrence Malm and Blair Kuykendall of Cleary Gottlieb Steen & Hamilton LLP.

JBS USA Food Company is represented by Marc E. Kasowitz, Daniel J. Fetterman, Kenneth R. David, Jonathon Watson and Joseph Hunt of Kasowitz Benson Torres LLP.

Smithfield Foods Inc. and Smithfield Packaged Meats Corp. is represented by Amy B. Manning, Sarah A. Zielinski and Kali M. Yallourakis of McGuireWoods LLP.

Triumph Foods LLC is represented by A. James Spung, Christopher Smith and Sarah Zimmerman of Husch Blackwell LLP.

Seaboard Foods LLC is represented by Chad D. Williams of Davis Graham & Stubbs LLC.

Webber Meng Sahl & Co. is represented by Gerard P. Martin and Jeffrey Marc Lichtstein of Rosenberg Martin Greenberg LLP.

The case is Brown et al. v. JBS USA Food Co. et al., case number 1:22-cv-02946, in the U.S. District Court for the District of Colorado.

--Editing by Alex Hubbard.

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