Agri Stats Loses Motions to Move and Dismiss in Justice Department Antitrust Case

Agri Stats Inc. faces the U.S. Department of Justice and six states that have initiated antitrust proceedings against the company over an alleged conspiracy to share information with major U.S. broiler, pork and turkey processors. This week, U.S. District Judge John Tunheim in Minnesota denied Agri Stat’s motion to transfer to the Northern District of Illinois or the Northern District of Indiana, as well as to dismiss the motion for lack of subject matter jurisdiction and failure to state a claim.

The civil antitrust lawsuit was filed in September and alleged that Agri Stats violated Section 1 of the Sherman Act by collecting, integrating and disseminating competitively sensitive information related to prices, costs and production to competing meat processors. The complaint also alleges that Agri Stats has for years produced comprehensive weekly and monthly reports for participating meat processors, who use the data to set prices and production levels.

Agri Stats argued its domicile and a significant portion of the events or omissions giving rise to the claim did not occur in Minnesota, supporting the transfer request. Tunheim noted that the court did not find this persuasive. The convenience of the parties and witnesses and the interest of justice also do not strongly support the transfer, hence the court dismissed the application.

With respect to the motion to dismiss, Agri Stats disputed the plaintiffs’ claims on various grounds. Agri Stats’ arguments against the pork and turkey claims were based on jurisdiction, and its arguments against the broiler chicken claims were based on a legacy decision.

Agri Stats argued that it stopped publishing its pork and turkey reports in 2019 as evidence that the plaintiffs had not pleaded that they had suffered damages. Additionally, Agri Stats argued that there is nothing in the complaint to indicate that Agri Stats would relaunch such reports or even be able to relaunch them because it would have to retain subscribers to provide their information and purchase any resulting reports. The court disagreed.

“While Agri Stats does not currently report on pork and turkeys and states that there are ‘no current plans to resume reporting on turkeys and pork,’ the ‘scanty statement’ regarding the lack of current plans to resume the contested conduct and the passage of many years since the cessation of the conduct in question conduct is not a sufficient basis for dismissal,” Judge Tunheim wrote.

“In addition, Agri Stats continues to advertise on its website that it “serves customers in the chicken, turkey, commercial egg and swine industries.”

“Furthermore, plaintiffs have provided Agri Stats with sufficient representations of intent to restart pork and turkey reporting in the future. The plaintiffs allege that Agri Stats intends to resume reporting on pork and turkey following the conclusion of the legal proceedings that led to the cessation of production.

Agri Stats also argued that the broiler chicken claim had already been resolved in a prior broiler chicken antitrust proceeding based on the same evidence cited in the complaint and should be dismissed under the doctrine of stare decisis. In September 2023, when the lawsuit was filed, attorney Justin Bernick of Hogan Lovells, who represents Agri Stats in the DOJ case, stated that Agri Stats strongly denies the DOJ’s allegations and pointed to late June 2023 when the claims had already been filed. rejected by U.S. District Court Judge Thomas M. Durkin in the antitrust case In re Broiler Chicken.

Judge Tunheim noted that while the court agreed that uniformity of law should be encouraged wherever possible, it declined to dismiss the lawsuit based on the summary ruling in this case.

Additionally, Bernick noted that the Department of Justice conducted an investigation into agricultural statistics a decade ago and closed it after finding no evidence of impropriety.

“Agri Stats provides an important benchmarking service that helps keep protein production costs and prices low for consumers,” Bernick said. “Since the founding of Agri Stats, protein production has increased significantly, while prices – as well as those for boneless, skinless chicken breasts – have fallen dramatically. The Department of Justice lawsuit threatens to lose these benefits and cause further harm to Americans who already struggle with inflated food costs.”