The opinion
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
IN RE BROILER CHICKEN ANTITRUST No. 16 C 8637
LITIGATION
Judge Thomas M. Durkin
MEMORANDUM OPINION AND ORDER
Plaintiffs1 allege that Rabobank2 conspired with defendant companies in the
poultry industry to limit the supply of chicken meat in violation of the Sherman Act
§ 1. Rabobank has moved to dismiss for failure to state a claim pursuant to Federal
Rule of Civil Procedure 12(b)(6). R. 4369. That motion is granted.
Several years ago, the Court held that the class plaintiffs plausibly alleged a
conspiracy in the poultry production industry to limit supply in order to increase the
price of chicken. See R. 541 (In re Broiler Chicken Antitrust Litig., 290 F. Supp. 3d
772 (N.D. Ill. 2017)). Shortly thereafter, the Court held that the class plaintiffs had
1 According to the Direct Action Plaintiffs’ consolidated complaint, the following
plaintiffs have sued Rabobank: Sysco Corporation; US Foods, Inc.; EMA Foods Co.,
LLC; L. Hart, Inc.; R&D Marketing, LLC; Timber Lake Foods, Inc.; Campbell Soup
Company, and related entities; Target Corporation; McLane Company, Inc. and
related entities; Kinexo, Inc.; John Soules Foods, Inc. and John Soules Acquisitions
LLC; and Red Bird Farms Distribution Company. See R. 4243 at 3-52. The three
classes and more than 100 other Direct Action Plaintiffs have not.
2 By “Rabobank,” Plaintiffs mean: Utrecht-America Holdings, Inc., a Delaware
corporation headquartered in New York, NY, which is the American subsidiary of the
Dutch cooperative banks Cooperative Rabobank U.A. and Rabobank International
Holding, B.V., and the subsidiaries Rabo AgriFinance LLC, a Delaware limited
liability company headquartered in Saint Louis, MO; Rabobank USA Financial
Corporation, a Delaware corporation headquartered in New York, NY; and Utrecht-
America Finance Co., a Delaware company headquartered in New York, NY. See R.
4243 at 121-22 (¶ 240).
also plausibly alleged that industry analyst, Agri Stats, acted as a co-conspirator by
being a conduit of information and communication among chicken producers. See R.
1943 (In re Broiler Chicken Antitrust Litig., 2019 WL 1003111 (N.D. Ill. Feb. 28,
2019)). Plaintiffs allege that Rabobank played a similar role.
In denying the motion to dismiss the claims against Agri Stats, the Court found
that “[i]t is at least plausible (if not likely) that a person who facilitates a conspiracy
knows about the conspiracy and engages in the facilitation knowing of its
consequences.” Id. at *2. Plaintiffs would argue that this finding applies equally to
Rabobank.
It is not surprising, and Rabobank does not dispute that it had frequent
communications across the industry. It is apparently the largest or one of the largest
lenders to chicken producers. Indeed, Plaintiffs have discovered emails in which a
Rabobank director states that he has relayed communications between defendants
Perdue and Pilgrim’s Pride. See R. 4372-5; R. 4372-6; R. 4372-7. These emails raise
the specter of Rabobank serving as a communications conduit akin to Agri Stats.
Rule 12(b)(6), however, does not permit Plaintiffs to chase ghosts. The mere
possibility that the subject matter of Rabobank’s communications was the alleged
conspiracy to reduce supply is insufficient to state a claim. See Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (“The plausibility standard is not akin to a probability
requirement, but it asks for more than a sheer possibility that a defendant has acted
unlawfully. Where a complaint pleads facts that are merely consistent with a
defendant's liability, it stops short of the line between possibility and plausibility of
entitlement to relief.”). The emails are entirely ambiguous as to the subject matter of
the communications they reference. Without knowing this information, Plaintiffs are
asking the Court to infer that Rabobank knew about and communicated with
Defendants about the alleged conspiracy from the unsurprising and unsuspicious fact
that Rabobank communicated with Defendants. There are too many inferences in
that chain of reasoning for it to retain plausibility.
Plaintiffs’ allegations against Agri Stats were much more concrete. Plaintiffs
alleged that Agri Stats “reports are so detailed that the ostensible anonymity of the
information is breached, and Defendants were able to use the reports to communicate
their Broiler production intentions, thereby conspiring to fix Broiler prices.” In re
Broiler Chicken, 2019 WL 1003111, at *1. And since Agri Stats produced the reports,
the Court found it plausible that Agri Stats knew the reports were being used to
facilitate conspiracy. There is no similar factual basis regarding Rabobank’s
communications with Defendants from which the Court can infer that those
communications concerned the alleged supply reduction conspiracy.
The rest of the allegations are even less compelling. Plaintiffs emphasize that
Rabobank campaigned for the industry to reduce production in order to increase
prices. See R. 4243 at 189-92 (¶¶ 576-86). You don’t need to be John Maynard Keynes
to recognize this truism, and simply repeating it without a plausible claim of helping
the producers to coordinate production decreases does not an antitrust violation
make. Encouraging lower production by itself is simply not enough to plausibly
establish liability. See Kleen Prods. LLC v. Int’l Paper, 276 F. Supp. 3d 811, 841 (N.D.
Ill. 2017) (“[T]here is a trade-off between price and volume. If firms want to raise
prices, they have to produce less, sell less, and thereby say ‘no’ to customers. It should
not be a mark of conspiracy to say what is true, already known by the audience, and
articulated by countless third-party analysts, academicians, and jurists alike.”).
Plaintiffs also make much of the fact that Rabobank communicated with Agri
Stats about the need for production cuts. See R. 4243 at 189-90 (¶¶ 577-80). But again,
these communications merely establish that Rabobank had a significant interest in
the industry. None of these communications show that Rabobank was involved in
coordinating production cuts among the producers.
Plaintiffs allegations are all the more insufficient when viewed in the context
of the complaint as a whole. Plaintiffs dedicate only 13 of 1,514 paragraphs to
Rabobank’s conduct. The 425-page complaint provides great detail about the supply
of chicken during the relevant time period and the activities of the defendant chicken
producers and Agri Stats. The most compelling allegations against Rabobank are
based on three emails, which, as discussed, are ambiguous at best. Such sparce
allegations can sometimes be sufficient to state a claim in the right circumstances
and when they permit the necessary inferences. But it is simply not plausible that
Rabobank participated in an extensive conspiracy and left so little evidence of its
participation.
Therefore, Rabobank’s motion is granted, and Rabobank is dismissed without
prejudice. If Plaintiffs discover facts plausibly implicating Rabobank in the
conspiracy, Plaintiffs may amend their complaint. In anticipation of that possibility,
the Court addresses several of Rabobank’s arguments.
First, the Court rejects Rabobank’s argument that “service providers” should
not face antitrust liability for colluding with their clients. See R. 4372 at 14 (quoting
Gulf States Reorganization Grp., Inc. v. Nucor Corp., 822 F. Supp. 2d 1201, 1219 n.18
(N.D. Ala. 2011)). If allegations plausibly demonstrate that a banker, lender,
accountant, lawyer, or other service provider facilitated an unlawful conspiracy
among their clients, the Court does not perceive any precedential danger in holding
that person accountable for their conduct. The force of the allegations controls the
analysis, not the title of the potential defendant.
Next, Rabobank argues that Plaintiffs sued the wrong entities and should have
sued an entity called Coöperatieve Rabobank, U.A., New York Branch. See R. 4372
at 3 n.1; id. at 12. In support of this argument, Rabobank cites a Seventh Circuit
holding that a “complaint based on a theory of collective responsibility must be
dismissed.” R. 4372 at 12 (quoting Bank of Am., N.A. v. Knight, 725 F.3d 815, 818
(7th Cir. 2013)). But the claims are plausibly understood as alleging agency among
the Rabobank entities, not merely collective liability. Similarly, to the extent
Rabobank is correct that Plaintiffs failed to sue the correct entity, that argument
would not necessarily undermine the plausibly of the allegations against the other
related entities.
Lastly, the Court notes Rabobank’s argument that Plaintiffs must have
“nothing to say” because they “used just two-thirds of the pages this Court allows for
response briefs.” See R. 4536 at 2. This argument runs contrary to the opinions of
great thinkers and writers throughout history who believed that brevity and silence
have greater persuasive power, including Blaise Pascal’s apology, “I would have
written a shorter letter, but I did not have the time.” More presently relevant to the
parties, the Court suggests that condemnation of a concise brief is not generally a
winning argument to make to a Court with many hundreds of pages of motions and
briefs to read each week, many in this case alone.
Nevertheless, Rabobank’s motion to dismiss [4369] is granted. The claims
against Rabobank are dismissed without prejudice.
ENTERED:
Knee M Luchor
Honorable Thomas M. Durkin
United States District Judge
Dated: June 1, 2021