IN RE PORK ANTITRUST LITIGATION

UNITED STATES DISTRICT COURT

DISTRICT OF MINNESOTA

IN RE PORK ANTITRUST LITIGATION

Civil No. 18-1776 (JRT/JFD)

This Document Relates To:

MEMORANDUM OPINION AND ORDER

ALL ACTIONS BROUGHT BY DIRECT DENYING DEFENDANTS’ MOTION TO

ACTION PLAINTIFFS DISMISS DIRECT ACTION PLAINTIFFS’

CONSOLIDATED COMPLAINT

Robert N. Kaplan, KAPLAN FOX & KILSHEIMER, LLP, 850 Third Avenue,

Fourteenth Floor, New York, NY 10022; Christopher P. Wilson, BAKER

BOTTS LLP, 700 K Street Northwest, Washington, DC 20001; Samuel

Jarashow Randall, KENNY NACHWALTER, P.A., 1441 Brickell Avenue, Suite

1100, Miami, FL 33131; and Kyle G. Bates, HAUSFELD LLP, 600 Montgomery

Street, Suite 3200, San Francisco, CA 94111, for Direct Action Plaintiffs.

Brian Edward Robison, BROWN FOX PLLC, 6303 Cowboys Way, Suite 450,

Frisco, TX 75034; Emily Elizabeth Chow, FAEGRE DRINKER BIDDLE & REATH

LLP, 90 South Seventh Street, Suite 2200, Minneapolis, MN 55402; Donald

G. Heeman, SPENCER FANE LLP, 100 South Fifth Street, Suite 2500,

Minneapolis, MN 55402; Peter J. Schwingler, JONES DAY, 90 South Seventh

Street, Suite 4900, Minneapolis, MN 55402; William Thomson, STINSON

LEONARD STREET LLP, 50 South Sixth Street, Suite 2600, Minneapolis, MN

55402; John Anders Kvinge, LARKIN HOFFMAN DALY & LINDGREN, LTD.,

8300 Norman Center Drive, Suite 1000, Minneapolis, MN 55437;

Christopher A. Smith, HUSCH BLACKWELL LLP, 8001 Forsyth Boulevard,

Suite 1500, Saint Louis, MO 63105; and Jarod Taylor, AXINN VELTROP &

HARKRIDER, LLP, 90 State House Square, Hartford, CT 06106, for

Defendants.

This multidistrict litigation alleges anticompetitive conduct in the pork packing

industry. Over fifty Direct Action Plaintiffs (“DAPs”) initiated actions against Defendants

Agri Stats, Inc.; Clemens Food Group, LLC, and The Clemens Family Corporation (together,

“Clemens”); Hormel Foods Corporation and Hormel Foods, LLC (together, “Hormel”); JBS

USA Food Company; Seaboard Foods LLC; Smithfield Foods, Inc.; Triumph Foods, LLC; and

Tyson Foods, Inc., Tyson Prepared Foods, Inc. and Tyson Fresh Meats, Inc. (together,

“Tyson”). To better manage this litigation, the Court required the DAPs to file a single

Consolidated Complaint which Defendants moved to dismiss on three grounds: (1) that

the DAPs’ claims are barred by the statute of limitations and they are not tolled either by

American Pipe & Construction Co. v. Utah, 414 U.S. 538 (1974) or under the doctrine of

fraudulent concealment; (2) the DAPs bringing claims under the Packers and Stockyards

Act (“PSA”) lack standing to bring a private cause of action under the PSA; and (3) the

DAPs failed to adequately allege that multi-ingredient products and pork by-products are

subject to the purported conspiracy.

Because the Court finds that the DAPs’ Consolidated Complaint does not foreclose

the possibility of fraudulent concealment and because American Pipe tolling applies to

their Sherman Act claims, the Court finds the DAPs’ claims are not barred by the statute

of limitations. The Court will allow the DAPs’ PSA claims to proceed because they have

plausibly alleged that they were injured by Defendants’ violation of a PSA provision that

relates to livestock. Finally, the Court finds that the DAPs have adequately alleged a

conspiracy to restrict competition in the pork industry, which would plausibly impact the

prices paid for pork for use in multi-ingredient pork products and pork by-products. The

Court will therefore deny Defendants’ Motion to Dismiss in its entirety.

BACKGROUND

I. FACTS

The DAPs are comprised of nine groups of Plaintiffs: Action Meat DAPs, ALDI DAP,

BSF DAPs, CF DAPs, CWT DAPs, Kroger DAPs, Nestlé DAPs; Publix DAPs; and Winn-Dixie

DAPs. (DAPs’ Consolidated Compl. (“Compl.”) at 5–21, Dec. 5, 2022, Docket No. 1659.)

At the time the Consolidated Complaint was filed, there were over sixty DAPs in this

litigation. (Id.) The DAPs allege that Defendants Clemens, Hormel, JBS, Seaboard,

Smithfield, Triumph, and Tyson (collectively, “Packer Defendants”), and Defendant Agri

Stats—along with various co-conspirators—conspired to restrain trade, including to fix,

increase, maintain, and/or stabilize the price of pork sold to the DAPs and others. (Id. ¶

1.) The alleged conspiracy began at least as early as January 2009 and continued until at

least 2018. (Id.)

The parties are familiar with the allegations in this litigation, so the Court will not

reiterate them again here in detail. See, e.g., In re Pork Antitrust Litig., 495 F. Supp. 3d

753, 765–767 (D. Minn. 2020). The DAPs generally claim that Packer Defendants

exchanged detailed, competitively sensitive, and non-public information through Agri

Stats, including prices, capacity, production, sales volume, and demand. (Id. ¶ 3.) Packer

Defendants allegedly used this information collectively with their market control to

unlawfully restrain trade, including to fix, increase, maintain, and/or stabilize the price of

pork sold to the DAPs and others in the United States. (Id. ¶ 1.)

As is relevant for this Motion to Dismiss, the DAPs allege that the Packer

Defendants maintained their conspiracy through both public and non-public statements.

The Packer Defendants publicly declared that they would reduce their herds because such

reductions were “a natural outcome of the economic conditions facing the industry.” (Id.

¶ 7.) They also publicly encouraged other pork producers to decrease supply. (Id. ¶ 6.)

The DAPs allege that the publicly-stated reasons for the herd reduction were untrue and

merely a pretext for them to produce as much pork as possible when profit margins were

positive. (Id. ¶ 7.) Additionally, the Consolidated Complaint alleges that the actual

agreement between Packer Defendants to reduce the supply of pork was “reached in

secret and concealed from the public.” (Id.; see also id. ¶ 391 (“[B]y providing deceptive

and pretextual statements to their customers and to the public in justifying supply cuts

and price increases that were intended to conceal—and did in fact conceal—that these

actions were the result of collusion.”).)

For instance, the DAPs allege that Smithfield’s CEO announced a plan to reduce its

sow herd and urged all others in the industry to follow suit in 2008. (Id. ¶ 6.) Smithfield

confirmed publicly in 2009 that it had reduced the size of its herd by two million hogs

annually, and that it intended to continue reducing its herd. (Id. ¶ 231.) Smithfield’s CEO

later stated that pork producers have been public about “cutting back” their herds. (Id. ¶

305.) Though Smithfield’s public statements indicated that supply reductions were

dictated by economic factors facing pork producers, the DAPs allege that Smithfield’s

internal communications demonstrate this is untrue. (Id. ¶ 291.) For example, the

Executive Vice President of Smithfield emailed the National Pork Board on July 19, 2009,

asking the National Pork Board to help Smithfield coordinate the supply reduction and

stating, “[W]e have too many hogs in the country and need to take 6-8 million market

hogs out of our supply. Cheap corn is likely going to slow liquidation and I don’t think this

is good for the industry over the next 2-5 years.” (Id.) But Smithfield later publicly stated

that the improved hog profitability was not due to the supply decrease, but rather due to

“good programs with our retailers” and “lower grain costs.” (Id. ¶ 439.)

Tyson similarly announced a major sow liquidation in May 2009. (Id. ¶¶ 285–286.)

The DAPs allege there are private emails between Packer Defendants’ executives

discussing Tyson’s sow liquidation. (Id. ¶ 287.) Additionally, Tyson employees allegedly

circulated confidential information from Agri Stats about which specific pork plants were

in Agri Stats’ kill/cut figures, and instructed Tyson employees to keep the information

confidential. (Id. ¶ 434.) A Tyson employee also forwarded an email to other Tyson

employees from Clemens regarding Clemens’ pork processing plants with the instructions

to “read and delete please.” (Id. ¶ 422.) The DAPs allege that other Defendants and pork

producers made similar public statements encouraging pork producers to decrease

supply, while hiding the real reasons for the supply cuts. (E.g., id. ¶ 275.)

The DAPs assert that several trade associations facilitated the collusion: industry

trade associations, trade group meetings, and other events brought together senior

executives from Defendants and co-conspirators and gave them the opportunity to

discuss restricting the pork supply and elevating pork prices. (Id. ¶ 192.) Because

Defendants were already privately exchanging confidential information and publicly

stating their intention to restrict pork supply, the DAPs assert that it is likely that the

Defendants and Co-Conspirators secretly discussed the conspiracy at these trade

meetings. (Id.)

The Packer Defendants and co-conspirators allegedly continued to make public

statements throughout the conspiracy period that communicated their planned supply

restrictions to their competitors. (Id. ¶ 264.) According to the DAPs, the Defendants

exploited these public statements, used them to further the conspiracy, and “couched

the public disclosures in pretext so as to conceal what was really occurring.” (Id.)

II. PROCEDURAL HISTORY

The DAPs initiated these actions in various courts before being transferred to the

District of Minnesota and this multidistrict litigation. For the sake of case management,

the Court required the DAPs to file a single Consolidated Complaint. (Pretrial Order No.

1 at 2, Oct. 4, 2022, Docket No. 1525.) Accordingly, the DAPs filed their Consolidated

Complaint on December 5, 2022. (See generally Compl.) All DAPs brought a cause of

action against Defendants for violating Section I of the Sherman Act. (Id. at 178.) Action

Meat DAPs, Kroger DAPs, and Publix DAPs also allege that all Defendants—except Agri

Stats—violated the Packers and Stockyard Act. (Id. at 181.)

The DAPS alleged in their Consolidated Complaint that their claims are timely. (Id.

at 162–174.) The DAPs assert that American Pipe & Construction Co. v. Utah, 414 U.S. 538

(1974), applies and tolls their claims based on Maplevale Farms, Inc. v. Agri Stats, Inc. et

al., No. 18-1803. (Id. ¶¶ 389–90.) The DAPs also allege that the statute of limitations has

been tolled because the Defendants fraudulently concealed their wrongful conduct. (Id.

¶ 449.)

Defendants each individually answered the Consolidated Complaint on January 20,

2023. (Seaboard’s Answer, Docket No. 1746; Tyson’s Answer, Docket No. 1747; Triumph’s

Answer, Docket No. 1748; Hormel’s Answer, Docket No. 1749; JBS’ Answer, Docket No.

1750; Clemens’ Answer, Docket No. 1752; Agri Stats’ Answer, Docket No. 1753; Smithfield

Foods’ Answer, Docket No. 1760.) Defendants filed a Joint Motion to Dismiss the DAPs’

Consolidated Complaint on the same day they filed their Answers. (Mot. Dismiss DAPs’

Claims, Jan. 20, 2023, Docket No. 1754.) Defendants assert that the DAPs’ claims are

time-barred because more than four years have passed since their causes of action

accrued and that they have not adequately alleged fraudulent concealment. (Mem. Supp.

Mot. Dismiss at 19, Jan. 20, 2023, Docket No. 1756.) They also claim that the DAPs have

no private right of action under the PSA because they do not buy, sell, or handle livestock.

(Id. at 28.) Lastly, Defendants contend that certain DAPs fail to plausibly allege that multi-

ingredient products and by-products were affected by the purported conspiracy. (Id. at

30.) The DAPs oppose Defendants’ motion. (Mem. Opp. Mot. Dismiss, Feb. 28, 2023,

Docket No. 1830.)

DISCUSSION

I. STANDARD OF REVIEW

In reviewing a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the

Court considers all facts alleged in the complaint as true to determine if the complaint

states a “claim to relief that is plausible on its face.” Braden v. Wal-Mart Stores, Inc., 588

F.3d 585, 594 (8th Cir. 2009) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). At the

motion to dismiss stage, the Court may consider the allegations in the complaint as well

as “those materials that are necessarily embraced by the pleadings.” Schriener v. Quicken

Loans, Inc., 774 F.3d 442, 444 (8th Cir. 2014).

“A claim has facial plausibility when the plaintiff pleads factual content that allows

the court to draw the reasonable inference that the defendant is liable for the misconduct

alleged.” Iqbal, 556 U.S. at 678. The Court construes the complaint in the light most

favorable to the plaintiff, drawing all inferences in the plaintiff’s favor. Ashley Cnty. v.

Pfizer, Inc., 552 F.3d 659, 665 (8th Cir. 2009). Although the Court accepts the complaint's

factual allegations as true and construes the complaint in a light most favorable to the

plaintiff, it is “not bound to accept as true a legal conclusion couched as a factual

allegation.” Papasan v. Allain, 478 U.S. 265, 286 (1986). In other words, a complaint

“does not need detailed factual allegations” but must include more “than labels and

conclusions, and a formulaic recitation of the elements” to meet the plausibility standard.

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).

A Rule 12(b)(6) motion to dismiss cannot be considered after an answer has been

filed in response to the complaint. See Westcott v. City of Omaha, 901 F.2d 1486, 1488

(8th Cir. 1990). However, Rule 12(h)(2) provides that “[a] defense of failure to state a claim

upon which relief can be granted” may be advanced in a motion for judgment on the

pleadings under Rule 12(c). St. Paul Ramsey Cnty. Med. Ctr. v. Pennington Cnty., 857 F.2d

1185, 1187 (8th Cir. 1988); Fed. R. Civ. P. 12(h)(2). Rule 12(c) motions are reviewed under

the same standard that governs 12(b)(6) motions, so this distinction is “purely formal”

and need not affect a court’s analysis. See Westcott, 901 F.2d at 1488.

II. ANALYSIS

Most Defendants filed their Answers to the DAPs’ Consolidated Complaint before

the Joint Motion to Dismiss was filed. The Court will therefore treat this motion as a Rule

12(c) motion, which applies the same standard of review as a Rule 12(b)(6) motion. The

Court will first determine whether this action is timely before turning to the PSA claims

and the multi-ingredient pork products and pork by-products issue.

A. Statute of Limitations

First, Defendants contend that the DAPs’ Sherman Act and PSA claims are time-

barred. The statute of limitations is typically an affirmative defense, and an argument

that claims are time-barred is not ordinarily grounds for a Rule 12(b)(6) dismissal unless

the complaint itself establishes the defense. In re Pork Antitrust Litig., 495 F. Supp. 3d at

772 (citing Jessie v. Potter, 516 F.3d 709, 713 n.2 (8th Cir. 2008)). Thus, at the motion to

dismiss stage, the Court need only consider whether the DAPs’ Consolidated Complaint

affirmatively establishes that their claims are time-barred.

The limitations period for any claims for damages under the Sherman Act and the

PSA is four years. 15 U.S.C. § 15b; Jackson v. Swift Eckrich, Inc., 53 F.3d 1452, 1460 (8th

Cir. 1995). The period begins to run when a defendant commits the injurious act. Zenith

Radio Corp. v. Hazeltine Rsch., Inc., 401 U.S. 321, 338 (1971). A continuing violation

restarts the statute of limitations period each time the defendant commits a new and

independent act that inflicts new and accumulating injury on the plaintiff. In re Pre-Filled

Propane Tank Antitrust Litig., 860 F.3d 1059, 1063 (8th Cir. 2017) (en banc).

Here, the DAPs allege that Defendants’ conspiracy began “at least as early as

January 2009.” (Compl. ¶¶ 1, 14.) The first DAP in this litigation did not file its complaint

until 2019. The statute of limitations therefore provides that DAPs cannot recover for any

claims arising prior to 2015. The DAPs do not dispute Defendants’ contention that their

claims are predicated on pork purchases outside of the four years preceding 2019, and

thus fall outside of the statute of limitations. However, they assert that the statute of

limitations is tolled under two doctrines: (1) fraudulent concealment and (2) American

Pipe & Construction Co. v. Utah, 414 U.S. 538 (1974). The Court will address each doctrine

in turn.

1. Fraudulent Concealment

The statute of limitations is tolled if the DAPs demonstrate that the Defendants

fraudulently concealed the conspiracy. To invoke fraudulent concealment, DAPs must

allege facts showing “(1) Defendants’ concealment of [DAPs’] cause of action, (2) failure

by [DAPs] to discover the existence of their cause of action, and (3) due diligence by

[DAPs] in attempting to discover the claim.” In re Milk Prod. Antitrust Litig., 84 F. Supp.

2d 1016, 1022 (D. Minn. 1997), aff’d, 195 F.3d 430 (8th Cir. 1999). The DAPs must also

meet Rule 9(b)’s heightened pleading standard, such that the DAPs must plead “the who,

what, when, where, and how” of the concealment. Summerhill v. Terminix, Inc., 637 F.3d

877, 880 (8th Cir. 2011); see also In re Milk, 84 F. Supp. 2d at 1022 (discussing the

application of Rule 9(b)). The Eighth Circuit requires “an act of affirmative

misrepresentation over and above the acts creating the alleged cause of action.”

Ripplinger v. Amoco Oil Co., 916 F.2d 441, 442–43 (8th Cir. 1990) (emphasis added).

“Simply denying the existence of an antitrust violation does not constitute fraudulent

concealment, and to hold otherwise ‘would effectively nullify the statute of limitations in

these cases.’” In re Milk, 84 F. Supp. 2d at 1023 (quoting Pocahontas Supreme Coal Co. v.

Bethlehem Steel Corp., 828 F.2d 211, 218–19 (4th Cir. 1987)).

a. Concealment

First, Defendants assert that the DAPs have not alleged concealment because the

DAPs claim that Packer Defendants carried out a conspiracy via public statements, which,

by their very nature, are not concealed.

Two years ago, this Court held that Class Plaintiffs failed to adequately allege

fraudulent concealment, so their claims arising from conduct from more than four years

prior to filing were barred. The Court explained that “the heart of the complaint is that

this conspiracy was agreed to and conducted in part via public statements between the

Defendants" and that it was difficult to reconcile that with the assertion that Defendants

were also concealing the conspiracy. In re Pork, 495 F. Supp. 3d at 774. Critically, Class

Plaintiffs also did not meet the heightened pleading standard of Rule 9(b) because they

failed to provide sufficient information regarding the “who, what, when, where, and how”

that could lead the Court to “plausibly assume that the Defendants engaged in a

fraudulent concealment campaign.” Id. at 774.

Here too, the DAPs allege that Packer Defendants made public statements

regarding their intent—and encouragement of others—to reduce their herds. But unlike

the Class Plaintiffs, “the heart of” the DAPs’ complaint is not that the conspiracy was

agreed to and conducted via public statements. Id. Rather, the heart of the DAPs’

complaint is that the Defendants’ public statements were merely a pretextual justification

for the supply reduction. (Compl. ¶ 7.) Defendants allegedly “exploited these public

statements” to further the conspiracy while concealing what they were really doing. (Id.

¶ 264.)

Additionally, unlike the Class Plaintiffs, the DAPs’ Consolidated Complaint details

the “who, what, when, where, and how” of the fraudulent concealment such that they

comply with Rule 9(b). They provide specific examples of affirmative acts taken to conceal

the conspiracy. For example, the DAPs identify many emails between Defendants’

leadership in great detail. (E.g., id. ¶ 393 (“Bret Getzel from Seaboard confirmed H1N1’s

short term impact on the pork market in a May 21, 2009 email to Chuck Faughnan, where

he told him ‘There was some very short term weakness in the market as a result of the

H1N1 negative press, but this came and went pretty fast.’”).) The Consolidated Complaint

includes quotes from confidential slide deck presentations alluding to the alleged

conspiracy. (E.g., id. ¶ 394 (detailing what was included in presentation slides Hormel

gave to their sales team to “get everyone on the same page to justify their price

increase”).) The DAPs quoted internal communications circulated within the individual

Defendants’ organizations. (E.g., id. ¶ 403 (alleging that Seaboard executives received an

email from a sales broker that included a spreadsheet of competitors’ pricing and

cautioned, “I got this from a source for you to help see the most current on the SBR

competition. Please guard it carefully.”).) The DAPs provide numerous other examples

of emails, meetings, and secretive information sharing between Defendants. (E.g., id. ¶

409 (detailing the communications between JBS’ Vice President of Sales and a senior sales

executive at Indiana Packers).) The majority of these allegations are dated, include the

format in which the communication was made (such as email), and directly quote the

communication. (See, e.g., id.)

Moreover, the DAPs allege specific examples of affirmative acts taken to conceal

the conspiracy, such as destroying evidence,1 marking collusive communications as

“confidential”;2 establishing rules for their trade association that prohibited attribution

of statements to meeting attendees;3 limiting attendance at conspiracy meetings;4

limiting the number of individuals who knew competitors’ confidential information;

communicating by telephone to avoid creating a paper trail;5 communicating in code;6

1 “[A Tyson employee] then forwarded [a June 21, 2010 email containing JBS pricing

information] on to several senior Tyson executives, stating ‘competitive info — read and delete.’”

(Compl. ¶ 311.)

2 “Tyson executives also repeatedly urged confidentiality and discretion in not disclosing

that they had deanonymized the reports. In an August 2012 email, a Tyson Fresh Meat VP writes

that the Agri Stats ‘“name assignment” appears to be consistent with prior months’ and goes on

to advise email recipients ‘[b]e very confidential with this!!!!’ Similarly, a January 2012 email from

Tyson’s Deb McConell to multiple executives states ‘DO NOT FORWARD...DO NOT

DISTRIBUTE...First tab- competitor- lists all 11 Agristats participants plus SL.... Each non-tyson

participant on this file with 'name' is a best guess (basis KPI tracking).’” (Compl. ¶ 140.)

3 “Defendants began to use their positions on the AMI and the Twenty-First Century Pork

Club (‘Pork Club’) to coordinate supply cuts that could not be achieved in the absence of collusion.

Defendants and Co-Conspirators affirmatively shaped the rules of these organizations to conceal

the way they were using them to coordinate the supply reductions (and thus hide the existence

of the conspiracy. For example, the Pork Club had a rule prohibiting meeting attendees from

attributing comments to specific speakers that attended their meetings.” (Compl. ¶ 265.)

4 “Beginning in 2012, the Pork Club added a ‘Just Pigs’ meeting limited to just pork

producers. This was intended to facilitate ‘informal roundtable’ discussions amongst the

competitors. Legal counsel did not attend these meetings.” (Compl. ¶ 410.)

5 “On June 9, 2017, Dan Groff of Clemens emailed internally several senior executives and

reported on a conversation he had with Gary Louis of Seaboard about the production plans and

slaughter numbers for Seaboard and Triumph. Groff noted that he ‘kept this DL list relatively

small because there are a few sensitive things on here, so if you want to share anything specific,

please copy/paste to a separate message.’” (Compl. ¶ 423.)

6 “On May 22, 2015, Hormel’s Cory Bollum emailed Tyson’s Todd Neff, asking Neff to give

Bollum a call. Neff—whose telephone records show myriad communications with senior

executives at Smithfield (including Duane Diez, with whom he exchanged over two thousand calls

and text messages from 2008 to 2017, and Joe Weber), Seaboard (including Terry Holton and

CEO Duke Sand), JBS (Tim Uber, Brad Lorenger ,[sic] and Jerry Brooks) and Hormel—had an

allocating market share;7 and making knowingly false representations to customers about

the reasons for supply shortages and price increases.8 Even if Defendants’ alleged

pretextual statements alone do not amount to fraudulent concealment, the DAPs have

adequately pled other specific acts that Defendants committed with “the sole purpose of

concealing a conspiracy.” In re Milk, 84 F. Supp. 2d at 1023.

Defendants contend that keeping their internal communications private does not

constitute an affirmative act of concealment because Defendants have no obligation to

disclose their various communications to the DAPs. Defendants rely heavily on the Sixth

Circuit’s unpublished decision in Premium Properties Unlimited, LLC v. Mercantile Bank

Mortgage Company, LLC, 732 Fed. App’x 414, 417–18 (6th Cir. 2018). However, the Court

finds that this case is more akin to In re Wirebound Boxes Antitrust Litig., 128 F.R.D. 262

‘interesting call’ with Bollum, who appeared to have stated Hormel’s displeasure with customer

‘W,’ which is a likely reference to Wal Mart.” (Compl. ¶ 351.)

7 “On October 19, 2011, Indiana Packers’ Doug Lorenger again emailed his brother Brad

at JBS about boneless loins, asking ‘rumor has it that JBS has sold bnls loins @ 1.80 fob for 2nd

week of Nov is that true?’ Brad immediately forwarded his brother’s question to Tim Uber, his

boss at JBS. That same day, Tyson executive Todd Neff emailed several colleagues that Tyson had

‘earned the right to get our fair share of the slaughter since we are performing well versus the

industry, I.e., making the other guys cut back’ signing off the email by noting that ‘I trust you’ll

read and delete and not repeat this.’” (Compl. ¶ 322.)

8 “For example, producers claimed that decreased supply and higher prices were caused

by the H1N1 outbreak. But a National Pork Board customer tracking research report dated May

6, 2009, stated that ‘The overall perception of the safety of pork remains in a good trajectory’

and that ‘Among pork consumers, we continue to see purchase intent stabilizing....’ And, Bret

Getzel from Seaboard confirmed H1N1’s short term impact on the pork market in a May 21, 2009

email to Chuck Faughnan, where he told him ‘There was some very short term weakness in the

market as a result of the H1N1 negative press, but this came and went pretty fast. The market

had pretty much recovered by 05/08.’” (Compl. ¶ 393.)

(D. Minn. 1989). The Wirebound plaintiffs alleged that the defendants used “various

secretive means of communication in establishing and maintaining their unlawful

activity,” such as circulating “rules,” “avoiding the use of telephones,” and marking

correspondence as “personal and confidential.” Id. at 266. They also alleged that trade

association meetings were a pretext for defendants’ secret meetings regarding the

conspiracy. Id. The District of Minnesota found these assertions sufficient to plead tolling

of the statute of limitations by means of fraudulent concealment. Id. at 267.

The DAPs here have similarly alleged secret communications, rules for the

conspiracy, avoiding the use of work emails and telephones, marking correspondence as

confidential—with explicit instructions to delete after reading—and using trade

association meetings as a coverup for conspiratorial communications. In fact, the DAPs’

Consolidated Complaint includes significantly more detailed allegations of fraudulent

concealment than what the plaintiffs alleged in Wirebound. The truth of their assertions

is a matter best left for discovery.

Defendants also argue that secret meetings also do not constitute acts of

concealment. Defendants rely on In re Milk Products Antitrust Litigation, in which the

court held that “‘clandestine meetings’ at which price fixing was discussed” did not

constitute acts of concealment. 84 F. Supp. 2d at 1023. However, Defendants’ reliance

on In re Milk is misplaced because the key issue there was that the plaintiffs did not

“allege a specific time that Defendants affirmatively concealed the existence of a

conspiracy.” Id. In contrast, the DAPs have alleged ways in which the Defendants

affirmatively sought to keep their meetings secret, such as limiting who could attend.

(Compl. ¶ 410 (noting that legal counsel did not attend the Pork Club meetings).)

Moreover, the Consolidated Complaint details many other ways that Defendants

affirmatively concealed the conspiracy, such as instructing colleagues to conceal or delete

evidence, to not forward confidential information beyond a small group of senior

executives, and to communicate using Defendants’ personal email accounts. (Compl. ¶

400.) Even if the secret meetings that took place at trade and industry conferences alone

do not constitute affirmative acts of concealment, the Court must consider the

Consolidated Complaint in its entirety. Braden, 558 F.3d at 594. The DAPs allege many

other ways in which Defendants took affirmative acts to conceal their conspiracy.

Defendants also assert that the allegedly pretextual public statements do not

satisfy the fraudulent concealment requirements because the DAPs have not alleged that

the statements were actually communicated to them. See Litovich v. Bank of Am. Corp.,

568 F. Supp. 3d 398, 434 (S.D.N.Y. 2021) (“[C]ommunications to the community at large

will not generally support a finding of fraudulent concealment.”). But Defendants have

not provided any binding precedent for this presumption, and the Court finds this

rationale ill-suited for grounds for dismissal at this stage in the litigation because bar by

statute of limitations is an affirmative defense that a defendant must prove. Jessie, 516

F.3d at 713 n.2. Rule 12(b)(6) dismissal is not appropriate unless a complaint completely

rules out tolling of statute of limitations. Varner v. Peterson Farms, 371 F.3d 1011, 1017–

18 (8th Cir. 2004). The DAPs’ Consolidated Complaint does no such thing.

The Court finds that the DAPs’ Consolidated Complaint sufficiently pleads that

Defendants fraudulently concealed their actions.

b. Failure to Discover

Second, the DAPs must allege that they failed to discover their cause of action

earlier. The DAPs assert that because of the Defendants’ and their co-conspirators’

affirmative acts of concealment, “each Plaintiff did not have actual or constructive

knowledge of its claims alleged in this Complaint, or the facts that might reasonably have

led any Plaintiff to discovery or suspect that it had at least Sherman Act claims against

Defendants and Co-Conspirators prior to June 24, 2014.” (Compl. ¶ 445.) Defendants do

not challenge that DAPs have adequately alleged this element, and the Court finds it

sufficiently satisfied here.

c. Due Diligence

Third, the DAPs must allege that they exercised due diligence in attempting to

discover their claims. The due diligence inquiry employs a reasonableness standard. See

Great Rivers Coop. of Se. Iowa v. Farmland Indus., Inc., 120 F.3d 893, 897 (8th Cir. 1997)

(“A victim must be aware of some suspicious circumstances, some ‘storm warnings,’ to

trigger the duty to investigate.”) (quoting Davidson v. Wilson, 973 F.2d 1391, 1402 (8th Cir.

1992)). The Court has previously explained that “[a]lthough public statements made by

the Defendants could have tipped off a savvy consumer to the conspiracy, that does not

mean that a reasonable person must have discovered the conspiracy through the

statements.” In re Pork, 495 F. Supp. 3d at 774.

Here, the DAPs allege that they exercised due diligence to ensure that they

received competitive pricing for pork. For example, the DAPs allege that they each used

a method of purchasing pork that led them to believe in good faith that they were

receiving competitive prices, such as seeking price quotes and bids from suppliers, and

investigating reasonably available public information. (Compl. ¶ 448.) While the

Consolidated Complaint does not detail each method used by each DAP, the Court finds

this sufficient at the motion to dismiss stage.

Defendants assert that the DAPs should be held to a higher due diligence standard

because they are sophisticated businesses that purchase millions of dollars of pork every

year. See Hope v. Klabal, 457 F.3d 784, 792 (8th Cir. 2006) (holding a sophisticated party

to a higher due diligence standard in a fraud claim). However, Hope v. Klabal, is

distinguishable and this argument is unpersuasive. The DAPs provided examples of how

some DAPs were diligent in seeking information to ensure that it received competitive

pricing for pork. (Compl. ¶ 448.) This is sufficient to plausibly allege due diligence.

In sum, the Court finds that DAPs have adequately alleged fraudulent concealment

such that the statute of limitations is tolled. Whether their allegations are supported by

facts is an inquiry best resolved through discovery and addressed later in this litigation.

The Court therefore declines to dismiss the DAPs’ Consolidated Complaint on statute of

limitations grounds.

2. American Pipe Tolling

For the sake of completeness, the Court will also consider whether the DAPs’

claims are tolled under American Pipe, 414 U.S. at 538. The Supreme Court in American

Pipe explained that where a class action is not certified because the proposed class is not

sufficiently numerous, “the commencement of a class action suspends the applicable

statute of limitations as to all asserted members of the class who would have been parties

had the suit been permitted to continue as a class action.” Id. at 553–54. The purpose of

statutes of limitations are to “ensur[e] essential fairness to defendants” and to bar

plaintiffs who have “slept on [their] rights.” Id. at 554–55. The Court concluded that

tolling did not frustrate these rights in American Pipe because the filing of the class action

“notifie[d] the defendants . . . of the substantive claims.” Id. The Supreme Court later

explained that “the tolling effect given to the timely prior filings in American Pipe . . .

depended heavily on the fact that those filings involved exactly the same cause of action

subsequently asserted.” Johnson v. Ry Express Agency, Inc., 421 U.S. 454, 467 (1975)

(emphasis added).

The Eighth Circuit has accordingly limited American Pipe tolling to later-filed

claims that “are the same” as those pleaded in the earlier-filed class action. Zarecor v.

Morgan Keegan & Co., Inc., 801 F.3d 882, 888 (8th Cir. 2015). Following that line of

reasoning, it held that American Pipe tolling does not apply where a plaintiff brought

claims under Section 10 of the Securities and Exchange Act, New Jersey securities law,

and Arkansas security law, when the prior class action was based on provisions of the

Securities Exchange Act other than Section 10. Id. at 885–86, 888.

Here, the Maplevale class action was filed on June 29, 2018. (No. 18-1803, Compl.,

June 29, 2018, Docket No. 1.) This could render timely any claims that accrued after June

29, 2014. But the Maplevale complaint only brought claims for violating Section 1 of the

Sherman Act—not the Packers and Stockyards Act. (See id. at 44–46.) Because the PSA

is not “exactly the same cause of action” that was asserted in Maplevale, American Pipe

tolling does not apply to the PSA claims. Only the Sherman Act claims are tolled under

American Pipe.

Moreover, the Maplevale complaint defined pork as “pig meat purchased fresh or

frozen, smoked ham, sausage and bacon.” (Id. ¶ 2 n.1.) In contrast, the DAPs’

Consolidated Complaint defines pork to include a variety of meat products from pigs

“purchased fresh, frozen, processed, rendered or non-rendered, including but not limited

to any and all processed pork products, (e.g., smoked ham, sausage, bacon, pepperoni,

lunch meats), and other processed products and by-products containing pork.” (Compl.

¶ 1 n.4.) The DAPs have a broader definition of pork that includes products not covered

in the Maplevale complaint, meaning these are not “exactly the same cause[s] of action”

asserted in Maplevale. Any claims to injury related to pork products beyond “pig meat

purchased fresh or frozen, smoked ham, sausage and bacon” are therefore not tolled

under American Pipe.

All of the DAPs’ claims are tolled by fraudulent concealment, and American Pipe

likewise tolls the statute of limitations for DAPs’ claims arising under Section 1 of the

Sherman Act that pertain to the narrower definition of pork used in the Maplevale

complaint. The Court therefore concludes that the DAPs’ action is sufficiently timely.

B. Packers and Stockyards Act Claims

Next, Defendants assert that the DAPs cannot sustain a private right of action

under the Packers and Stockyards Act (“PSA”). Section 192 of the PSA enumerates several

unlawful practices for packers “with respect to livestock, meats, meat food products, or

livestock products.” 7 U.S.C. § 192. One such unlawful practice is to conspire to

“manipulate or control prices.” 7 U.S.C. § 192(f). The PSA also contains a provision

granting a private right of action in certain circumstances. In relevant part, Section 209

states that:

If any person subject to this chapter violates any of the

provisions of this chapter . . . relating to the purchase, sale,

or handling of livestock, the purchase or sale of poultry, or

relating to any poultry growing arrangement or swine

production contract, he shall be liable to the person or

persons injured thereby for the full amount of damages

sustained in consequence of such violation.

7 U.S.C. § 209(a)(emphasis added). Such liability can be enforced by suit in any district

court of the United States. 7 U.S.C. § 209(b).

Defendants read Section 209 to mean that DAPs cannot sustain an action under

the PSA because they are not purchasers of “livestock.”9 However, whether the DAPs

purchase livestock or meat food products is irrelevant. A plaintiff has a cause of action

under the PSA as long as they were injured by a defendant’s violation of a PSA

“provision . . . relating to the purchase, sale, or handling of livestock.” 7 U.S.C. § 209(a).

The plaintiffs’ injury need not relate to the purchase of livestock—only the PSA provision

that the defendant violated does. There is no requirement for the plaintiff other than

that they sustained injuries “in consequence of such violation.” Id.

Here, the DAPs have alleged that Defendants “conspired to restrain trade,

including to fix, increase, maintain and/or stabilize the price of pork.” (Compl. ¶ 1.) If

true, this would mean that Defendants violated Section 192(f) of the PSA, which makes it

unlawful for packers to conspire to manipulate or control prices of meat food products.

Section 192 is a PSA provision that is “relating to the purchase, sale, or handling of

livestock” because Section 192 explicitly applies with respect to, inter alia, livestock. See

7 U.S.C. § 192 (“It shall be unlawful for any packer or swine contractor with respect to

livestock . . . to . . . .”) Because the DAPs have alleged that they were injured by

9 The PSA defines “livestock” as “cattle, sheep, swine, horses, mules, or goats—whether

live or dead.” 7 U.S.C. § 182(4). In contrast, “meat food products” are defined as “all

products and byproducts of the slaughtering and meat-packing industry—if edible.” 7

U.S.C. § 182(3). Based on the facts alleged in the Consolidated Complaint, DAPs likely

purchase “meat food products”—not livestock—because pork is edible.

Defendants’ violation of a PSA provision that is relating to the purchase, sale, or handling

of livestock, they can sustain a cause of action against Defendants under the PSA. 7 U.S.C.

§ 209(a).

Defendants argue that the legislative history of the PSA demonstrates it was only

intended to protect livestock producers, not meat product purchasers. See, e.g., H.R. Rep.

No. 94-1043, at 4–5 (1973) ( “[The livestock producer’s] livestock may represent his entire

year’s output. And, if he is not paid, he faces ruin.”) However, the Court need not

consider the PSA’s legislative history here because it finds that the PSA is not ambiguous.

See Fla. Power & Light Co. v. Lorion, 470 U.S. 729, 737 (1985) (considering “relevant

legislative history” such as “congressional purposes” because a statute was “ambiguous

on its face”). Based on its clear language, the PSA does not limit who can bring a cause of

action under the PSA—only who it may be brought against. It is unambiguous in this

regard.

Because the DAPs have adequately alleged that they were injured by Defendants’

violation of Section 192(f), which is a provision that relates to the purchase, sale, and

handling of livestock, they can bring a cause of action against Defendants under the PSA.

The Court will therefore allow the DAPs’ PSA claims proceed.

C. Multi-Ingredient Products and By-Products

Lastly, Defendants assert that certain DAPs fail to plausibly allege that multi-

ingredient products and by-products were affected by the purported conspiracy. The

DAPs define “pork” to include “processed products and by-products containing pork.”

(Compl. ¶ 1 n.4.) “Pork by-products” may include “offal and individual parts of organs

from pigs used in pet foods (e.g. livers, kidneys, lungs, hearts, cheeks) and/or rendered

products (e.g., meat meals and bone meals).” (Id.) The DAPs do not specifically mention

multi-ingredient pork products or by-products outside of their single definition of “pork.”

Defendants urge the Court to dismiss the DAPs’ claims arising out of the purchase

of multi-ingredient pork products and pork by-products. However, the Court has not

required the parties in this litigation to make specific allegations pertaining to each and

every type of processed pork at the motion to dismiss stage. Moreover, the DAPs have

alleged a conspiracy to fix the price of pork. If that conspiracy is plausible, then it is

likewise plausible that multi-ingredient pork products and pork by-products would be

impacted. As the Third Circuit has recognized, antitrust law should not be construed so

that it may be “easily evaded” by allowing “the price-fixer of a basic commodity to escape

the reach of a [] penalty simply by incorporating the tainted element into another

product.” In re Sugar Indust. Antitrust Litig., 579 F.2d 13, 18 (3d Cir. 1978).

To the extent that Defendants assert the DAPs’ allegations do not support a

conspiracy for multi-ingredient products because pork is a commodity product, while

multi-ingredient products like pork burritos are not commodity products, the Court finds

that issue is better addressed at summary judgment than at the motion to dismiss stage.

The issue will depend heavily on market variables and the interchangeability of goods,

which are fact-intensive inquiries. See In re TFT-LCD (Flat Panel) Antitrust Litig., 586 F.

Supp. 2d 1109, 1118 (N.D. Cal. 2008) (denying a motion to dismiss “[t]o the extent that

defendants raise questions about the scope of the market” because that is a factual

question).

Lastly, Defendants contend that the DAPs do not allege that Defendants have

market control over multi-ingredient products and pork by-products. However, the DAPs

assert that Defendants and their Co-Conspirators “control and dominate the market for

the production and sale of pork products in the U.S.” (Compl. ¶ 2 (emphasis added).)

“Pork products” could plausibly include products that incorporate pork, such as multi-

ingredient pork products and pork by-products. The DAPs also assert that during the

conspiracy “there was increased control over the breeding, production, growing, and

processing of pork by the Packer Processor Defendants and Co-Conspirators through

vertical integration and exclusive production contracts with hog farmers.” (Compl. ¶

163.) It is quite plausible that such vertical integration extends into multi-ingredient

products and by-products. Whether Defendants actually had control over the market for

pork that was specifically used in multi-ingredient pork products and pork by-products is

a question of fact not to be decided at the motion to dismiss stage.

Because the DAPs have sufficiently pled that Defendants manipulated the price of

pork, which would logically include the pork used in multi-ingredient pork products and

pork by-products, the Court will deny Defendants’ Joint Motion to Dismiss in this regard.

CONCLUSION

Because the DAPs have adequately pled fraudulent concealment and their

Sherman Act claims are tolled under American Pipe, the Court finds that their claims are

not barred by the statute of limitations and will deny Defendants’ Joint Motion to Dismiss

based on timeliness. The Court will also deny Defendants’ Joint Motion to Dismiss as it

pertains to DAPs’ claims arising for multi-ingredient pork products and pork by-products

because DAPs have adequately alleged that Defendants conspired to fix the price of pork,

which would plausibly include the price of pork used in multi-ingredient products and by-

products. Finally, the Court will allow the DAPs’ PSA claims to proceed because they have

plausibly alleged that they were injured by Defendants’ violation of a PSA provision that

relates to livestock. The Court will therefore deny Defendants’ Motion to Dismiss in its

entirety.

ORDER

Based on the foregoing, and all the files, records, and proceedings herein, IT IS

HEREBY ORDERED that Defendants’ Joint Motion to Dismiss [Docket No. 1754] is DENIED.

DATED: September 26, 2023 □ deGan. (rsh

at Minneapolis, Minnesota. JOHN R. TUNHEIM

United States District Judge

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