Pilgrim’s Pride agrees to $100M settlement in price-fixing lawsuit

GREELEY — Pilgrim’s Pride Corp. (Nasdaq: PPC) has agreed to pay $100 million in a settlement with broiler chicken growers across the country to close out a six-year price-fixing lawsuit alleging that the company conspired with other chicken processors to orchestrate lower prices.

But don’t let that number sparkle too much. The amount is a fraction of what the 23,750 plaintiffs in the broiler chicken’s case sought, and final amounts to each claimant will not be known until legal and attorney fees are taken off the top, according to a proposed settlement notification plan. Those with valid claims will have to apply for their portion of the settlement. A final hearing on the matter may take place in December or January 2025, according to a proposal filed in court.

The deal was reached in June, but the documents in the case were not available until they were filed in court on Aug. 16. Responses to motions for disbursement of settlement funds and approval of settlement and distribution plans are due Aug. 30.

Former defendants Tyson Foods, Koch, Perdue Foods and others settled for tens of millions of dollars while also denying wrongdoing, leaving Pilgrim’s the sole defendant. In early May, U.S. District Court judge Robert Shelby, sitting in Oklahoma’s Eastern District federal court, certified the case as a class action, essentially pitting growers against Pilgrim’s for the allegations of wage fixing and limiting worker mobility. The plaintiffs alleged that the companies conspired through the exchange of compensation data provided by Agri Stats Inc., and others. They also alleged that company executives worked together to exchange future compensation plans across plants.

The proposed settlement administrator, Steven Weisbrot of the court-appointed Angeion Group LLC, filed his plan Aug. 16 in U.S. District Court to notify those affected by the alleged scheme. When and if Judge Shelby agrees on the settlement, Weisbrot reported that he plans to notify claimants through a variety of means, including print newspapers, social media, direct advertising, a toll-free hotline, and a website in which claimants can get more information.

Collectively, the growers were seeking damages of $2.77 billion, according to court documents. Tyson Foods settled the case in 2021 for $21 million. Perdue Foods settled for $60.7 million in March 2023. In September 2022, Cargill Meat Solutions Corp., Sanderson Farms and Wayne Farms LLC, settled for $84.8 million, while denying any wrongdoing.

Likewise, in this settlement, Pilgrim’s Pride is denying any wrongdoing. In the proposed settlement notification plan, the prescribed statement is that “The court did not decide in favor of Plaintiffs or Pilgrim’s. Instead, Plaintiffs and Pilgrim’s have agreed to the Pilgrim’s Settlement Agreement to avoid the costs and risks of continued litigation.”

The Sanderson distribution has a remaining balance of $10.8 million, which doesn’t account for legal fees, according to court documents, and will equate to an average $456.97 per class member, according to court documents.

The settlement administrator turned away 570,000 claims, most of which did not have the required information to verify their claims. Here is the breakdown: There are 4,460 claimants who will receive $100 or less; 10,667 who will receive between $100.01 and $500; 6,465 who will receive between $500.01 and $1,000; 1,921 who will receive between $1,000.01 and $2,000; 185 who will receive between $2,000.01 and $3,000; and 52 claimants who will receive an amount greater than $3,000, court documents state.

Angeion has requested an extra $225,000 from the court to cover the cost of processing the half a million claims that were ineligible.

In the Tyson and Perdue settlements, court documents stated that on Nov. 21, 2022, Angeion mailed checks to the 23,124 eligible claimants, totaling $20,975,131.91.  Only 18,411 payments were cashed. More than $3 million remains, which is expected to be distributed in a second round to 18,419 eligible claimants. According to court documents, the average second round check will be $169 per class member. Here is the breakdown: There are 7,219 claimants who will receive $100 or less; 10,563 who will receive between $100.01 and $500; 580 who will receive between $500.01 and $1,000; 54 who will receive between $1,000.01 and $2,000; two who will receive between $2,000.01 and $3,000; and one claimant who will receive an amount greater than $3,000.

In Re: Broiler Chicken Grower Antitrust Litigation (No II)., Case No. 6:20-md-02977-RJS-CMR, U.S. Court of Appeals for the 10th Circuit; August 16, 2024, 2024.

In Re: Broiler Chicken Grower Antitrust Litigation (No. II) Case No. MDL No. 6:20-2977-RJS-CMR, U.S. Court of Appeals for the 10th Circuit; August 16, 2024.