A rash of price-fixing lawsuits filed against the meat industry in recent years have coalesced in federal court in Minnesota, where a judge could decide if the world's biggest purveyors of pork and beef sought to illegally fix prices.
Meatpackers still face price-fixing complaints in federal court in Minnesota
Smithfield's settlement doesn't end the lawsuit, which also names Minnesota's Hormel. A similar suit against the "Big 4" beef packers, including Cargill, is before the same judge.
July 6, 2022 at 5:50PM
Smithfield, the nation's largest pork producer, said this week it agreed to pay its customers $42 million in a settlement that must be approved by the Minnesota federal judge overseeing the case, John Tunheim, at a hearing scheduled for October.
And while one meatpacker is choosing to move on from the issue, the lawsuit remains active against the other defendants: Austin, Minn.-based Hormel Foods, Tyson Foods, Seaboard Foods, Triumph Foods, and Agri Stats — a database that plaintiffs allege was used by companies to manipulate the market.
In an e-mail to Star Tribune, a spokesman for Hormel said the company has been fighting similar claims for four years.
"We consider these claims to be baseless and have been defending the allegations vigorously and will continue to do so," the spokesperson said.
It's one in a series of antitrust lawsuits filed by various customers around the nation against the dominant chicken, beef and pork companies.
Last month, a string of lawsuits from different federal districts — all making similar allegations of price-fixing schemes in the beef industry — were bundled in Minnesota, landing on Tunheim's desk.
Complaints from beef buyers, including the Subway restaurant chain and grocers, name the so-called "Big 4" beef producers as defendants: JBS, National Beef Packing, Tyson and Minnetonka-based agriculture giant Cargill. Attorneys say the companies participated in a plot to collectively decrease the number of cattle slaughtered in order to increase profits.
Beginning in 2015, the companies effected a "scheme to artificially constrain the supply of beef entering the domestic supply chain," the lawsuit alleges.
"We believe the assertions lack merit, and we are confident in our efforts to maintain market integrity and conduct ethical business," Dan Sullivan, a Cargill spokesman, said in an e-mail.
A confidential witness at a Texas slaughter plant — owned and operated by a JBS subsidiary — observed plant officials agreeing to reduce inventory to lift margins, according to the court filings.
The Smithfield pork settlement was reached a year after a federal panel consolidated lawsuits from across the country into a multidistrict litigation involving major pork industry players.
A panel of federal judges, chaired by Judge Karen K. Caldwell of Kentucky, last June ordered the consolidation in Minnesota, saying Judge Tunheim was the "logical choice" to oversee the litigation, given that he'd presided over antitrust cases going back to 2018.
According to the lawsuit, the top-four pork producers controlled 70% of the market by 2015 — nearly double the market share since 1988. Plaintiffs allege JBS, Tyson and Hormel, among others, relied on Agri Stats beginning in 2009 to "benchmark" the price of pork.
In its settlement, Virginia-based Smithfield denied wrongdoing but agreed to pay millions to buyers, including restaurants such as Buffalo Wild Wings, and to grocery stores such as Hy-Vee.
This past November, Tunheim wrote about the complicated legal task of consolidating dozens of cases going forward.
"Just like managing any complex litigation with numerous parties," Tunheim wrote at the time, "there is no perfect solution."
The American restaurant and bar recently filed for bankruptcy. Minneapolis-based Carlson had owned the brand for 40 years before selling it to a private equity firm in 2014.
