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Chicken Cartel Lawyers Get $55 Million of $170 Million Deal (1)

Nov. 30, 2021, 7:30 PMUpdated: Dec. 1, 2021, 3:19 PM

Counsel for the chicken wholesalers leading antitrust litigation over an alleged industrywide price-fixing scheme are entitled to $55 million so far for their work negotiating class action settlements worth nearly $170 million to date, a federal judge in Chicago ruled Tuesday.

Judge Thomas M. Durkin approved the award—along with $4.5 million in expenses—saying the lawsuit on behalf of “direct purchasers” deserved credit for prompting not just a consolidated case in the U.S. District Court for the Northern District of Illinois but also a wide-ranging Justice Department probe.

“Counsel invested massive resources of time and money when no other counsel expressed interest, with little assurance of success” and “no government investigation” to “piggy-back” on, Durkin wrote. “Their performance to date has been exemplary.”

“Settlement in a complex antitrust case like this is far from a foregone conclusion,” he added.

The ruling comes about a month after a different group of attorneys asked the judge to award them $60 million for consumer settlements worth $181 million with Tyson Foods Inc., Pilgrim’s Pride Corp., and other poultry processors.

Tyson and Pilgrim’s, a subsidiary of Brazilian meatpacking giant JBS SA, have also settled with the wholesalers.

Both the civil suit and the federal prosecution are part of a wave of cartel cases involving livestock and protein, including beef, turkey, pork, tuna, salmon, and eggs. Most of them center on alleged unlawful exchanges of sensitive information through Agri Stats Inc., which compiles farm sector databases.

The broiler chicken industry has been particularly hard hit. Along with the main civil case and the criminal charges—which carry the threat of prison time—poultry processors and executives face claims they conspired to drive down pay for chicken farmers and their mostly immigrant plant workers.

In his fee ruling Tuesday, Durkin said counsel for the wholesalers had “successfully defended the case against a significant motion to dismiss” and “shepherded the case through extensive discovery” while facing off against “some of the most prominent and sophisticated law firms” in the country.

“A substantial award is warranted here as a proper incentive for high quality counsel to take on complex cases, requiring a massive investment of time and money, with such a high risk,” the judge wrote.

He also found that “fee awards in antitrust cases in this circuit are almost always one-third” and that there’s “little to no precedent recommending anything other than an award of 33%.” No class member filed an objection, Durkin noted.

Lockridge Grindal Nauen PLLP and Pearson, Simon & Warshaw LLP are co-lead counsel for the direct purchasers, which are also represented by liaison counsel Hart, McLaughlin & Eldridge LLC and 20 other firms.

The case is In re Broiler Chicken Antitrust Litig., N.D. Ill., No. 16-cv-8637, 11/30/21.

(Updates dollar figures in first paragraph of Nov. 30 story to reflect revisions to the judge's ruling.)

To contact the reporter on this story: Mike Leonard in Washington at mleonard@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Patrick L. Gregory at pgregory@bloomberglaw.com

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