Chicken Trial Failures Have Judge Asking Why Do This Over Again

The U.S. Justice Department has tried and failed twice to prove price-fixing in the chicken industry. Now, before it tries for a third time, a federal judge in Denver is demanding an explanation.

“I am going to order that the head of the antitrust division come in here within the next week and look me in the eye and explain to me why the government is going to retry this case,” U.S. District Judge Philip Brimmer said Tuesday.

The judge declared a mistrial after jurors were unable to reach a verdict on criminal charges against 10 men who worked for companies including Tyson Foods Inc., Pilgrim’s Pride Corp. and Perdue Farms LLC. In December, an earlier trial of the same defendants also ended in a deadlock.

But when a prosecutor told Brimmer that a third trial was planned, the judge expressed skepticism and said he’d issue the order for an appearance by the head of the DOJ’s Antitrust Division, Assistant Attorney General Jonathan Kanter.

“If the government thinks that the 10 defendants and their attorneys and my staff and another group of jurors should spend six weeks retrying this case after the government has failed in two attempts to convict even one defendant, then certainly Mr. Kanter has the time to come to Denver and explain to me why the Department of Justice thinks that that is an appropriate thing to do,” Brimmer said.

The failure of two juries to return verdicts for any of the defendants suggests a split on the government’s claim of an eight-year conspiracy to fix prices in the massive chicken market. It’s a serious blow to government efforts to police competition in food markets at a time of rising prices. The men face fines and prison if convicted.

A Justice Department spokeswoman declined to comment on the mistrial or Judge Brimmer’s order requiring Kanter to appear in Denver.

Anti-Competition Claims

Meat companies have gotten increased scrutiny in recent months as higher beef, pork and poultry prices helped spur inflation and President Joe Biden called out the lack of competition among U.S. meatpackers. Chicken producers have been sued by buyers claiming anti-competitive practices. The Denver case was the first trial for a federal investigation targeting the biggest companies in the $95 billion chicken market.

Tyson, the largest U.S. producer, cooperated in the federal probe, taking advantage of a government policy to grant leniency to companies that are the first to disclose illegal price-fixing. Greeley, Colorado-based Pilgrim’s Pride, a unit of Brazilian food giant JBS SA, pleaded guilty to a price-fixing conspiracy last year and was sentenced to pay $108 million in fines.

The defendants, including former Pilgrim’s Pride CEOs Jayson Penn and William Lovette, were charged with conspiring with others in the industry to fix prices and rig bids from 2012 to early 2019. The retrial, following December’s hung jury, began Feb. 22. The jury was asked to decide whether the defendants agreed to coordinate pricing and bids to limit competition.

Unusual Criminal Case

The trials were unusual because the executives faced criminal prosecution for alleged antitrust violations.

The other defendants were Roger Austin, a former Pilgrim’s vice president; Mikell Fries, president of Claxton Poultry; Scott Brady, a Claxton vice president; Timothy Mulrenin, a Perdue executive who previously worked at Tyson; William Kantola, a Koch Foods Inc. executive; Jimmie Lee Little, a former Pilgrim’s sales director; Gary Brian Roberts, a Case Farms employee who had previously worked at Tyson; and Rickie Blake, a former director and manager at George’s Inc.

Each of the defendants faced a single charge of conspiring to restrain trade.

During both trials, the jurors heard from the government’s star witness, Robert Bryant, a longtime Pilgrim’s Pride employee who’s currently on leave. Bryant testified about an industry-wide agreement to share price and bid information to inflate profits or limit losses, depending on market conditions.

Bryant, who testified under a grant of immunity from prosecution, admitted that he had lied to the FBI “multiple times” on matters unrelated to the price-fixing probe. Another prosecution witness was Tyson sales manager Carl Pepper, who told jurors about coordinating prices among the competitors.

Lawyers for the defendants argued that both men had lied to avoid prison. The defense argued that it’s not illegal simply to share pricing information and that the government can’t prove that the defendants all agreed to participate in a single, overarching conspiracy.

The case is U.S. v. Penn, 20-cr-00152, U.S. District Court, District of Colorado (Denver).

(Updates to include comments from judge about retrying the case.)

To contact the reporter on this story:
Bob Van Voris in federal court in Manhattan at rvanvoris@bloomberg.net

To contact the editors responsible for this story:
Katia Porzecanski at kporzecansk1@bloomberg.net

Steve Stroth

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