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Price-Fixing Suit Against Koch Foods, Claxton Dropped by Justice

Sept. 23, 2022, 4:37 PM

The Justice Department gained court approval of its move to drop charges against Koch Foods and Claxton Poultry Farms for alleged criminal price-fixing in the poultry business.

The voluntary dismissal is the latest twist in the division’s crusade against alleged price fixing in the chicken industry.

Dropping charges against the two corporate defendants was “not contrary to manifest public interest,” the DOJ’s antitrust division said in its motion that was approved Sept. 22 by Judge Raymond P. Moore of the US District Court for the District of Colorado.

“In an effort to conserve the resources of the Court, the parties, and the public, the United States hereby moves to dismiss Count 1—the sole count—as to Defendants Claxton Poultry and Koch Foods,” DOJ wrote in its Sept. 15 motion.

Justice initially charged Claxton with a single count of price fixing and bid-rigging in May 2021. It added Koch under the same count two months later. The two companies allegedly participated in a larger conspiracy to suppress competition for broiler chicken products sold throughout the US.

The DOJ has faced several setbacks in recent months. It lost a high-profile jury trial in July in a separate case against five executives—current and former executives from Claxton and Pilgrim’s Pride—who were allegedly involved in the same overarching conspiracy.

The DOJ dropped charges against two ex-Pilgrim’s executives in another price-fixing case in Colorado a month later. Only two defendants remain charged: Jason McGuire and Timothy Stiller, both former Pilgrim’s executives.

But the division hasn’t come up completely empty-handed. Pilgrim’s Pride pleaded guilty in 2021 to price-fixing charges brought under the same broad investigation and paid a $107 million criminal fine.

The DOJ reached a settlement with Cargill, Sanderson Farms, and Wayne Farms in July that requires the companies to pay $84.8 million to resolve allegations they violated antitrust law by communicating about worker compensation.

The DOJ didn’t immediately reply to a request for comment.

The case is USA v. Norman W. Fries, Inc. et al, D. Colo., no. 1:21-cr-00168, 9/22/22.

To contact the reporter on this story: Dan Papscun in Washington at dpapscun@bloombergindustry.com

To contact the editor responsible for this story: Roger Yu at ryu@bloomberglaw.com