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Chicken Cartel Attorneys Seek $60 Million Fee Out of Settlements

Oct. 28, 2021, 5:02 PM

Two law firms asked a federal judge in Chicago to award them nearly $60 million for their work negotiating consumer antitrust settlements worth $181 million in total with Tyson Foods Inc., Pilgrim’s Pride Corp., and other poultry processors facing chicken price-fixing claims.

Counsel for the consumers sought the legal fees—as well as reimbursement for nearly $9 million in expenses they fronted—in a motion filed in the U.S. District Court for the Northern District of Illinois, where the proposed class action is consolidated with claims brought by wholesalers and restaurants.

The attorneys have shouldered “the risks and costs of litigation, without any compensation to date,” for five years, according to the filing by Hagens Berman Sobol Shapiro LLP and Cohen Milstein Sellers & Toll PLLC.

“Often, civil plaintiffs bring antitrust claims only after the Department of Justice has announced a criminal investigation,” but the two firms chose “to take a risk, dig in, and follow leads” against major companies backed by “some of the most well-known and aggressive attorneys in the country,” the motion says.

The DOJ, meanwhile, “benefited from work and risks borne by the civil plaintiffs” when it launched its own investigation two years into the case, according to the firms. That DOJ probe has led to multiple indictments of poultry executives, including two former Pilgrim’s CEOs currently on trial in Denver.

Both the federal prosecution and the consolidated civil suit, which began in 2016, are part of a wave of cartel cases involving livestock and protein, including beef, turkey, pork, tuna, salmon, and eggs.

Most of the lawsuits allege price-fixing schemes centering on 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, top poultry processors and executives face claims they conspired to turn chicken farmers into “modern-day sharecroppers” and to drive down pay for their largely immigrant workforce.

Many of the companies have settled many of the claims against them over about the past year. Tyson and Pilgrim’s, a subsidiary of Brazilian meatpacking giant JBS SA, have agreed to pay more than $200 million each in total.

The consumer settlements include a $99 million agreement with Tyson, a $76 million deal with Pilgrim’s, and four settlements with smaller poultry processors worth a combined $6 million.

In their fee motion, the firms say their “zealous” advocacy is the only reason the case involves separate consumer claims in the first place, after they succeeded in cleaving them off from allegations on behalf of “commercial” indirect purchasers like restaurants over conflict-of-interest concerns.

Their request for one-third of the total recovery is in line with contingency agreements “negotiated by sophisticated plaintiffs (such as Fortune 500 companies) who bring antitrust cases,” according to a large recent study, the Wednesday motion says.

The case is In re Broiler Chicken Antitrust Litig., N.D. Ill., motion for attorneys’ fees filed 10/27/21.

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

To contact the editor responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com