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Peanut Cartel Deals Worth $58 Million Approved After False Nod

April 6, 2021, 2:56 PM

A peanut price-fixing class action targeting Archer Daniels Midland Co. and other top shelling companies crept closer to a conclusion, when a federal judge in Virginia approved settlements worth $58 million with Birdsong Corp. and an Olam International Ltd. subsidiary.

Judge Raymond A. Jackson gave his blessing to a $50 million agreement with Birdsong and a $7.75 million deal with Olam, saying the agreement seemed “favorable” to the farmers leading the lawsuit in light of the risks and costs they would have shouldered going forward.

“Adjudication of plaintiffs’ claims has already proven costly,” and “future appeals of any jury outcome are not only possible, but likely given the amount of money at stake,” Jackson wrote Monday. “In sum, any further litigation of this case would be lengthy, complex, and expensive.”

Jackson previously gave the Olam and Birdsong deals his tentative approval in late December and appeared to give them the final nod in early March—three weeks before a legally required hearing—then revoked that order without explanation the following day.

ADM subsidiary Golden Peanut Co. reached a separate $45 million settlement about a week later, according to a March 11 court filing.

If approved, the Golden Peanut agreement will end litigation in the U.S. District Court for the Eastern District of Virginia over claims that the companies conspired to stabilize raw peanut prices after weather-related volatility began undermining their predictability in recent years.

The lawsuit, filed in 2019, accuses the peanut shellers of doctoring inventory numbers “to create the false impression of an oversupplied market,” then offering artificially low prices that forced small growers to borrow ruinously against their farm equity.

Jackson let the case advance last May, saying three particular allegations make collusion the most plausible explanation for the prices: a clear motive to conspire, simultaneous price changes, and efforts to conceal “actual peanut inventory.” He certified the suit as a class action Dec. 2.

In his final approval ruling Monday, the judge noted that counsel for the plaintiffs have said they’ll seek attorneys’ fees after the “claims against Golden Peanut have been resolved.”

Lockridge Grindal Nauen PLLP and Freed Kanner London & Millen LLC are co-lead counsel for the farmers, who are also represented by Spector, Roseman & Kodroff PC and liaison counsel Durrette, Arkema, Gerson & Gill PC.

Birdsong is represented by Kaufman & Canoles PC. Olam is represented by Latham & Watkins LLP and Stoel Rives LLP. Golden Peanut is represented by Kirkland & Ellis LLP and McGuireWoods LLP.

The case is In re Peanut Farmers Antitrust Litig., E.D. Va., No. 19-cv-463, 4/5/21.

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; Nicholas Datlowe at ndatlowe@bloomberglaw.com