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Smithfield’s $42 Million Pork Antitrust Deal Gets Court Approval

Oct. 20, 2022, 4:02 PM

Smithfield Foods Inc. stepped closer to exiting antitrust litigation over an alleged industrywide scheme to fix pork prices, when a federal judge in Minneapolis approved its $42 million settlement with restaurants and caterers, the second of three agreements worth $200 million in total.

Judge John R. Tunheim signed off Wednesday on the deal resolving class action claims brought against Smithfield on behalf of “institutional indirect purchasers” in the US District Court for the District of Minnesota. The judge also handed $13.3 million in legal fees to counsel for the restaurants.

The brief ruling came about three weeks after Smithfield announced the third agreement, a $75 million pact with consumers. Tunheim, who in January approved the company’s $83 million deal with wholesalers, also scheduled a Nov. 4 hearing on the consumer settlement.

Smithfield would be the second major pork processor to escape the case, after Brazilian meatpacking giant JBS SA, which paid more than $57 million across three separate settlements. Tunheim approved the last of those agreements in mid-September.

The lawsuit, filed in 2018, also targets affiliates of Tyson Foods Inc., Hormel Foods Corp., Clemens Family Corp., and Seaboard Corp. The six corporate families named as defendants allegedly control 80% of the market.

The suit accuses them of coordinating on price by publicly touting the need for herd cutbacks and laundering secret commercial information through farm sector databases compiled by Agri Stats Inc.

The consolidated dispute is part of a wave of cartel litigation involving livestock, agriculture, and protein, including the chicken, beef, turkey, tuna, salmon, egg, and dairy sectors. Like the pork case, many of the suits focus in large part on alleged information sharing through Agri Stats.

Tunheim, who’s also overseeing the beef litigation, let the pork lawsuit move forward in October 2020. His ruling at the time cited “a massively atypical jump in the price of pork” accompanying a sudden decrease in supply “after nearly a decade of sustained growth.”

Larson King LLP and Cuneo Gilbert & LaDuca LLP are lead counsel for the restaurants and caterers. Smithfield is represented by Gibson, Dunn & Crutcher LLP.

The case is In re Pork Antitrust Litig., D. Minn., No. 18-cv-1776, 10/19/22.

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