This class action is brought on behalf of Plaintiffs and all persons and entities who purchased beef (boxed and case-ready meat that has been processed from fed cattle) in the United States directly from one or more of the Defendant meat processing and packing companies (defined below) from at least January 1, 2015, until present (the “Class Period”). Plaintiffs allege that Defendants violated Section 1 of the Sherman Act by conspiring to constrain beef supplies in the United States, thereby artificially inflating domestic beef prices paid by direct purchasers. As a direct result of Defendants’ unlawful conduct, Plaintiffs and the other class members suffered antitrust injury for which Plaintiffs seeks treble damages and injunctive relief.
Defendants are the world’s largest meat processing and packing companies, known in the industry as meatpackers or packers. In 2018, the operating company Defendants (Tyson Fresh, CMS, Swift/Packerland, and National Beef) (collectively “Operating Defendants”) — sold approximately 80 percent of the more than 25 million pounds of fresh and frozen beef supplied to the U.S. market. Collectively, they controlled approximately 81–85 percent of the domestic cattle processed (or slaughtered) in the market throughout the Class Period. The next largest meatpacker had only a 2–3 percent market share.
It is alleged that since at least the start of 2015, Defendants have exploited their market power in this highly concentrated market by conspiring to limit the supply, and fix the prices, of beef sold to Plaintiffs and class members in the U.S. wholesale market. The principal, but not exclusive, means Defendants have used to effectuate their conspiracy is a scheme to artificially constrain the supply of beef entering the domestic supply chain. Defendants’ collusive restriction of the beef supply has had the intended effect of artificially inflating beef prices. It is alleged that as a result, Plaintiffs and class members paid higher prices than they would have paid in a competitive market.
Recently, the U.S. Department of Justice (“DOJ”) and U.S. Department of Agriculture (“USDA”) launched investigations into whether Defendants fixed beef prices in the United States. On June 4, 2020, news sources reported, and Plaintiffs confirmed, that DOJ’s Antitrust Division sent civil investigative demands to Defendants Tyson Foods, JBS SA, Cargill, Inc., and to National Beef Inc. (a company related to Defendant National Beef, Inc. seeking information about their pricing practices dating back to January 2015.
On March 12, 2020, testimony before the Senate Subcommittee on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies, Secretary of Agriculture Sonny Perdue announced that the USDA had begun an investigation into suspiciously high beef prices. Secretary Perdue expressed serious concern that meatpackers were paying lower prices for live cattle without passing the cost savings on to Plaintiffs and other beef purchasers. As he explained, the difference between prices for live cattle and prices for wholesale beef was “historically high.”
It is alleged that Defendants colluded during the Class Period to reduce supplies of beef in tandem thereby raising and fixing beef prices at levels higher than prices that would have prevailed had the beef market been competitive. As a direct result, Plaintiffs and class members suffered antitrust injury by paying illegally inflated prices for beef they purchased from Defendants.
The case has been brought on behalf of a putative Class defined as:
All persons and entities who purchased beef directly from any of the Defendants, or their respective subsidiaries or affiliates, for use or delivery in the United States from January 1, 2015 to present.
A copy of the complaint can be viewed here:
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