As millions of Americans contemplate whether to fry, smoke or barbeque their chicken over the upcoming 4th of July holiday, the antitrust class action against our nation’s largest chicken producers—In Re Broiler Chicken Antitrust Litigation, No. 16-cv-8637—took a significant turn this past week, when the U.S. Department of Justice formally intervened in the multi-district private litigation originally filed in 2016.
DOJ granted leave to intervene and three-month discovery stay
The DOJ’s June 21, 2019 Motion to Intervene and Stay Discovery sought a six-month stay of both written and deposition discovery against defendants (and their current and former employees) in the ongoing civil proceedings in the U.S. District Court for the Northern District of Illinois in order to “protect the integrity of the grand jury’s investigation.” Although neither the plaintiff purchasers nor the defendant producers objected to the DOJ’s intervention request, the purchasers filed a memorandum in opposition to the DOJ’s stay request. According to the opposition, such a stay would have been unprecedented where discovery of defendants had been ongoing for more than a year, and more than 150 depositions had already been taken since October 2018.
After a June 27 hearing, Judge Durkin granted a more limited, three-month stay. Judge Durkin emphasized an interest in allowing plaintiffs to push towards a resolution by indicating that this would be the only stay he would grant. Judge Durkin also reportedly told counsel for the DOJ that after the three-month stay expired, he intended to permit plaintiffs to begin issuing discovery requests to defendants for any documents they may have turned over in response to a grand jury subpoena.
Implications for the litigation
The DOJ’s intervention marks a potentially significant milestone in the case. Unlike the many civil price fixing cases brought by private plaintiffs after a government antitrust investigation (and often after criminal indictments), the private civil case against the chicken producers was filed before the government investigation. And it has already survived defendants’ initial motions to dismiss. The DOJ’s recent decision to intervene may signal that the government now believes that serious criminal antitrust violations occurred. If the government’s investigation uncovers additional evidence against the chicken producers, it could further increase pressure on the defendants to evaluate opportunities to resolve the civil litigation in order to avoid treble damages exposure. As a result, the second half of 2019 promises to be an interesting one in the broiler chicken antitrust litigation, as the government’s investigation intensifies and potentially becomes the subject of discovery by the private plaintiffs.
If you have any questions concerning this briefing, please contact Jason Dubner.