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Poultry Companies Fork Over $104M to Settle Class Action Lawsuit

A preliminary settlement agreement was recently announced, bringing an end to litigation against Tyson Foods and others.

Earlier this month, U.S. District Court Judge Thomas M. Durkin ruled in favor of preliminary approval for settlement agreements stemming from a class-action lawsuit filed against Tyson Foods Inc., Peco Foods Inc., Fieldale Corp., and George’s Farms Corp. The suit argued the poultry companies “engaged in a conspiracy to suppress chicken production and raise prices in violation of federal and state antitrust and consumer protection laws.” The complaints against the companies were filed by retailers, consumers, and food service companies.

Raw Chicken; image courtesy of RitaE via Pixabay, www.pixabay.com

If the preliminary settlement agreements reach final approval, Fieldale will pay $1.7 million, Peco Foods $1.9 million, George’s $1.9 million, and Tyson $99 million for a total of $104.5 million, according to court documents.

The suit itself was filed in federal court back in 2016. In 2017, a motion to dismiss the case was denied. Since then, “rigorous discovery has netted plaintiffs’ attorneys more than eight million documents, and more than 100 depositions of defendants’ employees and third parties were taken.” Negotiations to settle the suit began in September 2017 with Fieldale, but they failed to reach a resolution. Those discussions restarted in November 2018 and March 2019 “following depositions of Fieldale employees.” Unfortunately, those discussions also fell apart.

In August 2020, the settlement discussions resumed. The court documents state:

“These discussions continued intensely through October 2020 and included discussions about cooperation Fieldale could provide to support EUCP’s motion for class certification…EUCPs and Fieldale signed a memorandum of understanding on Oct. 30, 2020, and signed the final settlement agreement on Dec. 3, 2020.”

In September 2019, settlement talks began with Peco Foods and George’s. Negotiations continued through February 2020, but no agreement was reached. In July 2020, the settlement discussions resumed, and in October 2020, the “EUCPs signed settlement agreements with both defendants.” With Tyson, settlement talks began in January 2020. Those negotiations were mediated by Judge Daniel Weinstein (ret.), and in April 2020, “the parties engaged in mediated negotiations but were unable to reach an agreement.” Negotiations continued on through July 2020, but again, an agreement was not made. Court documents further state:

“In December 2020, the parties agreed to continue negotiations with another mediation day facilitated by Judge Weinstein…Following an intense day-long mediation in mid-January 2021, the parties reached an agreement. The final settlement agreement was signed on Feb. 24, 2021.”

In response to the proposed settlement, Tyson Foods issued the following statement:

“(Tyson Foods) believes that the settlements were in the best interests of the company and its shareholders in order to avoid the uncertainty, risk, expense and distraction of protracted litigation.”

Sources:

$104M to settle consumer lawsuit against poultry companies

Tyson Foods to pay $221.5 million to settle price fixing lawsuit

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