Pilgrim’s Pride Wins Long-Running Dispute with Poultry Growers

Bailey Brauer PLLC represented Pilgrim’s in antitrust lawsuit

DALLAS – A federal judge in Marshall, Texas, ruled in favor of Pilgrim’s Pride Corp. in a $500 million antitrust lawsuit filed by a group of poultry growers who accused the company of unfair trade practices and manipulating poultry prices.

Pilgrim’s originally was sued by more than 500 plaintiffs who were current or former chicken growers in Texas, Louisiana and Arkansas, each of whom sought approximately $1 million in damages. They claimed, among other things, that Pilgrim’s forced them to spend millions of dollars to upgrade their operations before the company stopped doing business with them. The plaintiffs alleged Pilgrim’s made the move in order to manipulate poultry prices by reducing availability. The lawsuit claimed Pilgrim’s violated the Packers and Stockyards Act of 1921, which governs the interstate purchase and sales of livestock, poultry and swine.

The case is Adams, et al. v. Pilgrim’s Pride Corp., No. 2:09-CV-00397, and was decided in the U.S. District Court for the Eastern District of Texas in Marshall. Pilgrim’s lead counsel was Clayton Bailey of Dallas’ Bailey Brauer PLLC.

Pilgrim’s argued that it ceased operations with the facilities not to cause the chicken growers’ financial harm or manipulate the market, but rather because of market forces that led Pilgrim’s to file for bankruptcy protection shortly before the growers filed their lawsuit.

In the opinion issued April 22, U.S. Magistrate Judge Roy Payne ruled in favor of Mr. Bailey’s client by dismissing the plaintiffs’ claims and holding that Pilgrim’s did not violate the Packers and Stockyards Act. In the seven-page ruling, Judge Payne agreed that Pilgrim’s shut down its operations at the contested facilities in response to “extrinsic market forces” and that the company’s intention was to improve its bottom line. The judge further noted that he found no evidence to support the plaintiffs’ allegations that Pilgrim’s encouraged them to improve their facilities in order to cause them later financial losses.

In issuing his ruling, Judge Payne relied on another case argued and won by Mr. Bailey: Agerton v. Pilgrim’s Pride Corp., 728 F.3d 457, 459 (5th Cir. 2013). That case upheld the 5th Circuit’s ruling in Wheeler v. Pilgrim’s Pride Corp., 591 F.3d 355 (5th Cir. 2009) (en banc), which was also briefed and argued by Mr. Bailey and his law partner Alex Brauer. The latter case has been recognized as a “tidal wave” opinion that protected the agribusiness industry with its strict reading of the Packers and Stockyards Act as an antitrust statute.

“This litigation against Pilgrim’s has been going on for more than nine years,” Mr. Bailey says. “I’m glad we have some closure and are pleased with the result.”

In addition to Mr. Bailey, Pilgrim’s was represented by attorneys from Tyler, Texas’ Wilson Robertson & Cornelius in Tyler, Texas; Dallas’ Ackerman LLP; and the Chicago and Miami offices of Baker & McKenzie.

Bailey Brauer PLLC provides battle-tested, sophisticated courtroom experience in high-stakes litigation matters. Led by experienced trial and appellate lawyers Clayton Bailey and Alex Brauer, the firm focuses on complex commercial litigation, agribusiness, appeals, and class and collective actions.