Judge R. Brooke Jackson of the US District Court for the District of Colorado said in his ruling that “…because the complaint lacks facts about the means and amounts by which the alleged conspirators cut production or when those particular cuts occurred, it is difficult to determine whether the conspirators were acting in parallel.”
The case was filed in March 2016. George James Fuller, an investor, was designated as lead plaintiff. In the complaint, Fuller alleges that Pilgrim’s Pride conspired with other large poultry processors to cut poultry production and raise prices for chicken. The lawsuit states that the scheme artificially increased the value of Pilgrim’s Pride stock. The complaint alleges that Pilgrim’s Pride falsely assured investors through “untrue or misleading public statements” by promoting legitimate causes for Pilgrim’s success instead of disclosing the price-fixing scheme.
The alleged conspirators achieved reductions in broiler chicken production “…through various means, including reducing eggs, reducing broiler breeder flocks, destroying chicks or eggs, temporarily or permanently shutting down facilities, and exporting eggs or chicks,” court documents state.
But Jackson said in his ruling, “This general list of methods used to cut production does little to establish what exactly Pilgrim’s actually did to cut production and when, or how its actions compared with those of its co-conspirators as necessary to establish that there was a course of parallel conduct. The complaint does not provide numbers of eggs destroyed, for example, or what impact such reductions had on broiler production levels.”
Additionally, Jackson said, “…production those actions would have had such disparate effects that they do not represent a parallel course of conduct.”
Jackson dismissed the case without prejudice, concluding that Fuller’s “…securities case is essentially premature but not necessarily hopeless.”
The case is Hogan v. Pilgrim’s Pride Corporation et al, case number 1:16-cv-02611, US District Court of Colorado.
