Broiler Conspiracy Charges Dismissed

LINCOLN, Neb. (DTN) -- Just days after a federal judge in Colorado ruled insufficient evidence existed of a broiler price-fixing scheme involving two Pilgrim's Pride Corp. executives, Jason McGuire and Timothy Stiller, U.S. attorneys filed an unopposed motion to dismiss on Monday, and the case was officially dismissed.

In July 2021, a federal grand jury in Denver handed down an indictment of Jason McGuire, Timothy Stiller, as well as Pilgrim's Pride employees Wesley "Scott" Tucker, a national accounts sales executive; and Justin Gay, director of fresh foodservice sales. Park Ridge, Illinois-based Koch Foods also was indicted by the grand jury.

The U.S. District Court for the District of Colorado had scheduled a 15-day trial for McGuire and Stiller starting on Oct. 31.

In February 2021, Pilgrim's Pride admitted to its role in a conspiracy to fix broiler chicken prices starting in 2012 and will pay a $107.9 million fine as part of a plea agreement entered in federal court.

The July 2021 indictment alleges the defendants conspired to suppress and eliminate competition for sales of broiler chicken products, which are chickens raised for human consumption and sold to grocers and restaurants.

In its motion to dismiss the charges, the U.S. government said the court's Oct. 14 ruling that evidence was insufficient to prove a conspiracy, "departs from prior rulings" in the district on the same conspiracy.

In the case of U.S. v. Jayson Penn, former president and CEO of Pilgrim's Pride, the same court ruled "the government has shown that a conspiracy to rig bids and fix prices for broiler chicken products in the United States did exist and that such conspiracy operated between at least August 2011 and early 2019."

Penn was found not guilty by a jury this past summer.

In the court's Oct. 14, 2022, order, judge Daniel D. Domenico wrote, "They are wrong to suggest that evidence of price sharing compels the conclusion that such a conspiracy exists, both as a matter of law and a matter of fact. The law is clear that sharing pricing information can be perfectly innocent if done independently and not pursuant to concerted action.

"And here, the facts are at least as consistent with innocent, independent price-sharing behavior as they are with conspiratorial price fixing and bid rigging."

Koch Senior Vice President William Kantola was among 10 people indicted in October 2020 for their roles in the alleged conspiracy. On May 19, 2021, a grand jury returned an indictment against Claxton Poultry for its role in the same alleged conspiracy.

Koch Foods, McGuire, Stiller, Tucker and Gay were charged with a violation of the Sherman Antitrust Act, according to the indictment. Violations of the Sherman Act carry a maximum penalty of 10 years in prison and a $1 million fine for individuals, $100 million fine for corporations.

In December 2021, a mistrial was declared in the alleged conspiracy involving Penn, Roger Austin, former vice president of Fresh Foodservice at Pilgrim's Pride; Claxton Poultry Farms President Mikell Fries; Scott Brady, vice president of national accounts for Claxton Poultry Farms; along with other poultry company employees Jimmie Little, Timothy Mulrenin, Kantola, William Lovette, Gary Roberts and Rickie Blake.

A grand jury indicted the employees back in June 2020.

The indictment alleged the price-fixing goes back to at least 2012 and pointed to repeated text communications among Austin, Brady and Fries over bids and prices for poultry contracts or overall market prices. The texts also repeatedly reference communications back to Penn. Those communications for bids on prices continued repeatedly until at least 2017.

The indictment also cited conversations over how to treat competitors who are short on product for delivery and competitors selling chicken products for lower margins. Penn noted in a series of emails regarding one unnamed competitor, "So in essence they are cheap and to add insult to injury are short product."

The indictment stated the business practices of the four executives "substantially affected interstate trade and commerce."

The DOJ filed the indictment with an antitrust class-action civil case in federal court in Illinois that was initially filed in 2016.

Read more on DTN:

"Mistrial Declared in Poultry Exec Case," https://www.dtnpf.com/…

"Poultry Execs Face Retrial in February," https://www.dtnpf.com/…

Todd Neeley can be reached at todd.neeley@dtn.com

Follow him on Twitter @DTNeeley

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