Pork Consumers' $75 Million Price-fixing Accord With Smithfield Approved

Outbreak of the coronavirus disease (COVID-19) in Sioux Falls, South Dakota — The closed Smithfield Foods pork plant is seen as the spread of the coronavirus disease (COVID-19) continues, in Sioux Falls, South Dakota, U.S., April 16, 2020. Reuters

A U.S. judge on Tuesday approved a $75 million settlement between Smithfield Foods Inc and a class of consumers who accused the pork producer of conspiring to restrict supply in order to keep prices artificially high.

U.S. District Judge John Tunheim in Minneapolis called the resolution "fair, reasonable, and adequate" in his order approving the deal.

"The settlement class members' positive reaction supports final approval," Tunheim wrote. The judge said that out of millions of potential class members only "three have opted out, and none have objected."

The orders were the latest in long-running litigation over allegedly inflated prices in the $20 billion annual pork market. Other meat industry antitrust cases have been filed over beef, turkey and chicken prices.

Smithfield previously agreed to pay $83 million to resolve claims from "direct" purchasers, including Maplevale Farms Inc in New York and Pennsylvania-based John Gross & Company Inc, and $42 million with restaurant and other commercial purchasers. Pork consumers last year settled with Smithfield rival JBS SA for $20 million.

A spokesperson for Smithfield and an attorney for the company at Gibson, Dunn & Crutcher on Wednesday did not immediately respond to messages seeking comment.

Virginia-based Smithfield, a unit of Hong Kong-listed WH Group Ltd (0288.HK), has denied any wrongdoing.

As part of the settlements, Smithfield and JBS agreed to cooperate in the consumers' claims against six other non-settling defendants including Hormel Foods Corp and Tyson Foods Inc.

A Tyson spokesperson declined to comment on Wednesday, and a representative from Hormel did not immediately respond to messages seeking comment. Both also have denied the price-fixing allegations.

The judge in a separate order on Tuesday awarded nearly $25 million in legal fees to the plaintiffs firms representing the consumer class. Lawyers from plaintiffs' firms Hagens Berman Sobol Shapiro and Gustafson Gluek, the court-appointed consumer class counsel, did not immediately respond to messages seeking comment.

The consumer class attorneys said in a court filing in January that they'd spent more than 37,000 hours pursuing antitrust claims over four years.

The case is In re Pork Antitrust Litigation, U.S. District Court, District of Minnesota, No. 18-01776.

For the consumer class: Shana Scarlett of Hagens Berman Sobol Shapiro, and Daniel Gustafson of Gustafson Gluek

For Smithfield: Joshua Lipton of Gibson, Dunn & Crutcher, and Brian Robinson of Brown Fox