JBS USA, a unit of São Paulo-based JBS S.A., and a group of direct purchasers in an ongoing pork price-fixing lawsuit filed a motion on Tuesday for preliminary approval of a class action settlement.
JBS filed court documents in the U.S. District Court of Minnesota that said the company would pay $24.5 million into an escrow account within 14 days of the court’s approval. According to Meat + Poultry, the settlement will be used to compensate direct purchasers for damages suffered and expenses accrued, including attorneys’ fees, litigation expenses and the costs of notice.
Back in November, JBS announced an agreement to resolve all claims against the company regarding direct sale of pork products. According to a company spokesman in November, JBS denied the allegations in the lawsuit and did not admit any liability, but they believed a settlement was in the best interest of the company.
This is the first disclosure of the deal terms after the buyers and JBS first said they had reached a settlement. According to Law360, the direct buyers said, “[T]he settlement agreement is the product of protracted arm’s-length settlement negotiations with the assistance of an experienced and nationally-renowned mediator, provides substantial monetary and nonmonetary relief to the DPP settlement class, and should be granted preliminary approval because it falls well within the range of possible approval.”
With their first settlement in hand, the direct buyers said on Tuesday that their deal bears all the hallmarks required for approval, including “extensive good faith negotiations.”
In addition to the payment, JBS is required “to provide specified cooperation in the DPPs’ (Direct Purchaser Plaintiffs) continued prosecution of the action against the remaining defendants. The terms of this cooperation are set forth in a confidential letter agreement, which will be provided to the court for in-camera review upon request.”
This deal would cover anyone who bought pork “for use or delivery in the United States” directly from JBS “or any co-conspirator” from 2009 until the date of preliminary approval, Law360 reports.
Other companies named in the original complaint include Agri Stats, Clemens Food Group LLC, Hormel Foods Corp., Indiana Packers Corp., Seaboard Foods LLC, Smithfield Foods Inc., Triumph Foods LLC and Tyson Foods Inc.
The proposed agreement does not cover lawsuits filed by consumers and retailers which the court agreed to consolidate with the direct purchasers’ lawsuit.
In August of 2019, Chief Judge John Tunheim dismissed the antitrust lawsuits and said the plaintiffs failed to show “parallel conduct” among the companies, whose combined U.S. market share exceeds 80%. However, the court granted the plaintiffs leave to amend their complaints. The direct purchaser plaintiffs filed an amended complaint last January.
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