Legal battle over beef price manipulation ends with 87.5 million settlement from Tyson and Cargill

Legal battle over beef price manipulation ends with 87.5 million settlement from Tyson and Cargill

Consumers impacted by inflated beef prices set to receive compensation from Tyson and Cargill settlement

In a major development in the ongoing beef price-fixing litigation, Tyson Foods and Cargill have agreed to settle a federal class-action lawsuit for a combined total of $87.5 million. This settlement addresses accusations that the two companies conspired to inflate beef prices in the United States by restricting supply. The preliminary settlement, filed in a federal court in Minnesota, awaits judicial approval.

Details of the Settlement

Tyson Foods, headquartered in Arkansas, will pay $55 million, while Cargill, based in Minnesota, has agreed to pay $32.5 million. The settlements are part of the larger price-fixing case, which dates back to 2019 when the lawsuit was first initiated by consumers. The class-action lawsuit alleges that Tyson and Cargill, along with other industry giants, colluded to limit the supply of beef and manipulate prices, causing consumers to pay inflated prices. Attorneys representing the plaintiffs estimate that as many as 36 million consumers in 26 states and the District of Columbia could be eligible for compensation under the settlement.

Cooperation with Ongoing Investigations

As part of the agreement, both Tyson and Cargill have pledged to cooperate with plaintiffs in pursuing price-fixing claims against other remaining defendants in the case, JBS USA and National Beef Packing. Despite the settlement, all four companies have denied any wrongdoing in relation to the claims. A judge’s approval is required for the settlement to become final. The legal teams representing the plaintiffs have made it clear that this agreement is just the beginning of the litigation process, with further claims potentially being pursued against other companies involved in the alleged price-fixing conspiracy.

The proposed settlement will benefit consumers who indirectly purchased beef products, such as chuck, loin, and ribs, between August 2014 and December 2019. The eligible consumers are those who bought these beef products from major retail stores like Walmart and Costco. Interestingly, while these retail giants were involved in the sale of the beef, they are not named as defendants in the case. The focus remains squarely on the meat suppliers involved in the alleged price-fixing conspiracy. An expert working for the plaintiffs has estimated the total damages for the class could amount to $1.9 billion, further underlining the significance of this case and the financial impact it has had on consumers.

Legal Fees and Attorneys' Efforts

The plaintiffs' legal team, which has invested substantial time and resources into the case, will be requesting up to 33.3% of the settlement amount roughly $29 million for legal fees. These fees will be subject to court approval as part of the final settlement process. Attorneys for the plaintiffs have already invested tens of thousands of hours in pursuing this complex litigation, and the case remains ongoing. In a related development, Tyson Foods also agreed to settle a similar lawsuit related to inflated pork prices, agreeing to a payout of $85 million in that case. However, Tyson has denied any wrongdoing in both the beef and pork cases, as has JBS USA, which reached an $83.5 million settlement earlier this year to resolve claims from ranchers and other plaintiffs over price-fixing allegations in the beef industry.

Next Steps and Remaining Defendants

The legal battle is far from over. While the settlements with Tyson and Cargill provide some relief to consumers, the case continues to unfold, with ongoing litigation against JBS USA and National Beef Packing. These companies remain key players in the meatpacking industry and could face additional legal scrutiny in the coming months.

In Re Cattle and Beef Antitrust Litigation

The lawsuit, titled In re Cattle and Beef Antitrust Litigation, is being heard in the U.S. District Court for the District of Minnesota under case number 0:22-md-03031-JRT-JFD. The legal team for the plaintiffs includes prominent attorneys such as Shana Scarlett and Steve Berman of Hagens Berman Sobol Shapiro, and Brian Clark of Lockridge Grindal Nauen. For the defendants, legal representation includes Jacob Bylund of Faegre Drinker Biddle & Reath for Cargill, and Susan Foster of Perkins Coie and John Terzaken of Simpson Thacher & Bartlett for Tyson Foods.

Turning Point in Beef Industry Litigation

This settlement marks a pivotal moment in the ongoing legal battles surrounding the beef industry’s pricing practices. While the immediate financial relief for consumers is substantial, the broader implications of this case could reshape the way the U.S. meatpacking industry operates. With more legal proceedings still to unfold, the full extent of the price-fixing allegations remains to be seen. As the legal process continues, stakeholders in the beef supply chain, from ranchers to consumers, will be closely monitoring further developments and settlements that could impact the future of beef pricing in the United States.