Brown et al v. JBS USA Food Company et al

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Chief Judge Philip A. Brimmer
Civil Action No. 22-cv-02946-PAB-STV
RON BROWN,
MINKA GARMON, and
JESSIE CROFT, individually and on behalf of all others similarly situated,
Plaintiffs,
v.
JBS USA FOOD COMPANY,
TYSON FOODS, INC.,
CARGILL INC.,
CARGILL MEAT SOLUTIONS CORP.,
HORMEL FOODS CORP.,
ROCHELLE FOODS, LLC,
AMERICAN FOODS GROUP, LLC,
TRIUMPH FOODS, LLC,
SEABOARD FOODS, LLC,
NATIONAL BEEF PACKING CO., LLC,
SMITHFIELD FOODS INC.,
SMITHFIELD PACKAGED MEATS CORP.,
MURPHY-BROWN OF MISSOURI, LLC,
AGRI BEEF CO.,
WASHINGTON BEEF, LLC,
PERDUE FARMS, INC.,
GREATER OMAHA PACKING CO., INC.,
NEBRASKA BEEF, LTD.,
INDIANA PACKERS CORPORATION,
QUALITY PORK PROCESSORS, INC.,
AGRI STATS, INC., and
WEBBER, MENG, SAHL AND COMPANY, INC. d/b/a/ WMS & Company,
Defendants.
ORDER
This matter is before the Court on the Plaintiffs’ Motion for Preliminary Approval
of Settlement with Perdue Farms, Inc., Certification of Settlement Class, and
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Appointment of Settlement Class Counsel [Docket No. 170], Plaintiffs’ Motion for
Preliminary Approval of Settlement with Seaboard Foods, LLC, Approval of Cooperation
Agreement with Triumph Foods, LLC, Certification of Settlement Class, and
Appointment of Settlement Class Counsel [Docket No. 205], and Plaintiffs’ Motion for
Preliminary Approval of Settlement with Webber, Meng, Sahl and Company, Inc.,
Certification of Settlement Class, and Appointment of Settlement Class Counsel [Docket
No. 207] filed by plaintiffs Ron Brown and Minka Garmon (collectively the
“representative plaintiffs”). The Court has subject matter jurisdiction pursuant to 28
U.S.C. § 1331.
The representative plaintiffs have reached three settlement agreements with
defendants in this case, namely, with Perdue Farms, Inc. (“Perdue”), Docket No. 170 at
1, Seaboard Foods, LLC (“Seaboard”), Docket No. 205 at 1, and Webber, Meng, Sahl
and Company, Inc. (“WMS”), Docket No. 207 at 1, as well as a cooperation agreement
with defendant Triumph Foods, LLC (“Triumph”). Docket No. 205 at 1. Regarding the
settlement agreement between the representative plaintiffs and Perdue (the “Perdue
settlement”), the representative plaintiffs move for “an order: (1) preliminarily approving
the Settlement Agreement; (2) certifying the Settlement Class. . .; (3) appointing Interim
Co-Lead Counsel as Settlement Class Counsel; (4) appointing Plaintiffs as Settlement
Class Representatives; (5) deferring notice of the Settlement Agreement to the
Settlement Class until an appropriate future date; and (6) ordering a stay of all
proceedings against Perdue except those proceedings provided for or required by the
Settlement Agreement.” Docket No. 170 at 1–2.
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Regarding the settlement agreement between the representative plaintiffs and
Seaboard (the “Seaboard settlement”), and the cooperation agreement between the
representative plaintiffs and Triumph (the “Triumph agreement”), the representative
plaintiffs move for “an order: (1) preliminarily approving the Settlement Agreement; (2)
certifying the Settlement Class. . .; (3) appointing Interim Co-Lead Counsel as
Settlement Class Counsel; (4) appointing Plaintiffs as Settlement Class
Representatives; (5) deferring notice of the Settlement Agreement to the Settlement
Class until an appropriate future date; and (6) ordering a stay of all proceedings against
Settling Defendant’s Released Parties except those proceedings provided for or
required by the Settlement Agreement.” Docket No. 205 at 2.
Regarding the settlement agreement between the representative plaintiffs and
WMS (the “WMS settlement”), the representative plaintiffs move for “an order: (1)
preliminarily approving the Settlement Agreement; (2) certifying the Settlement
Class . . .; (3) appointing Interim Co-Lead Counsel as Settlement Class Counsel; (4)
appointing Plaintiffs as Settlement Class Representatives; (5) deferring notice of the
Settlement Agreement to the Settlement Class until an appropriate future date; and (6)
ordering a stay of all proceedings against WMS except those proceedings provided for
or required by the Settlement Agreement.” Docket No. 207 at 2.
I. BACKGROUND
Plaintiffs filed an amended complaint (“the complaint”) on January 12, 2024.
Docket No. 260. The complaint alleges that representative plaintiffs were employees of
multiple defendants. Id. at 16, ¶¶ 30–31. Specifically, Ron Brown was employed by
Smithfield Farms, Inc., id., ¶ 30, and Minka Garmon was employed by National Beef
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Packing Co., id., ¶ 31. The representative plaintiffs bring this action individually “and on
behalf of a class. . . consisting of all persons employed by Defendants, their
subsidiaries, and related entities at beef- and pork-processing plants in the continental
United States from January 1, 2000, to the present day.” Id. at 7 (footnote omitted).
The complaint clarifies that:
Plaintiffs Ron Brown and Minka Garmon also bring this action on behalf of the
members of a subclass (“Subclass”) consisting of all persons employed by
Defendant Processors, their subsidiaries, and/or related entities at beef- and
pork-processing plants in the continental United States from January 1, 2014
until the date of the first preliminary approval of a settlement in this class action
(“Subclass Period”). The claims of the Class are brought against all Defendants
except WMS, Perdue, Seaboard and Triumph, whereas the claims of the
Subclass are brought solely against WMS, Perdue, Seaboard and Triumph.
Id. at 7 n.2. The original complaint defined the class using the January 1, 2014 date,
which the amended complaint extended to January 1, 2000, with the exception of
defendants WMS, Perdue, Seaboard, and Triumph, each of whom filed a motion for
preliminary approval of a settlement before plaintiffs filed their amended complaint.
Compare Docket No. 1 at 6 with Docket No. 260 at 7; see also Docket Nos. 170, 205,
207. The complaint states that “Defendants include fifteen red meat1 processors and
several of their subsidiaries. . ., which collectively produce more than 80 percent of the
red meat sold to consumers in the United States,” and “two consulting companies,”
including WMS. Docket No. 260 at 7–8, ¶ 2 (footnote added). The complaint alleges
that “[b]eginning by at least January 2000 and continuing to the present day,
Defendants have conspired with each other to fix and depress the compensation paid to
employees of Defendant Processors, their subsidiaries, and related entities at red meat
1 The representative plaintiffs define red meat as beef and pork. Docket No. 260 at 7.
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processing plants in the continental United States,” in violation of Section 1 of the
Sherman Antitrust Act, 15 U.S.C. § 1. Id. at 61–62, ¶ 170.
II. PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT
Approval of a class action settlement under Federal Rule of Civil Procedure 23
takes place in two stages. In the first stage, the Court preliminarily certifies a settlement
class, preliminarily approves the settlement agreement, and authorizes that notice be
given to the class so that interested class members may object to the fairness of the
settlement. In the second stage, after notice is given to the putative class, the Court
holds a fairness hearing at which it will address (1) any timely objections to the
treatment of this litigation as a class action, and (2) any objections to the fairness,
reasonableness, or adequacy of the settlement terms. Fed. R. Civ. P. 23(e)(2); see,
e.g., McReynolds v. Richards-Cantave, 588 F.3d 790, 803 (2d Cir. 2009).
“Preliminary approval of a class action settlement, in contrast to final approval, is
at most a determination that there is . . . ‘probable cause’ to submit the proposal to class
members and hold a full-scale hearing as to its fairness.” In re Crocs, Inc. Sec. Litig.,
No. 07-cv-02351-PAB-KLM, 2013 WL 4547404, at *3 (D. Colo. Aug. 28, 2013) (quoting
Davis v. J.P. Morgan Chase & Co., 775 F. Supp. 2d 601, 607 (W.D.N.Y. 2011)). A
proposed settlement of a class action should therefore be preliminarily approved where
it “appears to be the product of serious, informed, non-collusive negotiations, has no
obvious deficiencies, and does not improperly grant preferential treatment to class
representatives.” See In re Motor Fuel Temperature Sales Practices Litig., 286 F.R.D.
488, 492 (D. Kan. 2012) (internal quotation marks omitted). Although the standards for
preliminary approval of a class action settlement are not as stringent as they are in the
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second stage, id., the standards used in the second stage inform the Court’s preliminary
inquiry. Therefore, it is appropriate to review those standards.
District courts have broad discretion when deciding whether to certify a putative
class. See Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011); Shook v. Bd. of
Cnty. Comm’rs of the Cnty. of El Paso, 386 F.3d 963, 967 (10th Cir. 2004). A district
court may only certify a settlement class if it is “satisfied, after a rigorous analysis,” that
the requirements of Rule 23 are met, and frequently a district court’s “‘rigorous analysis’
will entail some overlap with the merits of the plaintiff’s underlying claim.” Dukes, 564
U.S. at 350-51; see also In re Initial Pub. Offerings Sec. Litig., 471 F.3d 24, 41 (2d Cir.
2006) (holding that “the obligation to make [Rule 23] determinations is not lessened by
overlap between a Rule 23 requirement and a merits issue, even a merits issue that is
identical with a Rule 23 requirement”).
Here, the representative plaintiffs move for certification for the purposes of
settlement with Perdue, Seaboard, and WMS and to receive the benefits of the Triumph
Agreement. Docket No. 170 at 9; Docket No. 205 at 10; Docket No. 207 at 9. A district
court may certify a class action if the proposed class satisfies the prerequisites of Fed.
R. Civ. P. 23(a) as well as the requirements of one of the three types of classes
identified in Rule 23(b). In the typical case where the plaintiff applies for class
certification, plaintiff bears the burden of proving that Rule 23’s requirements are
satisfied. DG ex rel. Stricklin v. Devaughn, 594 F.3d 1188, 1194 (10th Cir. 2010) (citing
Shook, 386 F.3d at 968). Rule 23(a) requires that (1) the class be so numerous that
joinder is impracticable; (2) there are questions of law or fact common to the class; (3)
the claims of the representative parties are typical of those of the class; and (4) the
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representative parties will fairly and adequately protect the interests of the class. Fed.
R. Civ. P. 23(a); In re Literary Works in Elec. Databases Copyright Litig., 654 F.3d 242,
249 (2d. Cir. 2011). A class action may be sustained if these requirements are satisfied
and the class meets the requirements of one of the categories of Rule 23(b). Fed. R.
Civ. P. 23(b).
The representative plaintiffs ask the Court to certify a settlement class under
Rule 23(b)(3). Docket No. 170 at 12; Docket No. 205 at 12; Docket No. 207 at 12.
Under that provision, plaintiffs must show that “questions of law or fact common to class
members predominate over any questions affecting only individual members” and that a
class action “is superior to other available methods for fairly and efficiently adjudicating
the controversy.” Fed. R. Civ. P. 23(b)(3). In determining predominance and superiority
under Rule 23(b)(3), the Court considers the following factors: (A) the class members’
interests in individually controlling the prosecution or defense of separate actions; (B)
the extent and nature of any litigation concerning the controversy already begun by or
against class members; (C) the desirability or undesirability of concentrating the
litigation of the claims in the particular forum; and (D) the likely difficulties in managing a
class action. Fed. R. Civ. P. 23(b)(3)(A)–(D). To certify a settlement class, the Court
need not inquire whether the case, if tried, would present difficult management
problems under Rule 23(b)(3)(D). Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 620
(1997). However, all other Rule 23 requirements apply and demand heightened
attention in the settlement context because the court generally lacks an opportunity to
adjust the class as the case unfolds. Id. If the proposed settlement class satisfies the
requirements of Rules 23(a) and (b), then the court must separately evaluate whether
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the settlement agreement is “fair, reasonable, and adequate” under Rule 23(e).2 Fed.
R. Civ. P. 23(e)(2); In re Am. Int’l Grp., Inc. Sec. Litig., 689 F.3d 229, 238 (2d Cir. 2012).
Because all three motions seek to certify the same class, the Court will simultaneously
analyze whether the class is appropriately certified for all three motions.
If plaintiffs meet the requirements for preliminary approval, the court will direct
notice to all class members who would be bound by the proposal and hold a fairness
hearing to determine if the proposal
is fair, reasonable, and adequate after considering whether: (A) the class
representatives and class counsel have adequately represented the class; (B)
the proposal was negotiated at arm’s length; (C) the relief provided for the class
is adequate, taking into account: (I) the costs, risks, and delay of trial and appeal;
(ii) the effectiveness of any proposed method of distributing relief to the class,
including the method of processing class-member claims; (iii) the terms of any
proposed award of attorney’s fees, including timing of payment; and (iv) any
agreement required to be identified under Rule 23(e)(3); and (D) the proposal
treats class members equitably relative to each other.
Fed. R. Civ. P. 23(e)(2). Although the standards for preliminary approval are not
as stringent as those for final approval, the final approval standards inform the court’s
preliminary inquiry and thus it is appropriate to review them.
A court’s review for final approval is to “focus[] on whether ‘(1) the settlement was
fairly and honestly negotiated, (2) serious legal and factual questions placed the
litigation’s outcome in doubt, (3) the immediate recovery was more valuable than the
mere possibility of a more favorable outcome after further litigation, and (4) [the parties]
believed the settlement was fair and reasonable.’” Elna Sefcovic, LLC v. TEP Rocky
2 The Supreme Court in Amchem cautioned that the fairness inquiry under Rule
23(e) does not supplant the Rule 23(a) and (b) requirements, but instead “function[s] as
an additional requirement.” 521 U.S. at 621.
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Mountain, LLC, 807 F. App’x 752, 757 (10th Cir. 2020) (unpublished) (quoting Tennille
v. W. Union Co., 785 F.3d 422, 434 (10th Cir. 2015)).
III. ANALYSIS OF PROPOSED SETTLEMENT AGREEMENTS
A. Agreements
The representative plaintiffs seek certification of settlement classes consisting of
the same people. Each motion seeks certification of a class of “[a]ll persons employed
by Defendant Processors, their subsidiaries, and/or related entities at beef-processing
or pork-processing plants in the continental United States from January 1, 2014 until the
Date of Preliminary Approval.” Docket No. 170 at 2–3; Docket No. 207 at 2–3; see
Docket No. 205 at 3 (listing the same definition of a proposed class but describing the
range of applicable dates as “January 1, 2014 until the date of the first preliminary
approval of a settlement in this Action”). The following persons and entities are
excluded from the proposed classes: “plant managers; human-resources managers and
staff; clerical staff; guards, watchmen, and salesmen; Defendants, co-conspirators, and
any of their subsidiaries, predecessors, officers, or directors; and federal, state or local
governmental entities.” Docket No. 170 at 3 n.1; Docket No. 205 at 3 n.2.; Docket No.
207 at 3 n.1.
The Perdue settlement provides for a $1,250,000 settlement fund. Docket No.
170-1 at 14–15, § II.A.1. The settlement fund is to “be disbursed in accordance with a
plan of distribution to be approved by the Court. The timing of a motion to approve a
plan of distribution of the Net Settlement Fund created by [the Perdue] Settlement
Agreement shall be in the discretion of Interim Co-Lead Counsel, and may be combined
with a plan to distribute proceeds from other settlements in this Action.” Id. at 24,
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§ II.D.9. The Perdue settlement requires Perdue to cooperate with the representative
plaintiffs in the following ways: producing data on members of the class employed by
Perdue or its subsidiaries, providing declarations or affidavits on the authenticity of
documents, providing documents through designated document custodians, allowing
five current employees of Perdue to be deposed, and assisting the representative
plaintiffs in their efforts to obtain the phone records from third-party carriers. Id. at 15–
18, § II.A.2. In exchange, “this Action shall be dismissed in its entirety with prejudice as
to Perdue.” Id. at 9.
The Seaboard settlement provides for a $10,000,000 settlement fund. Docket
No. 205-3 at 10, § II.A.1. The settlement is to “be disbursed in accordance with a plan
of distribution to be approved by the Court. The timing of a motion to approve a plan of
distribution of the Net Settlement Fund created by this Settlement Agreement shall be in
the discretion of Interim Co-Lead Counsel, and may be combined with a plan to
distribute proceeds from other settlements in this Action.” Id. at 21, § II.D.9. The
Seaboard settlement requires Seaboard to cooperate with the representative plaintiffs’
prosecution of this case in the following ways: producing data on members of the class
employed by “Seaboard Triumph Foods, LLC, or Daily’s Premium Meats, LLC,”
authenticating documents, providing documents through designated document
custodians, allowing five current employees of Seaboard to be deposed and called as
witnesses at trial, assisting the representative plaintiffs in their efforts to obtain phone
records from third-party carriers. Id. at 11–15, § II.A.2. In exchange, “this Action shall
be dismissed in its entirety with prejudice as to [Seaboard] and Triumph Foods, LLC.”
Id. at 4.
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The Triumph agreement is “[c]ontingent on the Court’s preliminary and final
approval of the Settlement Agreement between Class Plaintiffs and Defendant
Seaboard Foods, LLC.” Docket No. 205-4 at 2. The Triumph agreement requires
Triumph to take actions to cooperate with the representative plaintiffs, including
producing data on members of the class who were employed by Triumph or its
subsidiaries, authenticating documents Triumph produces, producing documents and
phone records, and making employees available for depositions. Id. at 3–7, § 1. The
Triumph agreement states that “Triumph shall have the same rights and obligations as
the Settling Defendant as to the sections of the Settlement Agreement pertaining to
Settlement Fund Administration (Sec. II, D) and Approval of Settlement Agreement and
Dismissal of Claims (Sec. II, F).” Id. at 7.
The WMS settlement requires WMS to cooperate with the representative
plaintiffs’ prosecution of this case in the following ways: permit George Jonathan Meng,
Scott Ramsey, and Cynthia Porter to be deposed and called as witnesses at trial and to
use reasonable efforts to provide and authenticate testimony and documents necessary
for plaintiffs prosecution of the case. Docket No. 207-3 at 9, § II.A.1. This is in addition
to the cooperation WMS has already provided through document production and oral
proffers to plaintiffs’ counsel. Id. In exchange, plaintiffs agree to release WMS from any
present and future claims arising out of the alleged conspiracy to fix and depress the
compensation paid to employees of the meat processing defendants. Id. at 9–11,
§ II.B.2.
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B. Numerosity
Rule 23(a)(1) requires that the class membership be sufficiently large to warrant
a class action because the alternative of joinder is impracticable. Fed. R. Civ. P.
23(a)(1). Some courts have held that numerosity may be presumed after a certain
number; however, the Tenth Circuit has never adopted a presumption of numerosity.
Trevizo v. Adams, 455 F.3d 1155, 1162 (10th Cir. 2006) (upholding district court ruling
that a group of eighty-four class members was insufficient to warrant class certification).
Here, the representative plaintiffs state the proposed settlement class likely
includes tens of thousands of persons. Docket No. 170 at 10; Docket No. 205 at 10;
Docket No. 207 at 10. Although the representative plaintiffs do not provide an exact
estimate, the Court finds the number of class members is easily ascertainable because
identifying class members will not “necessitate delving into individualized or subjective
determination.” Evans v. Brigham Young Univ., 2023 WL 3262012, at *5 (10th Cir. May
5, 2023) (unpublished) (quoting 2 Joseph M. McLaughlin, McLaughlin on Class Actions
§ 4:2 (19th ed. updated 2022)). Given Trevizo, the sheer number of class members
does not create a presumption of numerosity; however, given that the Tenth Circuit has
found fewer potential claimants can satisfy numerosity, see, e.g., Rex v. Owens ex rel
St. of Okla., 585 F.2d 432, 436 (10th Cir. 1978) (“Class actions have been deemed
viable in instances where as few as 17 to 20 persons are identified as the class.”), the
Court agrees that joinder of tens of thousands of people would be impracticable and
that the numerosity requirement is met.
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C. Commonality
Rule 23(a) requires a district court to ensure that “there are questions of law or
fact common to the class.” Fed. R. Civ. P. 23(a)(2). Factual differences in the claims of
the individual class members should not result in the denial of class certification where
common questions of law exist. Devaughn, 594 F.3d at 1195. Commonality requires
that plaintiffs demonstrate that the class members have “suffered the same injury” such
that the claims of the class are based on a common contention and that the
determination of the truth or falsity of this contention “will resolve an issue that is central
to the validity of each one of the claims in one stroke.” Dukes, 564 U.S. at 350. In other
words, plaintiffs must have a common question of fact or law that will connect many
individual claims to the relief sought by the class. Ellis v. Costco Wholesale Corp., 657
F.3d 970, 981 (9th Cir. 2011). Even a single common question will satisfy commonality.
Dukes, 564 U.S. at 359.
The representative plaintiffs raise the following common questions of law and fact:
whether defendants agreed to restrain wages, whether the agreement had an impact on
class members, what the relevant market is for the representative plaintiffs’ claims, and
what the amount of damages are. Docket No. 170 at 11; Docket No. 205 at 11; Docket
No. 207 at 10. The Tenth Circuit has acknowledged that “price-fixing affects all market
participants, creating an inference of class-wide impact even when prices are
individually negotiated.” In re Urethane Antitrust Litigation,3 768 F.3d 1245, 1254 (10th
Cir. 2014). Here, a conspiracy to fix wages would affect all employees regardless of
3 The Court notes that In re Urethane does not “relax or shift Plaintiffs’ burden of
proving that antitrust impact presented a common issue.” Black v. Occidental
Petroleum Corp., 69 F.4th 1161, 1182 (10th Cir. 2023).
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individual wage negotiations because the representative plaintiffs allege defendants’
“anticompetitive conduct affected the entire market.” Black, 69 F.4th at 1182.
D. Typicality
Rule 23(a)(3) requires that the “claims or defenses of the representative parties
are typical of the claims or defenses of the class.” Fed. R. Civ. P. 23(a)(3). The
typicality requirement ensures that the absent class members are adequately
represented by the lead plaintiffs such that the interests of the class will be fairly and
adequately protected in their absence. Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147,
157 n.13 (1982). Typicality “is satisfied when each class member’s claim arises from
the same course of events, and each class member makes similar legal arguments to
prove the defendant’s liability.” Marisol A. v. Giuliani, 126 F.3d 372, 376 (2d Cir. 1997).
The interests and claims of the lead plaintiffs and the class members need not be
identical to satisfy typicality and, provided the claims of the lead plaintiff and class
members are based on the same legal or remedial theory, differing fact situations of the
class members do not defeat typicality. Devaughn, 594 F.3d at 1198-99. Nevertheless,
“it is well-established that a proposed class representative is not ‘typical’ under Rule
23(a)(3) if ‘the representative is subject to a unique defense that is likely to become a
major focus of the litigation.’” Marcus v. BMW of N. Am., LLC, 687 F.3d 583, 599 (3d
Cir. 2012) (citation omitted). The representative plaintiffs argue that their claims are
typical to the class claims because all the class members faced the same antitrust
violations. Docket No. 170 at 11; Docket No. 205 at 11; Docket No. 207 at 11. Even
when there are factual differences between plaintiffs in price fixing cases, typicality can
be found. In re Urethane Antitrust Litigation, 237 F.R.D. 440, 447 (D. Kan. 2006). “In
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conspiracy cases, the plaintiffs’ claims are typical of those of the class because the
claims all depend on proof of the antitrust violation by the defendants, not on the
plaintiffs’ individual positions.” Id. Accordingly, the Court agrees that the representative
plaintiffs bring claims that are typical of the proposed class.
E. Adequacy of the Representation
Rule 23(a)(4) requires that the class representatives “fairly and adequately
protect the interests of the class.” Fed. R. Civ. P. 23(a)(4). As the Supreme Court has
noted, the “adequacy-of-representation requirement tends to merge with the
commonality and typicality criteria of Rule 23(a), which serve as guideposts for
determining whether maintenance of a class action is economical and whether the
named plaintiff’s claim and the class claims are so interrelated that the interests of the
class members will be fairly and adequately protected in their absence.” Amchem, 521
U.S. at 626 n.20 (internal quotations omitted). As such, the “inquiry under Rule 23(a)(4)
serves to uncover conflicts of interest between named parties and the class they seek to
represent.” Id. at 625. To be an adequate class representative, the “representative
must be part of the class and possess the same interest and suffer the same injury as
the class members.” Id. at 625–26.
The Tenth Circuit has identified two questions relevant to the adequacy of
representation inquiry: “(1) do the named plaintiffs and their counsel have any conflicts
of interest with other class members and (2) will the named plaintiffs and their counsel
prosecute the action vigorously on behalf of the class?” Rutter & Wilbanks Corp. v.
Shell Oil Co., 314 F.3d 1180, 1187–88 (10th Cir. 2002) (citation omitted). “Adequate
representation depends on, among other factors, an absence of antagonism between
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representatives and absentees, and a sharing of interest between representatives and
absentees.” Ellis, 657 F.3d at 985.
The Court finds that the interests of the class are fairly and adequately protected
by the representative plaintiffs and their counsel. The representative plaintiffs state that
“[e]ach named Plaintiff, like all Settlement Class members, share an overriding interest
in establishing Defendants’ liability and maximizing class-wide damages. And the
named Plaintiffs and their counsel have, and will continue to, prosecute the action
vigorously on behalf of the class.” Docket No. 170 at 12 (footnote omitted); Docket No.
205 at 12; Docket No. 207 at 11–12 (footnote omitted). With regard to the first
adequacy factor, the representative plaintiffs’ interests are aligned with those of the
proposed settlement class because they seek relief for injuries arising out of the same
conspiracy and because they were subject to the same harm, namely, anti-competitive
wages. Further, there is nothing in the record to show any conflict of interest between
the representative plaintiffs or counsel and the rest of the class; any class members
who disagree will be able to challenge this issue at the fairness hearing if they believe
otherwise.
With regard to the second adequacy factor, the proposed class counsel Cohen
Milstein Sellers & Toll, PLLC; Hagens Berman Sobol Shapiro LLP; and Handley Farah
& Anderson PLLC have been functioning as interim co-lead counsel for over a year.
See Docket No. 128 at 2, ¶ 2. Magistrate Judge Hegarty found the interim co-lead
counsel had experience handling class actions, antitrust litigation, and the types of
claims asserted in this action. Id., ¶ 3. The representative plaintiffs claim “[c]ounsel
have extensive experience and expertise in prosecuting complex antitrust litigation
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cases and representing antitrust plaintiffs. Interim co-lead counsel have represented
victims of antitrust conspiracies across the country, and will continue to vigorously
represent the class here.” Docket No. 170 at 12; Docket No. 205 at 12; Docket No. 207
at 11–12. There are no questions regarding the competency of the proposed class
counsel or their ability to prosecute this action and, to the extent any such questions do
arise, they will be considered at the fairness hearing. Accordingly, at this preliminary
stage, because the representative plaintiffs and proposed class counsel do not have a
conflict of interest with the rest of the class and have shown that they can vigorously
litigate on behalf of the class, the Court finds that the representative plaintiffs have
satisfied Rule 23(a)(4)’s requirements. See Rutter, 314 F.3d at 1188.
F. Rule 23(b)(3)
To qualify for certification under Rule 23(b)(3), class questions must
“predominate over any questions affecting only individual members,” and class
resolution must be “superior to other available methods for the fair and efficient
adjudication of the controversy.” Amchem, 521 U.S. at 615. Rule 23(b)(3) states that
courts should consider the following factors when certifying a class: (A) the interest of
members of the class in individually controlling the prosecution or defense of separate
actions; (B) the extent and nature of any litigation concerning the controversy already
commenced by or against members of the class; (C) the desirability of concentrating the
litigation of the claims in the particular forum; and (D) the difficulties likely to be
encountered in the management of a class action. See Fed. R. Civ. P. 23(b)(3)(A)–(D).
Parallel with Rule 23(a)(2)’s commonality element, Rule 23(b)(3)’s predominance
requirement imposes an obligation upon district courts to ensure that issues common to
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the class predominate over those affecting only individual class members. Sullivan v.
DB Investments, Inc., 667 F.3d 273, 297 (3d Cir. 2011). However, the predominance
criterion is “far more demanding” than Rule 23(a)(2)’s commonality requirement.
Amchem, 521 U.S. at 624. Rule 23(b)(3)’s purpose is to “ensure[ ] that the class will be
certified only when it would ‘achieve economies of time, effort, and expense, and
promote . . . uniformity of decision as to persons similarly situated, without sacrificing
procedural fairness or bringing about other undesirable results.’” Cordes & Co. Fin.
Servs., Inc. v. A.G. Edwards & Sons, Inc., 502 F.3d 91, 104 (2d Cir. 2007). Thus, Rule
23(b)(3)’s predominance inquiry tests whether the proposed class is sufficiently
cohesive to warrant adjudication by representation based on “questions that preexist
any settlement.” Amchem, 521 U.S. at 623. In antitrust cases, because price-fixing
affects all market participants, there is an inference of a class-wide impact. Beltran v.
Interexchange, Inc., No. 14-cv-03074-CMA-CBS, 2018 WL 1948687, at *8 (D. Colo.
2018) (citing In re Urethane, 768 F.3d at 1254). This presumption can be extended to
antitrust cases where plaintiffs allege a conspiracy to lower wages across an entire
market. Id. The representative plaintiffs must show proof that is common on a class-
wide basis of the three elements of an antitrust claim: “(1) a violation of the antitrust
laws, (2) that plaintiffs suffered some resulting injury from the violation (also called
impact), and (3) the measure of damages.” In re Urethane, 237 F.R.D. at 449 (citing
Deiter v. Microsoft Corp., 436 F.3d 461, 467 (4th Cir.2006)).
The Court agrees with the representative plaintiffs that common questions
predominate over the other issues. See Docket No. 170 at 12–14; Docket No. 205 at
12–14; Docket No. 207 at 12–14. Proof of a conspiracy between defendants is a
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question that goes to the alleged antitrust violation common to the entire class.
Evidence of market wages and any depression across the wages of defendants’
employees is a common question that goes to the alleged injury. Although the
damages may vary for individuals in the class, the question of what competitive market
wages should have been will be common to the class and is enough at this stage to
show a common question on the measure of damages.
Second, the Court finds that a class action settlement is a superior method for
resolving this dispute fairly and effectively. Settlement avoids duplicative litigation,
saving both class members and defendants significant time and legal costs to
adjudicate common legal and factual issues. In addition, the representative plaintiffs
state the agreements will help them litigate claims against the other defendants. Docket
No. 170 at 3; Docket No. 205 at 4; Docket No. 207 at 7. Additionally, there is no
evidence of analogous antitrust claims. Docket No. 205 at 14. Thus, given that the
class members’ claims arise out of the same series of events, the Court finds that
conducting the class action settlement in this forum would achieve economies of time,
effort, and expense, and promote uniformity of decision to similarly situated persons.
Fed. R. Civ. P. 23(b)(3); Cordes, 502 F.3d at 104. Therefore, because the tens of
thousands of class members will receive the same type of relief and have claims that
present common questions of fact and law, the Court finds that class certification is
appropriate because the class questions predominate over individual questions and the
settlement class is a superior method of resolving this litigation. See Amchem, 521 U.S.
at 623.
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G. Rule 23(e) Factors
Rule 23(e) provides that a proposed settlement may only be approved after a
“finding that it is fair, reasonable, and adequate.” Fed. R. Civ. P. 23(e)(2). In making
this determination, “trial judges bear the important responsibility of protecting absent
class members” and must be “assur[ed] that the settlement represents adequate
compensation for the release of the class claims.” In re Pet Food Prods. Liab. Litig.,
629 F.3d 333, 349 (3d Cir. 2010); see also Amchem, 521 U.S. at 623 (noting that the
Rule 23(e) inquiry “protects unnamed class members from unjust or unfair settlements
affecting their rights when the representatives become fainthearted before the action is
adjudicated or are able to secure satisfaction of their individual claims by a
compromise”) (citations omitted).
To determine whether a proposed settlement is fair, reasonable, and adequate,
courts consider the following factors: (1) whether the proposed settlement was fairly and
honestly negotiated; (2) whether serious questions of law and fact exist, placing the
ultimate outcome of the litigation in doubt; (3) whether the value of an immediate
recovery outweighs the mere possibility of future relief after protracted and expensive
litigation; and (4) the judgment of the parties that the settlement is fair and reasonable.
Rutter, 314 F.3d at 1188. If the settling parties can establish these factors, courts
usually presume that the proposed settlement is fair and reasonable. In re Warfarin
Sodium Antitrust Litig., 391 F.3d 516, 535 (3d Cir. 2004) (applying an “initial
presumption of fairness” to a proposed settlement where: (1) it is the result of arm's
length negotiations; (2) it is based on sufficient discovery; (3) the proponents of the
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settlement are experienced in similar litigation; and (4) only a small fraction of the class
objected).
Based on the information available to the Court, the Court notes the following,
which weighs in favor of preliminary approval: (1) the proposed settlement agreements
are the product of significant negotiations and discussion between the parties over the
course of weeks and months, Docket No. 170 at 6; Docket No. 205 at 7; Docket No. 207
at 6; (2) the parties engaged in robust discussion as to all three agreements, “advised
by sophisticated counsel with expertise on antitrust matters and complex class
litigation,” Docket No. 170 at 6; Docket No. 205 at 7; Docket No. 207 at 6; (3) there is no
evidence that the settlement agreements were the result of a collusive agreement
between the parties. The Court therefore finds that the negotiations were conducted
fairly and honestly. Furthermore, the representative plaintiffs indicate there is serious
disagreement by the parties about whether defendants, including Perdue, Seaboard,
Triumph, and WMS, illegally conspired to depress the compensation of workers for
defendant meat processors. Docket No. 170 at 7; Docket No. 205 at 7; Docket No. 207
at 7. As a result, the Court finds that the serious questions factor weighs in favor of the
proposed settlement agreements.
Next, the Court must determine whether the value of immediate recovery
outweighs the mere possibility of future relief. This factor weighs in favor of the
proposed settlement. The class will be provided with substantial guaranteed relief and
these agreements will cause a simpler litigation process for the remaining claims.
Docket No. 170 at 7–8; Docket No. 205 at 7–8; Docket No. 207 at 7–8. Given the
prospect of shortening what could be prolonged litigation and providing at least partial
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guaranteed relief, the Court finds that immediate recovery outweighs the possibility of
future relief. Accordingly, the Court finds this factor weighs in favor of granting
preliminary approval. With regard to the fourth factor, the representative plaintiffs’
counsel has extensive experience in antitrust litigation and states that the settlement
agreements are fair and reasonable. Docket No. 170 at 8–9; Docket No. 205 at 9;
Docket No. 207 at 8–9. The Court finds this factor weighs in favor of preliminary
approval.
In conclusion, certifying the class will allow the representative plaintiffs to gain
immediate resources to litigate their remaining claims and allow the Court to determine
whether there are other members of the class that challenge the fairness of the parties’
proposed settlement agreement. Should any class member find the terms of the
settlement agreement unfair, he or she may choose not to join the settlement and to
litigate independently or to remain in the case and file objections to the settlement
agreement detailing why it is unfair under the Rule 23 factors. Cf. Grilli v. Metro. Life
Ins. Co., Inc., 78 F.3d 1533, 1536–38 (11th Cir. 1996) (district court did not abuse
discretion in denying motion to intervene, based on the court’s conclusion that proposed
intervenors could protect their interest either by opting out of the class and litigating
separately, or by remaining in the case and, if they thought the proposed settlement
was unfair, objecting to it); In re Crocs, Inc. Sec. Litig., 2013 WL 4547404, at *12
(explaining that party opposing settlement agreement could opt-out or file objections).
The Court finds that the presumption of fairness, see In re Warfarin Sodium, 391 F.3d at
535, is sufficient to preliminarily approve the terms of the proposed settlement
agreements.
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IV. NOTICE TO THE SETTLEMENT CLASS
Under Rule 23(e)(1), a district court approving a class action settlement “must
direct notice in a reasonable manner to all class members who would be bound by the
proposal.” Fed. R. Civ. P. 23(e)(1). Rule 23(c)(2)(B) provides, in relevant part, that for
“any class certified under Rule 23(b)(3), the court must direct to class members the best
notice that is practicable under the circumstances, including individual notice to all
members who can be identified through reasonable effort.” Fed. R. Civ. P. 23(c)(2)(B).
In addition to the requirements of Rule 23, the Due Process Clause also guarantees
unnamed class members the right to notice of a settlement. DeJulius v. New England
Health Care Emps. Pension Fund, 429 F.3d 935, 943–44 (10th Cir. 2005). However,
due process does not require that each class member receive actual notice to be bound
by the adjudication of a representative action. Id. Instead, the procedural rights of
absent class members are satisfied so long as “the best notice practicable [is given]
under the circumstances including individual notice to all members who can be
identified through reasonable effort.” In re Integra Realty Resources, Inc., 262 F.3d at
1110 (citation omitted). Thus, the legal standards for satisfying Rule 23(c)(2)(B) and the
constitutional guarantee of procedural due process are “coextensive and substantially
similar.” DeJulius, 429 F.3d at 944.
The representative plaintiffs request that class notice be deferred because the
representative plaintiffs need to begin discovery to identify everyone in the settlement
class and because deferring notice could provide an opportunity to send notice of
multiple settlements at once. Docket No. 170 at 15; Docket No. 205 at 15; Docket No.
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207 at 14–15. The Court agrees that deferring notice is appropriate under these
circumstances.
V. CLASS COUNSEL
When certifying a class, a court “must appoint class counsel.” Fed. R. Civ. P.
23(g). In appointing class counsel, the Court must consider:
(A)(i) the work counsel has done in identifying or investigating potential
claims in the action; (ii) counsel’s experience in handling class actions, other
complex litigation, and the types of claims asserted in the action; (iii) counsel’s
knowledge of the applicable law; and (iv) the resources that counsel will commit
to representing the class; [and] (B) may consider any other matter pertinent to
counsel’s ability to fairly and adequately represent the interests of the class[.]
Fed. R. Civ. P. 23(g)(1). The settlement agreements list Cohen Milstein Sellers & Toll
PLLC, Hagens Berman Sobol Shapiro LLP, and Handley Farah & Anderson PLLC as
interim lead counsel. Docket No. 170-1 at 12, ¶ 25; Docket No. 205-3 at 8, ¶ 25; Docket
No. 205-4 at 2 n.3; Docket No. 207-3 at 6, ¶ 17. The representative plaintiffs request
that interim lead counsel be appointed as co-lead counsel for the settlement class.
Docket No. 170 at 1; Docket No. 205 at 2; Docket No. 207 at 2. The Court finds that
interim lead counsel have sufficient experience in class actions and their knowledge of
the applicable law, as exhibited in the case up to this point, weighs in favor of their
appointment. Therefore, the Court finds that it is appropriate to appoint Cohen Milstein
Sellers & Toll PLLC; Hagens Berman Sobol Shapiro LLP; and Handley Farah &
Anderson PLLC as co-lead settlement class counsel.
VI. ADDITIONAL PROCEDURES
The Court will require the representative plaintiffs to file their proposed notice to
the Court by March 11, 2024 and require defendants to file any objections on the
representative plaintiffs’ proposed notice by March 21, 2024. Fourteen days after a
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scheduling order is issued in this case, the representative plaintiffs shall provide a
proposed schedule for sending notice of the fairness hearing, the postmark deadline for
receiving notice, filing a motion for final approval, and for the fairness hearing.
Additionally, the representative plaintiffs seek “a stay of all proceedings against
Perdue except those proceedings provided for or required by the Settlement
Agreement,” Docket No. 170 at 2, “a stay of all proceedings against [Seaboard and
Triumph] except those proceedings provided for or required by the Settlement
Agreement.” Docket No. 205 at 2, and “stay of all proceedings against WMS except
those proceedings provided for or required by the Settlement Agreement.” Docket No.
207 at 2. Because these defendants have reached a settlement agreement, the Court
will stay the proceedings against these defendants.
VII. CONCLUSION
For the foregoing reasons, it is
ORDERED that Plaintiffs’ Motion for Preliminary Approval of Settlement with
Perdue Farms, Inc., Certification of Settlement Class, and Appointment of Settlement
Class Counsel [Docket No. 170] is GRANTED. It is further
ORDERED that Plaintiffs’ Motion for Preliminary Approval of Settlement with
Seaboard Foods, LLC, Approval of Cooperation Agreement with Triumph Foods, LLC,
Certification of Settlement Class, and Appointment of Settlement Class Counsel [Docket
No. 205] is GRANTED. It is further
ORDERED that Plaintiffs’ Motion for Preliminary Approval of Settlement with
Webber, Meng, Sahl and Company, Inc., Certification of Settlement Class, and
Appointment of Settlement Class Counsel [Docket No. 207] is GRANTED. It is further
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ORDERED that the representative plaintiffs shall file their proposed notice to the
settlement classes on or before March 11, 2024. It is further
ORDERED that defendants Perdue Farms, Inc., Seaboard Foods, LLC, Triumph
Foods, LLC, and Webber, Meng, Sahl and Company, Inc. shall file any objections to the
representative plaintiffs’ proposed notice on or before March 21, 2024. It is further
ORDERED that, on or before March 29, 2024, the representative plaintiffs shall file
a proposed timeline to complete approval of this settlement. It is further
ORDERED that the case and all related deadlines are STAYED as to Perdue
Farms, Inc., Seaboard Foods, LLC, Triumph Foods, LLC, and Webber, Meng, Sahl and
Company, Inc. except as stated above.
DATED February 27, 2024.
BY THE COURT:
___________________________
PHILIP A. BRIMMER
Chief United States District Judge
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