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Smithfield paying $83m to settle price-fixing lawsuit

Company denies liability but decides it is best to negotiate settlement.

Smithfield Foods Inc. has reached an agreement to settle all direct-purchaser class claims asserted against the company in antitrust litigation currently pending in federal court in Minnesota. Under the agreement, the company will settle all direct-purchaser class claims for a single payment of $83 million.

“While we deny any liability in these cases and believe that our conduct has always been lawful, we decided that it was in the best interests of the company to negotiate a settlement at this time,” stated Keira Lombardo, chief administrative officer of Smithfield. “This settlement eliminates a substantial portion of our exposure in the antitrust litigation for an amount that we believe is in the best interests of our company, as well as our employees, customers and consumers.”

The settlement also significantly reduces the distraction, expense, exposure and inconvenience of protracted litigation, allowing the company to focus on executing its long-term strategy, Lombardo added.

The terms of the settlement are subject to Court approval following notice to all class members. While the company expects that the Court will grant final approval of the settlement, there can be no guarantee that the Court will approve the terms of the agreement as proposed by the parties.

Last October, the lawsuits that alleged several large pork companies had engaged in a price-fixing scheme from at least 2009 to the present day were reopened. The case consolidated 13 separately filed putative class actions against Smithfield, Tyson Foods, Hormel Foods, Clemens Food Group, Seaboard Foods, Triumph Foods, Indiana Packers, JBS and Agri Stats.

There are three categories of class action plaintiffs who purchased, either directly or indirectly, pork products from one of the defendants. All three alleged that defendants engaged in a price-fixing conspiracy to artificially constrict the supply of pork products in the domestic U.S. market.

JBS has reached three different settlements in the case for a total amount of $57.25 million.

 

TAGS: Business
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