Notice2023-11388
United States v. Cargill Meat Solutions Corp., et al.; Response of the United States to Public Comments on the Proposed Final Judgments
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
May 30, 2023
Issuing agencies
Justice DepartmentAntitrust Division
Full Text
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<title>Federal Register, Volume 88 Issue 103 (Tuesday, May 30, 2023)</title>
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[Federal Register Volume 88, Number 103 (Tuesday, May 30, 2023)]
[Notices]
[Pages 34518-34522]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-11388]
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DEPARTMENT OF JUSTICE
Antitrust Division
United States v. Cargill Meat Solutions Corp., et al.; Response
of the United States to Public Comments on the Proposed Final Judgments
Notice is hereby given pursuant to the Antitrust Procedures and
Penalties Act, 15 U.S.C. 16(b)-(h), that the Response of the United
States to Public Comments on (a) the proposed Final Judgment as to
Defendants Cargill Meat Solutions Corp. and Cargill, Inc.
(``Cargill''), Wayne Farms, LLC (``Wayne''), and Sanderson Farms, Inc.
(``Sanderson'') (collectively, ``Processor Settling Defendants''); and
(b) the proposed Final Judgment as to Webber, Meng, Sahl and Company,
Inc., d/b/a WMS & Company, Inc. (``WMS'') and G. Jonathan Meng
(``Meng'') (collectively, ``Consultant Settling Defendants'') has been
filed with the United States District Court for the District of
Maryland in United States of America v. Cargill Meat Solutions Corp.,
et al., Civil Action No. 22-cv-1821.
Copies of the Public Comments and the United States' Response are
available for inspection on the Antitrust Division's website at <a href="http://www.justice.gov/atr">http://www.justice.gov/atr</a>.
Suzanne Morris,
Deputy Director Civil Enforcement Operations, Antitrust Division.
United States District Court for the District of Maryland
United States of America, Plaintiff, v. Cargill Meat Solutions
Corporation, et al., Defendants.
Civil Action No.: 22-cv-1821
Response of Plaintiff United States to Public Comments on the Proposed
Final Judgments
Pursuant to the Antitrust Procedures and Penalties Act, 15 U.S.C.
16(b)-(h) (the ``Tunney Act''), the United States of America responds
to the public comments received by the United States about (a) the
proposed Final Judgment in this case as to Defendants Cargill Meat
Solutions Corp. and Cargill, Inc. (``Cargill''), Wayne Farms, LLC
(``Wayne''), and Sanderson Farms, Inc. (``Sanderson'') (collectively,
``Processor Settling Defendants''); and (b) the proposed Final Judgment
in this case as to Webber, Meng, Sahl and Company, Inc., d/b/a WMS &
Company, Inc. (``WMS'') and G. Jonathan Meng (``Meng'') (collectively,
``Consultant Settling Defendants''). The Processor Settling Defendants
and the Consultant Settling Defendants are collectively the ``Settling
Defendants.''
After this Response has been published in the Federal Register,
pursuant to 15 U.S.C. 16(d), the United States will move that the Court
enter the proposed Final Judgments.\1\
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\1\ On January 27, 2023, the United States moved the Court to
permit the United States to publish the public comments on the
Antitrust Division's website, due to the expense of publishing the
comments in the Federal Register and the accessibility to the public
of the Division's website. Those comments can be accessed at
<a href="http://www.justice.gov/atr">www.justice.gov/atr</a>.
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After careful consideration of the comments submitted, the United
States continues to believe that the proposed remedies will address the
harm alleged in the Complaint and are therefore in the public interest.
The proposed Final Judgments will prevent the Settling Defendants from
conspiring to (1) assist their competitors in making compensation
decisions, (2) exchange current and future, disaggregated, and
identifiable compensation information, and (3) facilitate this
anticompetitive agreement. The United States appreciates that some
commenters believe that other significant issues remain in the poultry
industry. And the United States does not contend that the proposed
Final Judgments address all potential issues in the poultry industry.
The question before the court, however, is limited to whether the
proposed Final Judgments appropriately address the antitrust claims
alleged in the Complaint against the Settling Defendants. Upon a
thorough review of the comments, the United States believes that the
proposed Final Judgments do resolve those claims in the public
interest.
I. Procedural History
On July 25, 2022, the United States filed a civil Complaint against
the Settling Defendants to enjoin them from collaborating on decisions
about poultry plant worker compensation, including through the exchange
of compensation information, which suppressed competition in the
nationwide and local labor markets for poultry processing. The
Complaint alleges that this conduct is anticompetitive and violates
Section 1 of the Sherman Act, 15 U.S.C. 1. The Complaint also alleges
that Defendants Sanderson and Wayne acted deceptively in the manner in
which they compensated poultry growers in violation of Section 202(a)
of the Packers and Stockyards Act, 1921, as amended and supplemented, 7
U.S.C. 192(a) (the ``PSA''). As explained below, the proposed
settlement as to the PSA claim is not subject to review under the
Tunney Act.
Contemporaneously, the United States filed the proposed Final
Judgments as to the Processor Settling Defendants \2\ and the
Consultant Settling Defendants, as well as Stipulations signed by these
parties that consent to entry of the proposed Final Judgments after
compliance with the requirements of the Tunney Act. (ECF 2 & 3.) On
September 12, 2022, the United States filed a Competitive Impact
Statement describing the proposed Final Judgments. (ECF 37.)
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\2\ On July 22, 2022, the Processor Settling Defendants
announced that a joint venture of Cargill and Wayne acquired
Sanderson. The terms of the proposed Final Judgment apply to all
successors of the Processor Settling Defendants.
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The United States arranged for the publication of the Complaint,
the proposed Final Judgments, and the Competitive Impact Statement in
the Federal Register on September 16, 2022, and caused notice regarding
the same, together with directions for the submission of written
comments relating to the proposed Final
[[Page 34519]]
Judgments, to be published in The Washington Post every day from
September 15-21, 2022. The 60-day period for public comment has now
ended. The United States received five public comments in response,
which are described below and attached as Exhibit A hereto.\3\
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\3\ The United States received these public comments on October
11, 2022, November 15, 2022 (two comments), November 16, 2022, and
November 17, 2022. In Exhibit 1 attached herein, the United States
has redacted any personally identifying information relating to the
authors of the comments.
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II. Standard of Judicial Review
The Clayton Act, as amended by the Tunney Act, requires that
proposed consent judgments in cases brought by the United States under
the antitrust laws be subject to a 60-day comment period, after which
the court shall determine whether entry of the proposed Final Judgments
``is in the public interest.'' 15 U.S.C. 16(e)(1). In making that
determination, the court, in accordance with the statute as amended in
2004, is required to consider:
(A) the competitive impact of such judgment, including
termination of alleged violations, provisions for enforcement and
modification, duration of relief sought, anticipated effects of
alternative remedies actually considered, whether its terms are
ambiguous, and any other competitive considerations bearing upon the
adequacy of such judgment that the court deems necessary to a
determination of whether the consent judgment is in the public
interest; and
(B) the impact of entry of such judgment upon competition in the
relevant market or markets, upon the public generally and
individuals alleging specific injury from the violations set forth
in the complaint including consideration of the public benefit, if
any, to be derived from a determination of the issues at trial.
15 U.S.C. 16(e)(1)(A) & (B).
In considering these statutory factors, the court's inquiry is
necessarily a limited one, because the government is entitled to
``rather broad discretion to settle with the defendant within the
reaches of the public interest.'' United States v. Microsoft Corp., 56
F.3d 1448, 1461 (D.C. Cir. 1995); see generally United States v. U.S.
Airways Grp., Inc., 38 F. Supp. 3d 69, 75 (D.D.C. 2014) (explaining
that the ``court's inquiry is limited'' in Tunney Act settlements);
United States v. SBC Commc'ns, Inc., 489 F. Supp. 2d 1 (D.D.C. 2007)
(assessing public-interest standard under the Tunney Act); United
States v. Charleston Area Med. Ctr., No. 2:16-cv-3664, 2016 WL 6156172,
at *2 (S.D. W. Va. Oct. 21, 2016) (noting that in evaluating whether
the proposed final judgment is in the public interest, the inquiry is
``a narrow one'' and only requires the court to determine if the remedy
effectively addresses the harm identified in the complaint); United
States v. InBev N.V./S.A., No. 08-cv-1965, 2009 U.S. Dist. LEXIS 84787,
at *3 (D.D.C. Aug. 11, 2009) (noting that the court's review of a
consent judgment is limited, as the court only inquires ``into whether
the government's determination that the proposed remedies will cure the
antitrust violations alleged in the complaint was reasonable, and
whether the mechanisms to enforce the final judgment are clear and
manageable'').
As the United States Court of Appeals for the District of Columbia
Circuit has held, under the Tunney Act, a court considers the
relationship between the remedy secured and the specific allegations in
the government's complaint, whether the decree is sufficiently clear,
whether its enforcement mechanisms are sufficient, and whether the
decree may positively harm third parties, among other factors. See
Microsoft, 56 F.3d at 1458-62. With respect to the adequacy of the
relief secured by the decree, a court may not ``engage in an
unrestricted evaluation of what relief would best serve the public.''
United States v. BNS, Inc., 858 F.2d 456, 462 (9th Cir. 1988) (quoting
United States v. Bechtel Corp., 648 F.2d 660, 666 (9th Cir. 1981)); see
also Microsoft, 56 F.3d at 1460-62; United States v. Alcoa, Inc., 152
F. Supp. 2d 37, 40 (D.D.C. 2001); InBev, 2009 U.S. Dist. LEXIS 84787,
at *3. Instead,
[t]he balancing of competing social and political interests affected
by a proposed antitrust consent decree must be left, in the first
instance, to the discretion of the Attorney General. The court's
role in protecting the public interest is one of insuring that the
government has not breached its duty to the public in consenting to
the decree. The court is required to determine not whether a
particular decree is the one that will best serve society, but
whether the settlement is ``within the reaches of the public
interest.'' More elaborate requirements might undermine the
effectiveness of antitrust enforcement by consent decree.
Bechtel, 648 F.2d at 666 (emphasis added) (citations omitted).\4\
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\4\ See also BNS, 858 F.2d at 464 (holding that the court's
``ultimate authority under the [Tunney Act] is limited to approving
or disapproving the consent decree''); United States v. Gillette
Co., 406 F. Supp. 713, 716 (D. Mass. 1975) (noting that the court is
constrained to ``look at the overall picture not hypercritically,
nor with a microscope, but with an artist's reducing glass'').
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In determining whether a proposed settlement is in the public
interest, a district court ``must accord deference to the government's
predictions about the efficacy of its remedies, and may not require
that the remedies perfectly match the alleged violations.'' SBC
Commc'ns, 489 F. Supp. 2d at 17; see also U.S. Airways, 38 F. Supp. 3d
at 74-75 (noting that a court should not reject the proposed remedies
because it believes others are preferable and that room must be made
for the government to grant concessions in the negotiation process for
settlements); Microsoft, 56 F.3d at 1461 (noting the need for courts to
be ``deferential to the government's predictions as to the effect of
the proposed remedies''); United States v. Archer-Daniels-Midland Co.,
272 F. Supp. 2d 1, 6 (D.D.C. 2003) (noting that the court should grant
``due respect to the government's prediction as to the effect of
proposed remedies, its perception of the market structure, and its
views of the nature of the case''). The ultimate question is whether
``the remedies [obtained in the decree are] so inconsonant with the
allegations charged as to fall outside of the `reaches of the public
interest.' '' Microsoft, 56 F.3d at 1461 (quoting United States v.
Western Elec. Co., 900 F.2d 283, 309 (D.C. Cir. 1990)). To meet this
standard, the United States ``need only provide a factual basis for
concluding that the settlements are reasonably adequate remedies for
the alleged harms.'' SBC Commc'ns, 489 F. Supp. 2d at 17.
Moreover, the court's role under the Tunney Act is limited to
reviewing the remedy in relationship to the violations that the United
States has alleged in its complaint, and does not authorize the court
to ``construct [its] own hypothetical case and then evaluate the decree
against that case.'' Microsoft, 56 F.3d at 1459; see also U.S. Airways,
38 F. Supp. 3d at 75 (noting that the court must simply determine
whether there is a factual foundation for the government's decisions
such that its conclusions regarding the proposed settlements are
reasonable); InBev, 2009 U.S. Dist. LEXIS 84787, at *20 (``the `public
interest' is not to be measured by comparing the violations alleged in
the complaint against those the court believes could have, or even
should have, been alleged''). Because the ``court's authority to review
the decree depends entirely on the government's exercising its
prosecutorial discretion by bringing a case in the first place,'' it
follows that ``the court is only authorized to review the decree
itself,'' and not to ``effectively redraft the complaint'' to inquire
into other matters that the United States did not pursue. Microsoft, 56
F.3d at 1459-60.
[[Page 34520]]
In its 2004 amendments to the Tunney Act,\5\ Congress made clear
its intent to preserve the practical benefits of employing consent
decrees in antitrust enforcement, stating that ``[n]othing in this
section shall be construed to require the court to conduct an
evidentiary hearing or to require the court to permit anyone to
intervene.'' 15 U.S.C. 16(e)(2); see also U.S. Airways, 38 F. Supp. 3d
at 76 (indicating that a court is not required to hold an evidentiary
hearing or to permit intervenors as part of its review under the Tunney
Act). This language made explicit what Congress intended when it first
enacted the Tunney Act in 1974. As Senator Tunney explained: ``[t]he
court is nowhere compelled to go to trial or to engage in extended
proceedings which might have the effect of vitiating the benefits of
prompt and less costly settlement through the consent decree process.''
119 Cong. Rec. 24,598 (1973) (statement of Sen. Tunney). Rather, the
procedure for the public-interest determination is left to the
discretion of the court, with the recognition that the court's ``scope
of review remains sharply proscribed by precedent and the nature of
Tunney Act proceedings.'' SBC Commc'ns, 489 F. Supp. 2d at 11. A court
can make its public-interest determination based on the competitive
impact statement and response to public comments alone. U.S. Airways,
38 F. Supp. 3d at 76; see also United States v. Enova Corp., 107 F.
Supp. 2d 10, 17 (D.D.C. 2000) (noting that the ``Tunney Act expressly
allows the court to make its public interest determination on the basis
of the competitive impact statement and response to comments alone'');
S. Rep. No. 93-298 93d Cong., 1st Sess., at 6 (1973) (``Where the
public interest can be meaningfully evaluated simply on the basis of
briefs and oral arguments, that is the approach that should be
utilized.'').
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\5\ The 2004 amendments substituted ``shall'' for ``may'' in
directing relevant factors for a court to consider and amended the
list of factors to focus on competitive considerations and to
address potentially ambiguous judgment terms. Compare 15 U.S.C.
16(e) (2004), with 15 U.S.C. 16(e)(1) (2006); see also SBC Commc'ns,
489 F. Supp. 2d at 11 (concluding that the 2004 amendments
``effected minimal changes'' to Tunney Act review).
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III. The Investigation, the Harm Alleged in the Complaint, and the
Proposed Final Judgments
The proposed Final Judgments are the culmination of a thorough,
comprehensive investigation conducted by the Antitrust Division of the
U.S. Department of Justice regarding the Settling Defendants'
conspiracy to collaborate on decisions about poultry plant worker
compensation, exchange compensation information, and facilitate such
conduct through data consultants. Based on the evidence gathered, the
United States concluded that this collaboration and information-sharing
was anticompetitive and violated Section 1 of the Sherman Act, 15
U.S.C. 1, because it suppressed competition in the nationwide and local
labor markets for poultry processing plant workers. This conspiracy
distorted the competitive process, disrupted the competitive mechanism
for setting wages and benefits, and harmed a generation of poultry
processing plant workers by unfairly suppressing their compensation.
Specifically, the United States concluded that, from 2000 or
before, the Processor Settling Defendants, Consulting Settling
Defendants, and their poultry processing and consultant co-conspirators
exchanged compensation information through the dissemination of survey
reports in which they shared current and future, detailed, and
identifiable plant-level and job-level compensation information for
poultry processing plant workers. The shared information allowed
poultry processors to determine the wages and benefits their
competitors were paying--and planning to pay--for specific job
categories at specific plants.
The United States further concluded that the Processor Settling
Defendants and their co-conspirators exchanged confidential,
competitively sensitive information about poultry plant workers at
annual meetings, which they attended in person. From at least 2000 to
2002 and 2004 to 2019, the Consultant Settling Defendants facilitated,
supervised, and participated in these annual in-person meetings among
the Processor Settling Defendants and their co-conspirators and
facilitated their exchange of information about poultry processing
worker compensation information.
The Processor Settling Defendants' and their co-conspirators'
collaboration on compensation decisions and exchange of competitively
sensitive compensation information extended beyond the shared survey
reports and in-person annual meetings. The Processor Settling
Defendants and their co-conspirators repeatedly contacted each other to
seek and provide advice and assistance on poultry processing worker
compensation decisions, including by sharing further non-public
information regarding each other's wages and benefits. This
demonstrates a clear agreement between competitors to ask for help with
compensation decisions and to provide such help to others upon request.
In sum, this conspiracy enabled the Processor Settling Defendants
and their co-conspirators to collaborate with and assist their
competitors in making decisions about worker compensation, including
wages and benefits, and to exchange information about current and
future compensation plans. Through this conspiracy, the Processor
Settling Defendants artificially suppressed compensation for poultry
processing workers.
The proposed Final Judgments provide effective and appropriate
remedies for this competitive harm. They have several components, which
the Settling Defendants agreed to abide by during the pendency of the
Tunney Act proceedings and which the Court ordered in the Stipulations
and Orders of July 26, 2022 (ECF 11 & 12).
Among other terms, the proposed Final Judgment for the Processor
Settling Defendants requires the Processor Settling Defendants to:
a. end their agreement to collaborate with and assist in making
compensation decisions for poultry processing workers and their
anticompetitive exchange of compensation information with other poultry
processors;
b. submit to a monitor (determined by the United States in its sole
discretion) for a term of 10 years, who will examine the Processor
Settling Defendants' compliance with both the terms of the proposed
Final Judgment and U.S. federal antitrust law generally, across their
entire poultry businesses; and
c. provide significant and meaningful restitution to the poultry
processing workers harmed by their anticompetitive conduct, who should
have received competitive compensation for their valuable, difficult,
and dangerous labor.
The proposed Final Judgment for the Processor Settling Defendants
also prohibits the Processor Settling Defendants from retaliating
against any employee or third party for disclosing information to the
monitor, an antitrust enforcement agency, or a legislature, among other
terms.
Under the proposed Final Judgment for the Consultant Settling
Defendants, the Consultant Settling Defendants are restrained and
enjoined from:
a. providing survey services involving confidential competitively
sensitive information;
b. participating in non-public trade association meetings that
involve either the exchange of confidential competitively sensitive
information or involve the business of poultry processing; and
[[Page 34521]]
c. engaging in non-public communications with any person engaged in
the business of poultry processing other than as a party or fact
witness in litigation, among other terms.
Each proposed Final Judgment provides that it will expire 10 years
from the date of its entry, except that after five years from the date
of its entry, each Final Judgment may be terminated upon notice by the
United States to the Court and the relevant Settling Defendants that
continuation of the relevant Final Judgment is no longer necessary or
in the public interest.
IV. Summary of Public Comments and the United States' Response
The United States did not receive any public comments concerning
the proposed Final Judgment relating to the Consultant Settling
Defendants and received five comments concerning the proposed Final
Judgment relating to the Processor Settling Defendants. These comments
were submitted by Professor Peter C. Carstensen (``Carstensen
Comment''); Ms. Trina B. McClendon (``McClendon Comment''); Farm Action
(``Farm Action Comment''); the Campaign for Family Farms and the
Environment (``CFFE Comment''); and the Campaign for Contract
Agriculture Reform (``CCAR Comment'').
Professor Carstensen is the Fred W. & Vi Miller Chair in Law
Emeritus at University of Wisconsin Law School. While now retired,
during his professional career Professor Carstensen specialized in
antitrust law with a particular interest in competition issues in
agricultural markets.\6\ He credits the United States for challenging
the information-sharing conduct as anticompetitive and asks the
Antitrust Division and the FTC to revisit its shared guidance ``to
emphasize that such conduct among rivals is likely to be unlawful.''
\7\ He also approves of the provisions relating to the tournament
system for poultry growers and the PSA.\8\ However, Professor
Carstensen expresses concern that the United States has not yet brought
suit against the other conspirators in the information-sharing conduct
and asks the Court to seek assurance from the United States that it
will.\9\ Finally, he argues that the proposed Final Judgment's
prohibitions on exchanging information should forbid the exchange of
confidential business information of any kind.\10\
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\6\ Carstensen Comment at 1.
\7\ Id. at 1-2.
\8\ Id. at 2.
\9\ Id.
\10\ Id.
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Ms. McClendon is the owner/operator of Trinity Poultry Farm, LLC,
an eight-house poultry farm in Amite County, Mississippi, where she has
grown chickens for Sanderson for two decades.\11\ Her comments argue
``against the buyout of Sanderson Farms by Cargill and Continental
Grain,'' \12\ and she encourages the United States to ``[s]top the
consolidation of America's food and put the farmer first.'' \13\ Ms.
McClendon also details problems with the tournament system for poultry
growers--which she argues ``should be overhauled and reconstructed''--
including ``grower pay extortion by integrators'' and a ``lack of
transparency.'' \14\ She asks that the United States ``reverse this
proposed Final Judgment''; ``stop this buyout'' of Sanderson by Cargill
and Wayne; ``strip these companies of their right to continue doing
business unchecked''; and ``in addition to the $84 million fine that
you assessed to these companies for wage suppression, an additional
fine be assessed to directly aid all growers who have suffered for the
last thirty years under the weight of undue and unfair pressure brought
to bear by these corporate Goliath's.'' \15\ Ms. McClendon also warns
that the Settling Defendants will ``manipulate this proposed Final
Judgment to their benefit.'' \16\
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\11\ McClendon Comment at 1.
\12\ Id. at 1
\13\ Id. at 2.
\14\ Id. at 2-3; see generally id. at 3-7. While Ms. McClendon
describes issues relating to the tournament system, she does not
discuss the provisions of the proposed Final Judgments related to
the tournament system and the PSA.
\15\ Id. at 7.
\16\ Id. at 1.
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Farm Action is ``a farmer-led advocacy organization dedicated to
building a food and agriculture system that works for everyday people
instead of a handful of powerful corporations.'' \17\ Farm Action's
comment asks the Court to enter the proposed Final Judgment ``in its
entirety,'' calling it fair, adequate, and reasonable.\18\ Farm Action
does not critique or suggest any changes to the proposed Final
Judgments.
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\17\ Farm Action Comment at 1.
\18\ Id. at 25, 4.
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CFFE is a coalition of state and national organizations that works
``to support family farmers, rural communities and a vibrant,
sustainable food system.'' \19\ CFFE approves of the Division's
enforcement of the PSA and ``long overdue enforcement action with
respect to how poultry companies treat both processing plant workers
and contract poultry growers.'' \20\ CFFE calls for the court-appointed
monitor to ensure that the parties do not attempt to evade the proposed
Final Judgment's grower requirements.\21\ CFFE also asks the United
States to expand its action under the PSA and its investigation into
information-sharing related to plant worker compensation to include
other growers and information-sharing related to growers.\22\ CFFE
expresses disappointment that the United States did not challenge the
Sanderson acquisition.\23\
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\19\ CFFE Comment at 1.
\20\ Id. at 2.
\21\ Id. at 3.
\22\ Id.
\23\ Id. at 1.
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CCAR ``represents farmers, ranchers, and poultry growers across the
United States.'' \24\ CCAR ``greatly appreciate[s]'' and is ``very
supportive'' of the provisions of the proposed Final Judgment ``that
prohibit conduct that directly affects poultry growers,'' although it
urges the court-appointed monitor to take care that the parties to
which these provisions apply do not find a way to circumvent them.\25\
CCAR recommends the United States challenge future consolidation in
agricultural markets and re-examine past mergers and states it was
disappointed that the acquisition of Sanderson by Cargill and Wayne
``was allowed to proceed.'' \26\ It also urges the Division to broaden
its inquiry into information-sharing in the poultry industry to include
sharing related to growers and production details.\27\
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\24\ CCAR Comment at 1.
\25\ Id. at 5-6.
\26\ Id. at 4-5.
\27\ Id. at 8.
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* * * * *
While the United States takes seriously all of the issues raised in
the public comments, much of the CCAR and CFFE Comments and all of the
McClendon Comment focus on either the portion of the Processor Settling
Defendants' proposed Final Judgment relating to the PSA or on the
acquisition of Sanderson by Cargill and Wayne, rather than on whether
the proposed Final Judgments adequately resolve the antitrust claims
against the Settling Defendants for collaborating on decisions about
poultry plant worker compensation, including through the exchange of
compensation information, and facilitating this anticompetitive
agreement.
The Tunney Act applies only to final judgments or decrees in
proceedings brought by the United States under the antitrust laws. See
15 U.S.C. 16. The PSA is not an antitrust law. Thus, the provisions of
the proposed Final
[[Page 34522]]
Judgments related to the PSA are not subject to Tunney Act review.\28\
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\28\ Competitive Impact Statement at 3; see also 15 U.S.C.
12(a). The PSA-related provisions include changes to compensation
and disclosure requirements for Sanderson and Wayne growers.
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Comments regarding the acquisition of Sanderson are also not
subject to Tunney Act review in this matter because the Complaint does
not challenge the Sanderson acquisition. Rather, the Complaint alleges
that the Settling Defendants' multi-decade collaboration on
compensation decisions, sharing of compensation information, and
facilitation of such conduct was anticompetitive and that Wayne and
Sanderson violated the Packers and Stockyards Act. Under the Tunney
Act, the court reviews only whether the proposed remedies address the
violations the United States has alleged in its complaint.\29\
Potential harms arising from that acquisition that were identified by
some public comments are therefore outside the permissible scope of
review under the Tunney Act.\30\
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\29\ See Microsoft, 56 F.3d at 1459. Because the ``court's
authority to review the decree depends entirely on the government's
exercising its prosecutorial discretion by bringing a case in the
first place,'' it follows that ``the court is only authorized to
review the decree itself,'' and not to ``effectively redraft the
complaint'' to inquire into other matters that the United States did
not pursue. Id. at 1459-60.
\30\ The United States has statutory authority to review certain
proposed transactions under the Hart-Scott-Rodino Act, 15 U.S.C.
18a, but contrary to some of the public comments the United States
does not ``approve'' transactions. See, e.g., Steves and Sons, Inc.
v. JELD-WEN, Inc., 988 F.3d 690, 713-14 (4th Cir. 2021) (``The
Department's decision not to pursue the matter isn't probative as to
the merger's legality because many factors may motivate such a
decision, including the Department's limited resources.''); see also
In re High Fructose Corn Syrup Antitrust Litig., 295 F.3d 651, 664
(7th Cir. 2002).
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The United States understands that some of the commenters are
advocating for additional enforcement in the poultry industry. Parts of
the CCAR and CFFE Comments urge the United States to continue working
to address ``the antitrust implications of industry data sharing
activities.'' \31\ The Carstensen Comment focuses almost wholly on
information-sharing; it asks the United States to continue pursuing
other conspirators, to ``forbid any exchange of confidential business
information of any kind'' between the Settling Defendants, and to
``revisit [its] outdated guidance on information exchange to emphasize
that such conduct among rivals is likely to be unlawful absent
specific, limited justifications.'' \32\
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\31\ CFFE Comment at 3 (highlighting the impact of such
information-sharing on poultry growers); CCAR Comment at 8
(recommending the United States ``consider the anti-trust
implications of such data sharing arrangements regarding poultry
growers and production details as well'').
\32\ Carstensen Comment at 2.
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The United States does not contend that the proposed Final
Judgments resolve all issues in the poultry industry, but these
comments are outside the scope of Tunney Act review. They concern
conduct not challenged in the Complaint and thus do not provide a basis
for measuring the relief included in the proposed Final Judgments.\33\
The proposed Final Judgments do address the claims raised against the
Settling Defendants.
Additionally, the United States believes the proposed Final
Judgments demonstrate to companies both inside and outside the poultry
industry that anticompetitive information-sharing risks significant
legal consequences, and the broad scope of the monitor contained in the
proposed Final Judgments provides protection against anticompetitive
information-sharing in contexts other than poultry processing
compensation. The United States takes the conduct alleged in the
Complaint seriously; the investigation into such conduct is ongoing and
the United States will pursue additional claims where the evidence and
the law justifies action. Members of the public are encouraged to
submit information about potentially unlawful exchanges of information
between competitors to the Department of Justice Antitrust Division's
Citizen Complaint Center (<a href="https://www.justice.gov/atr/citizen-complaint-center">https://www.justice.gov/atr/citizen-complaint-center</a>).
V. Conclusion
After careful consideration of the public comments, the United
States continues to believe the proposed Final Judgments provide an
effective and appropriate remedy for the antitrust violations alleged
in the Complaint and are therefore in the public interest. The United
States will move this Court to enter the proposed Final Judgments after
the public comments and this response are published as required by 15
U.S.C. 16(d).
Dated: May 23, 2023.
Respectfully submitted,
FOR PLAINTIFF UNITED STATES OF AMERICA
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Kathleen Simpson Kiernan,
U.S. Department of Justice, Antitrust Division, Civil Conduct Task
Force, 450 Fifth Street NW, Suite 8600, Washington, DC 20530, Tel:
202-353-3100, Fax: 202-616-2441, Email: <a href="/cdn-cgi/l/email-protection#642f05100c0801010a4a2f0d01160a050a241117000b0e4a030b12"><span class="__cf_email__" data-cfemail="460d27322e2a232328680d2f233428272806333522292c68212930">[email protected]</span></a>.
[FR Doc. 2023-11388 Filed 5-26-23; 8:45 am]
BILLING CODE 4410-11-P
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