Maplevale Farms, Inc. v. Koch Foods, Inc. et alMOTIONN.D. Ill.April 15, 20191 UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION IN RE BROILER CHICKEN ANTITRUST LITIGATION This Document Relates To: Associated Grocers of the South, Inc., et al. v. Tyson Foods, Inc., et al. (Case No. 1:18-cv- 4616) Case No. 1:16-cv-08637 The Honorable Thomas M. Durkin Magistrate Judge Jeffrey T. Gilbert MOTION FOR LEAVE TO FILE INSTANTER AN AMENDED COMPLAINT NUNC PRO TUNC TO APRIL 15, 2019 Pursuant to Federal Rules of Civil Procedure 15(a) and 20(a), Plaintiffs Associated Grocers of the South, Inc., Meijer, Inc., Meijer Distribution, Inc., OSI Restaurant Partners, LLC, Publix Super Markets, Inc., SuperValu Inc., Unified Grocers, Inc., Associated Grocers of Florida, Inc., and Wakefern Food Corporation (collectively, “Plaintiffs”), respectfully move for leave to file instanter a First Amended Complaint (the “Amended Complaint”),1 nunc pro tunc to April 15, 2019. In support of their request, Plaintiffs state the following: 1. Plaintiffs filed their Complaint in this action on July 3, 2018 (Dkt. 1102-1), alleging that Defendants conspired to restrain trade and raise the price of Broilers in violation of Section 1 of the Sherman Act. 1 Attached as Exhibit 1 is a copy of Plaintiffs’ proposed Amended Complaint, to be signed by the undersigned counsel. A redline of the Amended Complaint against the initial Complaint is attached as Exhibit 2. Case: 1:16-cv-08637 Document #: 2053 Filed: 04/15/19 Page 1 of 9 PageID #:91932 2 2. On September 13, 2018, the Court entered Scheduling Order No. 7 (Dkt. 1231), which set a deadline of April 15, 2019, for the Direct Action Plaintiffs, including Plaintiffs, to amend their complaints. 3. Rule 15 provides that “[t]he [C]ourt should freely give leave when justice so requires.” The U.S. Supreme Court, interpreting Rule 15, instructs that “[i]n the absence of any apparent or declared reason—such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc.—the leave sought should, as the rules require, be ‘freely given.’ ” Foman v. Davis, 371 U.S. 178, 182 (1962). 4. This is the first time that Plaintiffs have requested leave to amend their Complaint. New claims regarding Georgia Dock price index 5. Through discovery, Plaintiffs have uncovered facts to support adding certain causes of action against some of the existing Defendants that caused injury to Plaintiff, namely, that the Georgia Dock Defendants as defined in Plaintiffs’ Amended Complaint engaged in conduct violating the Georgia Racketeer Influenced and Corrupt Organizations Act (“Georgia RICO”), Ga. Code An. §§ 16-14-4(a) and 16-14-6(b), and the Federal Racketeer Influenced and Corrupt Organizations Act (“Federal RICO”), 18 U.S.C. §§ 1962(c) and 1964(c). Plaintiffs seek to amend their Complaint to add these claims and to include supporting factual allegations to satisfy every element of these claims. The new claims are limited to the Georgia Dock portion of the case. Case: 1:16-cv-08637 Document #: 2053 Filed: 04/15/19 Page 2 of 9 PageID #:91933 3 6. As the U.S. Supreme Court noted in Foman, “[i]f the underlying facts or circumstances relied upon by a plaintiff may be a proper subject of relief, he ought to be afforded an opportunity to test his claim on the merits.” 371 U.S. at 182; see also Duthie v. Matria Healthcare, Inc., 254 F.R.D. 90, 94 (N.D. Ill. 2008) (“By its plain terms, the rule reflects a liberal attitude towards the amendment of pleadings—a liberality consistent with and demanded by the preference for deciding cases on the merits.”). “It is fairly common that discovery will lead to the uncovering of new causes of action, and where those causes of action are sufficiently related to the previous claims, leave to amend should be freely given . . . .” Cohn v. Taco Bell Corp., No. 92 C 5852, 1993 WL 390176, at *3 (N.D. Ill. Oct. 1, 1993); see also Stimac v. J.C. Penney Corp., Inc., No. 16 C 3581, 2018 WL 497367, at *3 (N.D. Ill. Jan. 22, 2018) (granting leave to add new claims where claims arose directly out of the events of the original complaint and plaintiff discovered necessary elements of claim during discovery). 7. Facts uncovered recently through discovery in this litigation have revealed the previously-unknown and unknowable tactics by which the Georgia Dock Defendants manipulated the Georgia Dock price index and misrepresented and/or omitted the nature of the Georgia Dock to Plaintiffs. Obtaining relevant documents and testimony from Defendants through discovery has now made it possible for Plaintiffs to plead the details of how the Georgia Dock Defendants violated Georgia and Federal RICO, including by engaging in multiple fraudulent acts and omissions, as detailed in the Amended Complaint. 8. In particular, the Amended Complaint relies heavily on information learned in the past two months of discovery regarding the Georgia Dock, including from the depositions of Rob Costner (Tyson) (deposed on April 4, 2019), Jerry Lane (Claxton) (April 4, 2019), Larry Guest (Harrison) (March 26, 2019), Ismarie Ripley (Harrison) (March 8, 2019), Dale Tolbert (Koch) Case: 1:16-cv-08637 Document #: 2053 Filed: 04/15/19 Page 3 of 9 PageID #:91934 4 (March 27, 2019), Fran Stiles (Koch) (February 6, 2019), Steve Clever (Wayne Farms) (March 21, 2019), Cheryl Thompson (Sanderson) (February 13, 2019), Gary Black (Georgia Department of Agriculture (“GDA”) (February 14, 2019), James Sutton (GDA) (February 13, 2019), and Robert Cobb (GDA) (February 12, 2019). Similarly, the Amended Complaint relies on a collective analysis of the Defendants’ price submissions to the Poultry Market News, and Harrison had failed to produce the majority of its price submissions until just over a month ago, on March 6, 2019. 9. Granting leave for Plaintiffs to file their Amended Complaint will not result in undue prejudice to Defendants. Where the proposed amendment is related to the claims contained in the initial complaint, and where the need to amend did not become apparent or was not possible until after some discovery was completed, the general rule is to allow plaintiffs to amend their complaints. See, e.g., Stimac, 2018 WL 497367, at *2 (granting leave to amend because “it is not clear . . . what extensive additional discovery is required” that might constitute undue prejudice); Cohn, 1993 WL 390176, at *3 (finding no prejudice and granting leave to amend where the proposed new claims “do not change the entire orientation of the case”); Lanigan v. LaSalle Nat. Bank, 108 F.R.D. 660, 663 (N.D. Ill. 1985) (finding no prejudice and granting leave to amend where the proposed new claim was merely an “alternative theory of recovery based on the same basic fact pattern”); see also Eades v. Thompson, 823 F.2d 1055, 1063 (7th Cir. 1987) (finding trial court abused its discretion in denying leave to amend for the first time that plaintiff sought to plead “more fully developed legal theories”). 10. Plaintiffs’ proposed new claims in their Amended Complaint are rooted in the same facts and circumstances regarding the Georgia Dock price index as in the original Complaint, meaning that limited to no additional discovery should be needed for the proposed Case: 1:16-cv-08637 Document #: 2053 Filed: 04/15/19 Page 4 of 9 PageID #:91935 5 new claims that would not otherwise occur. Much of the factual basis for the new claims has been found in documents Defendants have already produced and has already been explored in depositions taken to date. Although some witnesses regarding the Georgia Dock are yet to be deposed, those witnesses are already scheduled to be deposed or will be deposed anyways because their knowledge is equally important to the pending Georgia Dock claims arising under the Sherman Act. In the same vein, Plaintiffs already may need to depose key account representatives from Georgia Dock Defendants in the case, because Defendants have brought affirmative defenses pertaining to the relationship between and pricing agreed to by the parties. Plaintiffs do not need to re-depose any witnesses who have already been deposed in the case. 11. There is no undue delay, because the deadline set by the Court for Plaintiffs to amend their complaint is April 15, 2019. (Dkt. 1231.) See, e.g., Aebischer v. Stryker Corp., No. 05-CV-2121, 2006 WL 44307, at *3 (C.D. Ill. Jan. 9, 2006) (“In this case, the Discovery Order . . . set December 1, 2006, as the deadline for amending pleadings, so Plaintiff’s request to amend her Complaint was timely and there is no allegation of ‘undue delay.’”). Nor have Plaintiffs been dilatory or sat on their proposed new claims. To the contrary and as explained above, Plaintiffs are seeking to bring their new claims within months (and in some cases weeks) of learning important new information as part of ongoing discovery. Moreover, the close of fact discovery on October 14, 2019 (Dkt. 1230) is still six months away, and the parties are still negotiating discovery and taking depositions. Plaintiffs cannot envision how their request to amend could impact any of the deadlines set for this case. Adding Amick Farms and Case Defendants 12. In addition to their new claims, Plaintiffs have uncovered facts during discovery showing that two additional groups of companies participated in the conspiracy in violation of Case: 1:16-cv-08637 Document #: 2053 Filed: 04/15/19 Page 5 of 9 PageID #:91936 6 Section 1 of the Sherman Act and should therefore be included as Defendants. These companies are Amick Farms, LLC; Case Foods, Inc.; Case Farms, LLC; and Case Farms Processing, Inc. Plaintiffs seeks to amend their Complaint to add these companies as Defendants and to include factual allegations necessary to support their participation in the conspiracy. 13. Typically, amendments adding defendants whose roles in the acts complained of were not fully understood until evidence is further developed in discovery are allowed. See, e.g., Life Plans, Life Plans, Inc. v. Sec. Life of Denver Ins. Co., 800 F.3d 343, 358 (7th Cir. 2015) (“If discovery shows that a party should be added, and if the moving party has been diligent, there may well be sound grounds for amending the pleadings and even adding a new party.”); Bank of Am., N.A. v. Gould, No. 11 C 7658, 2012 WL 3133609, at *3-7 (N.D. Ill. July 31, 2012) (granting leave to add new defendants where facts developed during litigation supported inclusion and issues related to defendants were already before the court). 14. The companies to be added as defendants were involved in the conspiracy to restrict output and fix prices of Broilers alleged in the initial Complaint and, as detailed in the attached proposed Amended Complaint, their participation in that scheme is related to the anticompetitive acts already outlined against the existing Defendants. 15. In addition, the proposed new defendants are already named as defendants in the Direct Purchaser Plaintiffs’ (Dkt. 1566) and Commercial & Institutional Indirect Purchaser Plaintiffs’ (Dkt. 1569) pleadings, so any additional discovery related to these parties cannot be considered undue prejudice. Joining Unified Grocers, Inc. and Associated Grocers of Florida, Inc. as Plaintiffs 16. Finally, Plaintiffs’ amendment seeks to add Unified Grocers, Inc. (“Unified”) and Associated Grocers of Florida, Inc. (“AGF”) as Plaintiffs. Both Unified and AGF were direct Case: 1:16-cv-08637 Document #: 2053 Filed: 04/15/19 Page 6 of 9 PageID #:91937 7 purchasers of chicken from one or more defendants prior to their acquisition by Plaintiff SuperValu. Defendants will in no way be prejudiced by their inclusion because as part of the discovery negotiations concerning SuperValu, SuperValu has already identified and collected and produced documents from the relevant custodians for both Unified and AGF. In addition, joining Unified’s and AGF’s claims to Supervalu’s claim is efficient because Unified’s and AGF’s claims are the same as other Plaintiffs. 17. The standard for joinder is clearly satisfied here. “Persons may join in one action as plaintiffs if (A) they assert any right to relief jointly, severally, or in the alternative with respect to or arising out of the same transaction, occurrence, or series of transactions or occurrences; and (B) any question of law or fact common to all plaintiffs will arise in the action.” Fed. R. Civ. P. 20(a). Unified and AGF are asserting the same claims as all other Plaintiffs that arise out of the same series of transactions or occurrences. Further, most if not all of the questions of law and fact that are common to Plaintiffs are also common to Unified and AGF in this action. Conclusion 18. Plaintiffs respectfully submit that justice requires that Plaintiffs be granted leave to file their Amended Complaint. Plaintiffs’ Amended Complaint is not the result of undue delay, bad faith, or dilatory motive on the part of Plaintiffs; Plaintiffs have not yet sought to amend their complaint; the amendment will not unduly prejudice Defendants; and the amendment is not futile. 19. Pursuant to the Court’s Case Procedures, Plaintiffs requested that Defendants consent to their Motion. Defendants were unable to take an advance position. Case: 1:16-cv-08637 Document #: 2053 Filed: 04/15/19 Page 7 of 9 PageID #:91938 8 WHEREFORE, Plaintiffs respectfully request that the Court enter an Order granting this motion and giving Plaintiffs leave to file instanter their proposed Amended Complaint, nunc pro tunc to April 15, 2019. Dated: April 15, 2019 Respectfully submitted, By: /s/ David P. Germaine David P. Germaine Paul E. Slater Joseph M. Vanek David P. Germaine John P. Bjork SPERLING & SLATER, P.C. 55 West Monroe Street, Suite 3200 Chicago, Illinois 60603 Tel: (312) 641-3200 Fax: (312) 641-6492 PES@Sperling-law.com JVanek@Sperling-law.com DGermaine@Sperling-law.com JBjork@Sperling-law.com Phillip F. Cramer Ryan T. Holt SHERRARD ROE VOIGT & HARBISON, PLC 150 3rd Avenue South, Suite 1100 Nashville, Tennessee 37201 Phone: (615) 742-4200 pcramer@srvhlaw.com rholt@srvhlaw.com Counsel for Associated Grocers of the South, Inc., Meijer, Inc., Meijer Distribution, Inc., OSI Restaurant Partners, LLC, Publix Super Markets, Inc., Supervalu Inc.; Unified Grocers, Inc.; Associated Grocers of Florida, Inc.; and Wakefern Food Corp. Case: 1:16-cv-08637 Document #: 2053 Filed: 04/15/19 Page 8 of 9 PageID #:91939 9 CERTIFICATE OF SERVICE I certify that on April 15, 2019, I filed the foregoing document with the Clerk of the Court for the United States District Court, Northern District of Illinois, by using the Court’s CM/ECF system, and also served counsel of record via this Court’s CM/ECF system. SPERLING & SLATER, P.C. By: /s/ David P. Germaine David P. Germaine Case: 1:16-cv-08637 Document #: 2053 Filed: 04/15/19 Page 9 of 9 PageID #:91940