Maplevale Farms, Inc. v. Koch Foods, Inc. et alMOTIONN.D. Ill.April 15, 2019UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS IN RE BROILER CHICKEN ANTITRUST LITIGATION This Document Relates To: Associated Wholesale Grocers, Inc. v. Koch Foods, Inc., et al. Main Case No. 1:16-cv-08637 Related Case No. 1:18-cv-06316 ASSOCIATED WHOLESALE GROCERS, INC.’S MOTION FOR LEAVE TO FILE FIRST AMENDED COMPLAINT Plaintiff Associated Wholesale Grocers, Inc. (“AWG”), through its undersigned counsel, moves the Court for entry of an order pursuant to Fed. R. Civ. P. 15(a)(2) to permit AWG to file its First Amended Complaint, attached as Exhibit A.1 AWG’s proposed amendment adds Case Foods and Amick as defendants, brings claims against Defendants that were assigned to AWG by Affiliated Foods Midwest Cooperative, Inc. (“AFM”), clarifies that certain Mar-Jac entities are named defendants, and adds allegations about Defendants’ sharing of confidential information that Plaintiff uncovered during discovery.2 1 Exhibit A is a public, redacted version of the First Amended Complaint. It contains information from depositions and documents produced by Defendants in this litigation. That information has been redacted as it has been designated as Confidential or Highly Confidential by Defendants. A redline version of the First Amended Complaint is attached as Exhibit B, and it also contains the confidentiality redactions. Pursuant to Local Rule 26.2(c) AWG has also provisionally filed its Exhibits C and D, which do not contain redactions, under seal. Exhibit C is an un-redacted version of the First Amended Complaint. Exhibit D is a redline of the un-redacted version of the First Amended Complaint showing changes from AWG’s original Complaint. Both exhibits are filed separately immediately after this filing. AWG has also filed simultaneously herewith a Motion for Leave to File Under Seal and has noticed both motions for presentment together. 2 The First Amended Complaint also makes certain corrections to the complaint and adds allegations about joint ventures in which Defendants participated. It also revises the venue allegations to account for the transfer to this Court from the District of Kansas. AWG reserves any and all rights to seek to have its case transferred back to the District of Kansas. Case: 1:16-cv-08637 Document #: 2055 Filed: 04/15/19 Page 1 of 9 PageID #:92369 2 AWG’s proposed amendment is timely, will not delay the proceedings before the Court or unduly prejudice any party, and is brought in good faith. The Court should grant AWG leave to file its First Amended Complaint. PROPOSED AMENDMENT AWG seeks leave to make the following amendments to its Complaint: First, AWG requests leave to amend its Complaint to allege antitrust claims against all Defendants arising from AFM’s purchases of broilers during the Relevant Time Period. Those claims have been assigned by AFM to AWG. Second, AWG’s First Amended Complaint adds the following as defendants: Case Foods, Inc., Case Farms, LLC, and Case Farms Processing, Inc. (collectively “Case Foods”), and Amick Farms, LLC (“Amick”). AWG named Case Foods and Amick in its Complaint as co- conspirators. During discovery, AWG became aware that Case Foods and Amick were key participants in the alleged antitrust conspiracy. Additional allegations about the involvement by Case Foods and Amick in the alleged conspiracy can be found at paragraphs 152, 154-155, 192, 199, 206, 209, 222, 224, 228, 231, 255, 260, 305, 374 of the First Amended Complaint (most of these allegations are redacted pursuant to the Agreed Confidentiality Order).3 Case Foods and Amick have been defendants in other cases in the consolidated litigation since January 2019. In addition, the First Amended Complaint adds allegations about Defendants’ sharing of In addition, Plaintiff submitted the proposed amendment to Defendants but has not heard back as to whether Defendants object to the amendment. 3 AWG has concurrently filed a Motion for Leave to File Under Seal unredacted versions, with and without redlines, of the First Amended Complaint. Case: 1:16-cv-08637 Document #: 2055 Filed: 04/15/19 Page 2 of 9 PageID #:92370 3 confidential information that Plaintiff uncovered during discovery. Those allegations may be found at Paragraphs 7.f, 390-392, and 406 of the First Amended Complaint.4 Third, AWG requests leave to amend to make corrections to the caption of its Complaint and to clarify some of its allegations against Mar-Jac Poultry. See Exhibit B, at 1. Specifically, the First Amended Complaint corrects the names of Defendants Koch Meat Co. Inc., and JCG Foods of Alabama, LLC, and includes Simmons Prepared Foods, Inc. in the caption. All three of these companies were correctly named in the body of AWG’s Complaint as defendants, and all three have answered AWG’s Complaint. See Dkt. No. 1810 (Defendants Simmons Foods, Inc. and Simmons Prepared Foods, Inc.’s Answer to AWG’s Complaint); Dkt. No. 1901 (The Koch Defendants’ Answer and Defenses to AWG’s Complaint). The First Amended Complaint also clarifies that Mar-Jac Poultry, AL, LLC; Mar-Jac AL/MS, Inc.; Mar-Jac Poultry, LLC; Mar-Jac Holdings, LLC; and Mar-Jac Poultry MS, LLC, which were named as defendants in the caption but referred to as co-conspirators in one paragraph of the Complaint, are named defendants, and includes allegations specific to the Mar-Jac Mississippi and Alabama entities that were uncovered during discovery. See Exhibit B ¶¶ 81 & 386. The First Amended Complaint also makes grammatical corrections and deletes two “co-conspirator” references as to Agri Stats, as Agri Stats is a named defendant in the case and has answered AWG’s Complaint. ARGUMENT The federal rules authorize liberal amendments of pleadings. Federal Rule of Civil Procedure 15(a)(2) provides that after a responsive pleading is filed, “[t]he court should freely give leave when justice so requires.” See also Foman v. Davis, 371 U.S. 178, 182 (1962) (“Rule 15(a) declares that leave to amend ‘shall be freely given when justice so requires’; this mandate 4 This Motion refers to these specific allegations by paragraph number, as they contain information that has been redacted pursuant to the Agreed Confidentiality Order. Case: 1:16-cv-08637 Document #: 2055 Filed: 04/15/19 Page 3 of 9 PageID #:92371 4 is to be heeded.”). The Seventh Circuit recognizes that “the liberal amendment standard of Fed. R. Civ. P. 15 establishes a ‘presumption in favor of giving plaintiffs at least one opportunity to amend . . . .’” Loja v. Main Street Acquisition Corporation, 906 F.3d 680, 685 (7th Cir. 2018) (quoting Runnion ex. rel. Runnion v. Girl Scouts of Greater Chicago & Nw. Indiana, 786 F.3d 510, 518 (7th Cir. 2015)). When determining whether to grant leave to amend, courts consider whether there was “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, [or] futility of amendment.” Airborne Beepers & Video, Inc. v. AT&T Mobility LLC, 499 F.3d 663, 666 (7th Cir. 2007) (quoting Foman, 371 U.S. at 182). The Court should grant leave to amend here for the following reasons: The proposed amendment is timely. AWG was consolidated with In re Broiler Chicken Antitrust Litigation, Case No. 1:16-cv-08637, on October 3, 2018 (Dkt. No. 1267). Under the Court’s Scheduling Order No. 8 (Dkt. No. 1461), the deadline for AWG to amend its Complaint is April 15, 2019. AWG brings its Motion for Leave to Amend its Complaint before that deadline expires. No party, or the proposed additional defendants Case Foods or Amick, will be unduly prejudiced by the amendment. AWG’s motion to amend requests permission to add Case Foods and Amick as Defendants, which have known from the outset of the case and this consolidated litigation that they are implicated in the lawsuit. They were named as co-conspirators in AWG’s initial complaints and in numerous complaints filed by other parties. They are also named defendants in other cases in this consolidated litigation. See, e.g., Direct Purchaser Plaintiffs’ Case: 1:16-cv-08637 Document #: 2055 Filed: 04/15/19 Page 4 of 9 PageID #:92372 5 Fourth Amended and Consolidated Class Action Complaint, Case No. 1:16-cv-08637 (Doc. # 1565) (naming Case Foods and Amick as defendants). The new defendants will have ample time to conduct discovery as to AWG. Discovery regarding AWG is at an early stage, and the parties have not yet reached an agreement on AWG’s custodians. No AWG employee or former employee has been deposed. Thus, the addition of these parties, as well as the addition of the claims based on AFM’s assignment of its antitrust claims to AWG, will not result in duplicative discovery efforts. Further, Defendants, and Case Foods and Amick, have six months to conduct discovery as to AWG. Defendants, Case Foods, and Amick are therefore not prejudiced by AWG’s First Amended Complaint. See Lyons v. Cook County, 2015 WL 6673901, *3 (N.D. Ill. Oct. 30, 2015) (finding that defendants were not unduly prejudiced because, inter alia, discovery was still open). The additional allegations about Defendants’ sharing of confidential information found at Paragraphs 7.f., 390-392, and 406 of the First Amended Complaint do not prejudice any Defendant. Defendants, being the owners of and participants in the joint ventures discussed in those paragraphs, have access to information about those entities. In any event, Defendants also have six additional months to conduct discovery as to those allegations. The clarifications to the caption and the Complaint do not prejudice any party. Koch Meat Co., Inc., JCG Foods of Alabama, LLC, and Simmons Prepared Foods, Inc. were all correctly named as defendants in the body of AWG’s Complaint, and all three have filed answers to AWG’s Complaint. Similarly, the deletion of the “co-conspirator” references as to Agri Stats does not prejudice any party. Agri Stats is a named defendant in the case and has answered AWG’s Complaint. Similarly, the Mar-Jac entities will not be prejudiced because they are Case: 1:16-cv-08637 Document #: 2055 Filed: 04/15/19 Page 5 of 9 PageID #:92373 6 named defendants in the Direct Purchaser Plaintiffs’ class case already and, in any event, also have six months to conduct discovery.5 The proposed amendment will not cause undue delay. Undue delay, without more, is insufficient to support denial of leave to amend. Soltys v. Costello, 520 F.3d 737, 742 (7th Cir. 2008). Undue delay is most likely to occur “when a combination of factors—delay in proceedings without explanation, no change in the facts since filing of the original complaint, and new theories that require additional discovery—occur together.” McDaniel v. Loyola University Medical Center, 317 F.R.D. 72 (N.D. Ill. 2016) (internal quotation omitted). There is no undue delay here. AFM recently assigned its claims to AWG. In addition, AWG discovered the extent of Case Foods’ and Amick’s involvement in the conspiracy upon review of documents produced during discovery and of deposition testimony about Case Foods and Amick. AWG also recently uncovered during discovery the information added to Paragraphs 7.f., 390-392, and 406 of the First Amended Complaint and the information contained in Paragraph 386 as to the Mar-Jac entities. Further, the deadline to complete discovery of October 14, 2019 set by the Court under Scheduling Order No. 6 will not be impacted by the amendment. (Dkt. No. 1230). Indeed, depositions of Case Foods and Amick employees are just beginning. Depositions of Case Foods and Amick employees will not occur before April 15, 2019, pursuant to the Court’s orders dated February 12 & 14, 2019 (Dkt. Nos. 1648 & 1652). 5 After receiving AWG’s Complaint, Mar-Jac’s counsel represented to AWG’s counsel that Mar-Jac Poultry, Inc. was the only Mar-Jac entity that made reports to the Georgia Dock and that Mar-Jac Poultry, Inc. was the only proper defendant in the case. Testimony from the Fed. R. Civ. P. 30(b)(6) designee for Mar-Jac Poultry, Inc. suggests otherwise. During that deposition, it became clear that the Alabama and Mississippi Mar-Jac entities also shared confidential information with other Defendants. AWG alleges that sharing of confidential information, like the conduct in which the Alabama and Mississippi Mar-Jac entities engaged, contributed to Defendants’ Broiler anticompetitive supply cuts. As a result, AWG seeks leave to clarify in its First Amended Complaint that all Mar-Jac entities named in the caption of its Complaint are named Defendants in the case. Allegations based on the 30(b)(6) witness’s testimony are made in Paragraph 386 of AWG’s First Amended Complaint. Case: 1:16-cv-08637 Document #: 2055 Filed: 04/15/19 Page 6 of 9 PageID #:92374 7 The proposed amendments will not be futile. “[A] proposed amendment is futile only if it could not withstand a Rule 12(b)(6) motion to dismiss.” Peoples v. Sebring Capital Corp., 209 F.R.D. 428, 430 (N.D. Ill. 2002) (internal quotation omitted). Here, AWG alleges that Defendants participated in a conspiracy to cut production, share competitively-sensitive information, and otherwise engaged in anticompetitive conduct between 2008 and 2016. The substance of these allegations have already withstood a Rule 12(b)(6) motion brought by the current Defendants in the consolidated litigation. See Memorandum Opinion and Order, In re Broiler Chicken Antitrust Litigation, ECF No. 541 at 7 (summarizing evidence presented in another consolidated case that withstood Defendants’ motion to dismiss). AWG’s amendments are not futile. The proposed amendment is brought in good faith and with no dilatory motive. This is AWG’s first amendment to its Complaint. It is not intended to delay the action and will not delay the Court’s schedule. Instead, the present motion is brought in good faith to preserve AWG’s claims against Case Foods and Amick, to assert claims based on the assignment of claims from AFM, to clarify that certain Mar-Jac entities are Defendants, to add certain allegations recently uncovered during discovery, and to correct certain minor errors in AWG’s Complaint. Case: 1:16-cv-08637 Document #: 2055 Filed: 04/15/19 Page 7 of 9 PageID #:92375 8 III. CONCLUSION This Court should grant AWG’s motion for leave to amend its pleading. There is no undue delay, bad faith, dilatory motive, or undue prejudice to defendants. Plaintiff has not previously amended its pleading, and this amendment will not interrupt the schedule established by the Court. Dated: April 15, 2019 Respectfully submitted, /s/ Amy D. Fitts AMY D. FITTS IL Bar No. 6294248 DANIEL D. OWEN (pro hac vice) G. GABRIEL ZOROGASTUA (pro hac vice) POLSINELLI PC 900 W. 48th Place, Suite 900 Kansas City, MO 64112 Phone: (816) 751-1000 Fax: (816) 751-1536 afitts@polsinelli.com dowen@polsinelli.com gzorgastua@polsinelli.com RODNEY L. LEWIS IL Bar No. 6288353 POLSINELLI PC 150 N. Riverside Plaza, Suite 3000 Chicago, IL 60606 Phone: (312) 819-1900 Fax: (312) 819-1910 rodneylewis@polsinelli.com ATTORNEYS FOR PLAINTIFF ASSOCIATED WHOLESALE GROCERS, INC. Case: 1:16-cv-08637 Document #: 2055 Filed: 04/15/19 Page 8 of 9 PageID #:92376 9 CERTIFICATE OF SERVICE I hereby certify that on the 15th day of April, 2019, a true and correct copy of the foregoing was electronically filed and served on counsel for all parties properly registered to receive notice via the Court’s CM/ECF system. I also served Liaison Counsel for the Defendants with an unredacted version of the documents that are attached as Exhibits C and D, by electronic delivery. /s/ Amy D. Fitts Amy D. Fitts Case: 1:16-cv-08637 Document #: 2055 Filed: 04/15/19 Page 9 of 9 PageID #:92377