In re Broiler Chicken Antitrust Litigation

Docket number: 1:16-cv-8637 (N.D. Ill.)
Appellate case number: 22-2889 (7th Cir.)

John Andren, an attorney with the Center for Class Action Fairness (CCAF), filed an objection to the attorneys’ fee request in the end-user consumer settlement of In re: Broiler Chicken Antitrust Litigation.

The settling attorneys argue they should be paid 38% of the $181 million settlement fund as fees and costs, which is nearly triple the percentage typically awarded in a settlement of this size. The fee request is also more than twice what one of the lead firms has bid as a percentage fee award in two other antitrust cases. Andren argues that the excessive award should be reduced based on these benchmarks, which would add about $30 million to class recovery.

The underlying Broiler Chicken litigation alleges that chicken producers colluded for ten years to fix the prices of broiler chickens, raising prices to consumers. Broiler chickens are those born and bred for meat production on an industrial scale. Numerous antitrust suits across the country were consolidated in the Northern District of Illinois before Judge Thomas M. Durkin, who appointed leadership committees for three types of plaintiffs: direct purchasers (mostly large companies who buy from chicken producers directly), commercial and institutional indirect purchaser (who buy from middlemen and sell to consumers, like independent stores and restaurants), and end-user consumers. Objector John Andren, like most meat-buying Americans, falls into the last group.

Settlements totaling $181 million were reached with several defendants, including two of the largest stakeholders of the alleged cartel, Tyson and Pilgrim’s Pride. However, plaintiffs’ fee request seeks fully one third of the fund with costs of the litigation added on top. This alone violates Seventh Circuit law, which requires that attorneys’ fees only be awarded from the net common fund after fees are deducted.

The 33% fee requested is also too high for a fund of this size. Empirical research of large settlements shows that the typical percentage attorneys’ fee in a settlement over $100 million is 15-18%. Additionally, Seventh Circuit law requires setting fees based on the market rate that a savvy plaintiff would negotiate ex ante (before the beginning of litigation). Such a fee would certainly be less than 33% because Hagens Berman, one of the two lead firms in the case, has submitted bids in other antitrust cases that employ a sliding scale fee award. That is, the firm agreed to accept smaller percentage awards for larger funds, which makes sense because a $300 million settlement is not thirty times more difficult to win than a $10 million settlement. These past bids would work out to perhaps a $26 million fee award in this size of settlement, less than half what was requested. An award of this size would put an additional $30 million into class members’ pockets.

A fairness hearing on the settlement and Andren’s objection occurred on December 20, 2021. The district court did not permit Andren’s discovery requests, but on August 30, 2022 ordered plaintiffs’ counsel to provide its fee requests and awards in other cases.

On October 7, 2022, the district court substantially granted plaintiffs’ fee award for over 33%, but did deduct $2.3 million so that the ward would be net costs, as the Seventh Circuit requires and objectors argued. Andren appealed to the Seventh Circuit.

On August 30, 2023, the Seventh Circuit issued an opinion agreeing with Andren and vacating the fee award. The panel found that the district court inappropriately discounted past bids to be appointed lead counsel and fee awards from the Ninth Circuit, both of which were probative on what a fee award based on a hypothetical ex ante bargain would be. The court remanded the case for further consideration of this evidence and of Andren’s discovery request.

On remand, Andren moved to strike expert reports the district court had relied on. Class counsel renewed their motion for fees, and Andren opposed that motion. On March 26, 2024, the district court conducted a hearing regarding a previously-undisclosed fee agreement with one of class counsel’s other clients, which would significantly cap fees in this case, and requested supplemental briefing on this issue, which Andren filed on April 23.

The district court awarded $51.66 million to class counsel, equal to 30% of the net settlement fund, despite an ex ante fee agreement entered by co-class counsel demonstrating a far lower rate would be paid in the market.

On October 30, 2024, Andren appealed the fee order to the Seventh Circuit. He argued that the district court had erred again by giving the actual market evidence comparatively little weight and giving undue weight to ex post fee awards, many cherry-picked as examples of awards of 33%, and by failing to consider the stage at which the case settled and the bids that class counsel had submitted in other cases.

Amicus filing in Direct Purchaser Track

On June 20, 2024, CCAF filed a proposed amicus brief concerning similar issues raised by Direct Purchaser Plaintiffs’ second interim fee application, which the district court accepted.

Case Documents