On July 7, five poultry industry executives were acquitted in Colorado federal court after being accused of rigging prices for broiler chickens. The massive antitrust case is an example of a growing trend in Colorado and across the country, according to local attorneys.
In 2020, the U.S. Department of Justice charged 10 poultry executives with violating the Sherman Act and working together to fix the price of chicken sold to national grocery stores and restaurant chains. Most of the evidence presented was texts and emails acquired by the DOJ and testimony from industry insiders.
The case ended in two mistrials before the DOJ dropped charges against half of the executives. The remaining five — Jayson Penn, Mikell Fries, Scott Brady, William Lovette and Roger Austin — were found not guilty earlier this year.
Representing Fries were Rick Kornfeld, David Beller and Kelly Page, shareholders at Colorado defense firm Recht Kornfeld. According to the trio, this case shows the DOJ’s priorities include antitrust cases.
Kornfeld has been in private practice in Denver since 1994 after a four-year term at the U.S. Attorney’s Office for the Northern District of Illinois. He works on white-collar defenses in both federal and state courts. Beller and Page both have backgrounds as Colorado public defenders and have been with Recht Kornfeld since 2007 and 2017, respectively.
The firm began representing Fries after he was first indicted and defended him across all three trials. Fries is the president of Georgia-based chicken producer Claxton Poultry Farms.
While Kornfeld, Beller and Page are happy with the not guilty verdict for their client, they say the massive antitrust trial is concerning for businesses and shows the current DOJ is laser-focused on prosecuting antitrust cases, even when evidence isn’t solidly stacked in their favor.
“The Department of Justice under the Biden administration and under Merrick Garland is prioritizing antitrust stuff,” said Kornfeld. He noted that while the charges against his client were filed during the Trump administration, in the face of a recession and growing inflation rates, the current DOJ has been committed to antitrust prosecutions.
The Denver chicken fixing case lasted nine months with the first two juries hung. Before the DOJ brought its third and ultimately unsuccessful trial, the district of Colorado’s Chief Judge Philip Brimmer ordered the antitrust division’s assistant attorney general Jonathan Kanter to meet with him and explain why the case should be brought a third time. According to Kornfeld, Kanter emphasized the case was a kitchen table issue; something that impacted Americans in every walk of life and across the country in the face of inflation and a declining economy.
“So I think that is the political reality that we were up against. And decisions were made, I think, clearly by the deputy attorney general and others to move forward with this case,” added Kornfeld.
Recht Kornfeld was the only Colorado-based team on the defense side and the attorneys say that a large antitrust case filed in this district is very unusual.
“Our law firm is particularly unique in that we were the ones who knew the jurisdiction, we knew the jurors, we knew the courtroom, we knew the judges,” said Beller. “And, you know, a federal antitrust case tried in Colorado, prior to the defeat in the chicken trials, was pretty unheard of.” Kornfeld, Beller and Kelly are all Colorado natives, they said, which gave their team an edge in understanding the playing field.
In April, another Denver jury found medical company DaVita Inc. and its former CEO Kent Thiry not guilty in a separate high-stakes antitrust trial. The DOJ alleged the company’s anti-poaching policy violated the Sherman Act and a guilty verdict would’ve meant hundreds of millions of dollars in fines plus potential jail time for Thiry. The antitrust division was handed another recent loss in Texas after a jury wasn’t convinced a staffing company worked to suppress wages for physical therapists and assistants.
The Recht Kornfeld team speculates the DOJ’s antitrust division may be filing charges in Colorado district court in hopes of an empathic jury pool with Coloradans holding more liberal and anti-corporation views. “Forum shopping,” Kelly called it. “If that was their only goal to be in Colorado was finding these jurors that they think would buy into their theory, certainly that didn’t pan out.”
While a few more antitrust cases are set for trial in Colorado based on the same evidence presented in the poultry trial, Kelly says the DaVita case and her client’s most recent victory show Colorado juries won’t return guilty verdicts without solid evidence. “All of this is guessing, but we’ll see in the future if we have any more antitrust cases here in Denver,” said Kelly.
Antitrust prosecutions are on the rise and there’s no sign of slowing.
The Biden administration requested a more than $80 million increase for the DOJ’s antitrust division for fiscal year 2023 and in May, Kanter emphasized the division’s growth at the first annual Spring Enforcers Summit for antitrust prosecutors and investigations. For the first time, the division has two heads for litigation, Kanter explained, and said they plan to use all tools in their toolkit to bring antitrust cases.
The poultry executive trial, Kornfeld, Beller and Page said, is an example of an aggressive antitrust DOJ. Whether or not Colorado will keep hosting these cases, the DOJ is prepared to bring litigation and attorneys, businesses and individuals should take note.
“I think, for many years, people have thought of antitrust as something that is unique to really large, major corporations. But the reality is, it actually applies across all industries in all size companies,” said Beller. While the companies in the most recent trial weren’t small by any means, he explained, they make up only a small slice of the U.S. broiler chicken market.
“The Department of Justice isn’t slowing down anytime soon, even in the face of not guilty verdicts here, as well as not guilty verdicts across the country,” said Page. “And so attorneys, corporations, really anybody who has potential antitrust exposure needs to be very aware of what’s happening in the litigation space. They need to be considering bringing in outside counsel to advise them about the current policies they have in place.”
Put simply, “antitrust is not going away anytime soon,” Kornfeld said.