Boston Market Corporation v Mountainaire Farms, Inc., No. 24-1030 (7th Cir. 2025)

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In this case, plaintiffs in a class action alleged that several corporations in the broiler chicken market violated antitrust laws by engaging in bid rigging and reducing the supply of broiler chickens. The plaintiffs claimed that these actions led to anomalous dips in sales, which they attributed to collusion on price and output. The class action was divided into two tracks: Track 1, which omitted bid-rigging allegations for faster discovery and trial, and Track 2, which included bid-rigging theories and state law claims by indirect purchasers.

The United States District Court for the Northern District of Illinois allowed the class to place claims against Simmons Foods, Inc. and Simmons Prepared Foods, Inc. on Track 1. Simmons settled for $8 million, but several class members, including the Boston Market group, objected to the settlement. They argued that the settlement was inadequate and that they should not be included in the class because they had filed their own antitrust suits. However, they missed the deadline to opt out of the class, and the district court approved the settlement.

The United States Court of Appeals for the Seventh Circuit reviewed the case. The court held that the settlement's release language was broad enough to cover bid-rigging claims and that the $8 million settlement was reasonable. The court noted that the Boston Market group did not provide evidence that the settlement amount was unreasonably low. Additionally, the court observed that the class had lost a related trial and that criminal antitrust prosecutions against some firms had ended in mistrials or acquittals, indicating uncertainty about the plaintiffs' prospects. The court affirmed the district court's approval of the settlement.

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In the United States Court of Appeals For the Seventh Circuit ____________________ No. 24-1030 IN THE MATTER OF: BROILER CHICKEN ANTITRUST LITIGATION BOSTON MARKET CORPORATION, et al., Class Members-Appellants. ____________________ Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 16 C 8637 — Thomas M. Durkin, Judge. ____________________ ARGUED SEPTEMBER 17, 2024 — DECIDED APRIL 1, 2025 ____________________ Before EASTERBROOK, HAMILTON, and MALDONADO, Circuit Judges. EASTERBROOK, Circuit Judge. In this long-running and complex class action, plainti s contend that many corporations trading in the market for broiler chickens violated the antitrust laws. The class asserts that they did this in two principal ways: by agreeing on the prices to be quoted (“bid rigging”) and by reducing the supply of broilers available for sale. (A third way, which the parties call the “Georgia Dock” allegations, need not be discussed.) 2 No. 24-1030 In the economics of antitrust, bid rigging and supply reduction amount to the same thing. If producers form a cartel that sets higher prices, then sales will fall because demand is lower at the higher price. If instead the cartel cuts supply, then buyers bid up the price of the remaining goods. Whether the cartel controls the price directly or the output directly, or does a little of each, the pro t-maximizing position for the cartel is the same volume of sales at the same price. See, e.g., FTC v. Superior Court Trial Lawyers Association, 493 U.S. 411, 423 (1990); General Leaseways, Inc. v. National Truck Leasing Association, 744 F.2d 588, 594–95 (7th Cir. 1984); Richard A. Posner, Economic Analysis of Law ch. 7 (1972). In the law of antitrust, these two methods have di erent names, but both methods of operating a cartel violate §1 of the Sherman Act, 15 U.S.C. §1. As the district court observed when denying defendants’ motion for summary judgment, the suit boils down to a contention that two anomalous dips in the sales of broiler chickens must have been caused by collusion with respect to price, output, or both. 702 F. Supp. 3d 635, 648 (N.D. Ill. 2023). Because the class action entails so many di erent entities, the district court sought to simplify matters by allowing the class (e ectively, the lawyers representing the class) to put di erent theories and di erent defendants on “Track 1” or “Track 2.” The di erent tracks have di erent timelines for summary judgment. Claims on Track 1 omit bid-rigging allegations in exchange for faster discovery and trial. Track 2 includes not only bid-rigging theories but also some claims under state law by indirect purchasers, which was among the factors complicating discovery. On December 21, 2021, the class put claims against defendants Simmons Foods, Inc., and No. 24-1030 3 Simmons Prepared Foods, Inc. (collectively “Simmons”) on Track 1. Once assigned to Track 1, Simmons settled its part of the suit for $8 million. Several members of the class (the “Boston Market group”) objected to this settlement, which required judicial approval under Fed. R. Civ. P. 23(e). The Boston Market group is disaffected not so much by the size of the settlement as by the fact that its members are in the class at all. They led their own antitrust suits, which remain pending. They were entitled to opt out of the class and pursue their own claims, Fed. R. Civ. P. 23(c)(2)(B)(v), which would have been una ected by the settlement with Simmons. About 130 restaurants or restaurant chains, including McDonald’s, did opt out. But members of the Boston Market group missed the deadline for excluding themselves from the class. They are therefore stuck with the settlement, now that the district judge has approved it, unless we overturn the district court’s conclusion that the settlement is a reasonable compromise. If the settlement stands, the separate suits by members of the Boston Market group cannot proceed. The court entered a partial nal judgment under Fed. R. Civ. P. 54(b), allowing the Boston Market group to appeal. They o er two principal arguments: rst, that the settlement cannot cover bid-rigging theories, which the class abandoned by putting the claim against Simmons on Track 1; second, that $8 million is just too little to re ect the value of the released claims. Both of these themes lack punch. First, the release in the settlement is as broad as can be. It resolves “all claims that have been asserted, or could have been asserted, in the Action against [Simmons], including all claims in any way arising out of or relating to the direct 4 No. 24-1030 purchase of Broilers produced, processed, or sold by Simmons or any of the other Defendants or their alleged coconspirators.” Bid rigging is covered by this language. In other words, the settlement is an ordinary one. Defendants settle to buy peace. As the Boston Market group sees things, however, all the Simmons defendants bought was a stful of additional lawsuits—all the separate suits that the Boston Market group had on le. Nothing in either the language of the release or the goal of settlement supports this position. Many decisions hold that it is proper to release claims that were brought and then abandoned earlier in a suit—or never brought at all. E.g., Tropp v. Western-Southern Life Insurance Co., 381 F.3d 591, 595–96 (7th Cir. 2004); Oswald v. McGarr, 620 F.2d 1190, 1198 (7th Cir. 1980); TBK Partners, Ltd. v. Western Union Corp., 675 F.2d 456, 460 (2d Cir. 1982). Second, the Boston Market group has not supplied any evidence that $8 million is an unreasonably low value for the released claims (including bid rigging). The Boston Market group could have hired an expert to assess the likely recovery against Simmons if the class prevailed in full, and discount that by the risk that the class would lose. If that number came in substantially higher than $8 million, that would fuel an argument against the district court’s approval of the settlement. But the Boston Market group did not do this. There is some evidence of this kind bearing on other settlements, but none bearing on the settlement with Simmons. Nor is there any evidence addressing the marginal value of a bid-rigging theory, compared with a supply-reduction theory alone. The record thus does not undermine the district court’s conclusion that $8 million is a reasonable settlement. No. 24-1030 5 The judge observed that one of the Track 1 cases went to trial shortly after Simmons settled, and the class lost that case outright. Victory against Simmons therefore could not have been assured. On a related front, the United States brought two criminal antitrust prosecutions, one against many of the rms’ executives (United States v. Penn, No. 20-CR-00152-PAB (D. Colo.)) and another against two of the rms (United States v. Norman W. Fries, Inc., No. 21-CR-00168-RM (D. Colo.)). The latter was dismissed in 2022 without a trial. The former went to trial three times. The rst two ended in mistrial. The third, with the list of defendants cut down to ve, ended in acquittal. It is of course possible that there was a cartel but that the criminal prosecutions were foiled by the steep burden of proof beyond a reasonable doubt. Still, there is uncertainty about the civil plainti s’ prospects. It may well be that obtaining $8 million from Simmons is a coup for the class. We have not seen anything that would paint the district court’s reasonableness nding as a clear error or abuse of discretion. The Boston Market appellants trot out some other theories, such as a contention that the named class representatives do not have the interests of restaurant plainti s at heart and that the Rule 23(b)(3) notice was inadequate to alert appellants to all legal consequences of the Track 1 election. The Boston Market group submits that, by ling stand-alone suits, they constructively opted out of the class, which is absurd. Everyone is entitled to know with certainty who is in and who is out; the opt-out procedure does this with due formality. The district court did the Boston Market Group a big favor by treating their belated protest about membership in the class as an opt-out going forward, while not a ecting settlements and other decisions already reached. They are not entitled to 6 No. 24-1030 retrospective relief too. We have considered other contentions but need not discuss them further. AFFIRMED

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