Sherman Act

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7^th Circuit Court of Appeals

Case Name: Amory Investments LLC v. Utrecht-America Holdings, Inc.

Case No.: 22-1858

Officials: Easterbrook, St. Eve, and Kirsch, Circuit Judges

Focus: Sherman Act

Multiple lawsuits were filed alleging that various companies within the broiler-chicken industry formed a cartel. During the ongoing litigation, third-party discovery uncovered evidence suggesting that Rabobank, a lender to several broiler-chicken producers, encouraged at least two of them to reduce their production levels. As a result, some plaintiffs included Rabobank as an additional defendant.

However, the Seventh Circuit upheld the dismissal of these claims. The reason being that the Sherman Act, 15 U.S.C. 1, prohibits combinations and conspiracies that restrain trade, but it does not cover unilateral actions. In this case, the plaintiffs only claimed that Rabobank acted unilaterally to protect its own interests. The complaint failed to allege that Rabobank acted as a conduit for the producers’ agreement, assisted in coordinating their production, identified cheaters, or even knew about any coordination among the producers. The communication records within Rabobank, which included emails among managers and other employees, merely observed that lower output and higher prices in the broiler-chicken market would benefit the bank’s chances of loan collection. Additionally, a couple of emails from the head of Rabobank’s poultry-lending section to executives at two producers indicated nothing more than unilateral action.

The emails within Rabobank did not promote or facilitate cooperation among the producers, and the two messages only reminded the producers about the basic economic principle that lower output typically results in higher prices, given the downward-sloping demand curves. The court emphasized that offering advice is distinct from participating in an agreement or conspiracy.

Affirmed.

Decided 07/21/23

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