In re Broiler Chicken Antitrust Litigation

MEMORANDUM by Agri Stats, Inc. in support of motion for protective order 894

Northern District of Illinois, ilnd-1:2016-cv-08637

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Case: 1:16-cv-08637 Document #: 895 Filed: 05/18/18 Page 1 of 21 PageID #:25243 UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS Case No. 16-cv-08637 IN RE BROILER CHICKEN ANTITRUST LITIGATION Hon. Thomas M. Durkin Hon. Jeffrey T. Gilbert This document relates to: All Actions MEMORANDUM IN SUPPORT OF DEFENDANT AGRI STATS, INC.'S MOTION FOR PROTECTIVE ORDER Case: 1:16-cv-08637 Document #: 895 Filed: 05/18/18 Page 2 of 21 PageID #:25244 TABLE OF CONTENTS I. INTRODUCTION .............................................................................................................. 1 II. STATEMENT OF FACTS ................................................................................................. 1 III. LEGAL STANDARD......................................................................................................... 3 IV. ARGUMENT...................................................................................................................... 4 A. The Department of Justice Antitrust Division Investigation Substantially Overlaps with Plaintiffs' Requests for Production to Agri Stats. ........................... 4 1. DOJ's Broad and Comprehensive Request to Agri Stats Addressed Claims at Issue in the Current Litigation. ................................................... 5 2. The Productions to DOJ Confirm that the Searches Agri Stats Performed Were Effective in Locating the Documents Plaintiffs Seek............................................................................................................. 8 3. The White Paper Produced to DOJ Confirms the Breadth and Scope of the Investigation......................................................................... 10 B. Agri Stats Should Not Be Required To Conduct Burdensome, Duplicative Custodial Searches. ............................................................................................... 14 V. CONCLUSION................................................................................................................. 15 i Case: 1:16-cv-08637 Document #: 895 Filed: 05/18/18 Page 3 of 21 PageID #:25245 TABLE OF AUTHORITIES Page(s) Cases Agerbrink v. Model Service LLC, 2017 WL 933095 (S.D.N.Y. Mar. 8, 2017) ...............................................................................4 In re Disposable Contact Lens AntiTrust Litig., 2016 WL 6518660 (M.D. Fla. Nov. 1, 2016) ..........................................................................14 Kellgren v. Petco Animal Supplies, Inc., 2017 WL 979045 (S.D. Cal. Mar. 3, 2017) .............................................................................15 Lawrence E. Jaffee Pension Plan v. Household Int'l Inc., 2006 WL 3445742 (N.D. Ill. Nov. 22, 2006) ......................................................................4, 14 Perry v. Central Ill. Railroad Co., 2014 WL 10742632 (N.D. Ill. Nov. 6, 2014) ............................................................................8 Ret. Fund v. J.P. Morgan Chase & Co., 297 F.R.D. 99 (S.D.N.Y. 2013) ...............................................................................................14 Sapia v. Bd. of Educ. of the City of Chicago, 2017 WL 2060344 (N.D. Ill. May 15, 2017) .............................................................................4 Simon v. Northwestern Univ., 2017 WL 467677 (N.D. Ill. Feb. 3, 2017) ...............................................................................15 Rules Fed. R. Civ. P. 26.......................................................................................................................4, 15 ii Case: 1:16-cv-08637 Document #: 895 Filed: 05/18/18 Page 4 of 21 PageID #:25246 I. INTRODUCTION Between 2010 and 2012, the Department of Justice Antitrust Division ("DOJ") conducted an extensive investigation of Agri Stats. As part of that investigation—which DOJ closed on October 3, 2012, without taking any action—Agri Stats searched for and produced to the government essentially the same types of materials requested by Plaintiffs in this case. Agri Stats has provided to Plaintiffs more than 20,000 documents (totaling more than 385,000 pages) that it previously produced to the DOJ, which are reflective of the broad scope of the search conducted for the DOJ investigation and its relationship to the Plaintiffs' conspiracy claims here. Further, Agri Stats has been collecting, searching, and producing targeted sets of documents that both pre-date and post-date the DOJ investigation. Nevertheless, Plaintiffs demand that Agri Stats conduct an unreasonably burdensome and redundant search of custodial documents from the same period of the DOJ investigation based on speculation that something else might turn up. Plaintiffs' proposal is not proportional to the needs of the case, and a protective order should be granted so that Agri Stats does not need to conduct custodial searches prior to October 3, 2012. II. STATEMENT OF FACTS Agri Stats is a small company based in Fort Wayne, Indiana with approximately 98 employees. Since 1985, the company has provided reporting and consulting services to producers of and suppliers for broiler chickens. Agri Stats' earnings before interest, taxes, depreciation, and amortization ("EBITDA") last year were approximately $7.3 million; this was the company's best financial year in its 33-year history. See Snyder Dec. ¶ 3. Since being added as a new defendant in January, Agri Stats has worked diligently to keep up with the accelerated discovery schedule designed to have it catch up with the other defendants. To this end, Agri Stats has collected, reviewed, and produced several categories of documents including organizational charts, substantive sections of Agri Stats reports provided to 1 Case: 1:16-cv-08637 Document #: 895 Filed: 05/18/18 Page 5 of 21 PageID #:25247 defendants, Express Markets, Inc. ("EMI") Vital Signs newsletters, EMI webcasts and accompanying presentations, the EMI structured database from 2004-2017 and accompanying data dictionaries, lists of unique identifiers assigned to broiler producers, confidentiality policies, and financial records showing for each year from 2007-2016 a list of Agri Stats and EMI customers and the prices they were charged for each service they purchased. See Chung Dec. ¶ 3. To date, Agri Stats has produced to Plaintiffs more than 296,000 documents (totaling 9.3 million pages and 1.5 terabytes of data), including approximately 155,000 documents from before October 2012. Id. ¶ 2. Agri Stats continues to produce responsive documents identified from these and other targeted searches on a rolling basis and is prepared to begin post-2012 custodial document searches. On April 11, 2018, in response to a request by End User Plaintiffs for all documents produced to the Antitrust Division of the Department of Justice, Agri Stats produced over 20,000 documents (totaling more than 385,000 pages) that had been produced to DOJ during its 2010- 2012 investigation into Agri Stats. See Chung Dec. ¶ 4; Ex. 22.1, 2 Included in that production was the final close-out letter from DOJ on October 3, 2012, that formally ended the investigation and did not require any changes to Agri Stats' reports or business practices. See Ex. 2.3 1 On May 16, 2018, counsel for Agri Stats became aware of another production made to DOJ on February 18, 2011, that contained "certain reports Agri Stats prepared based in part on data provided by Pilgrim's Pride Corporation and Tyson Foods, Inc." See Chung Dec. ¶ 11; Ex. 1. Counsel is trying to locate a copy of that production. The reports likely also have been captured separately by a targeted search Agri Stats already performed. See infra note 6. 2 Any references to "Ex." refer to the corresponding exhibit to the Chung Declaration. 3 Current counsel did not represent Agri Stats during the DOJ investigation. After the May 8 and May 15 meet-and-confers during which the parties discussed Agri Stats' objections to Plaintiffs' search-term proposals, counsel continued to investigate various topics prompted by those discussions. As a result, counsel located on May 15 the set of CID materials and on May 16 other correspondence between Agri Stats' prior counsel and DOJ that detailed the contours of the (continued…) 2 Case: 1:16-cv-08637 Document #: 895 Filed: 05/18/18 Page 6 of 21 PageID #:25248 In addition to these targeted document searches and productions, Plaintiffs proposed search terms to be applied to the agreed-upon set of 12 Agri Stats custodians. Those proposals resulted in a 94% hit rate on a population of more than 3 million custodial documents. See Ex. 3. Cost estimates suggested that review of this number of documents would exceed Agri Stats' $7.3 million EBITDA for last year, potentially by a sizable percentage. See id.; see also Snyder Dec. ¶ 3. The extreme burdens associated with the proposal—especially considering Agri Stats' size and the extensive targeted searches that Agri Stats already was undertaking—necessitated a hard look at significant modifications that could be made. One area that Agri Stats identified to Plaintiffs as objectionable from a proportionality perspective was Plaintiffs' request that Agri Stats repeat custodial searches for the time period pre-dating the close of DOJ's investigation into Agri Stats. See Ex. 3. Plaintiffs disagreed and insisted that Agri Stats should run the same search-term list on all custodial collections that pre- date and post-date DOJ closing its investigation. Agri Stats' analyses suggest that Plaintiffs' proposal would approximately double the number of documents for review and increase the cost of review and production by approximately $1.2 to 1.7 million dollars.4 Accordingly, Agri Stats moves for a protective order. III. LEGAL STANDARD CID searches. Agri Stats promptly sent those documents to be prepared for production by its vendor and produced them to Plaintiffs on May 18, 2018. See Chung Dec. ¶ 10. 4 This estimate was calculated based on Plaintiffs' original proposed list of search terms. Plaintiffs provided a revised search-term proposal on May 17, 2018, but due to the size of the list and the custodial document population, initial tests of that list have not yet completed running. Agri Stats reserves its rights to further object to the revised list after having sufficient time to analyze it, but the revised list does not alter Agri Stats' position that custodial document searches before October 3, 2012, are not proportional to the needs of the case. 3 Case: 1:16-cv-08637 Document #: 895 Filed: 05/18/18 Page 7 of 21 PageID #:25249 The Federal Rules of Civil Procedure require discovery to be "proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit." Fed. R. Civ. P. 26(b)(1). When a party moves for a protective order, courts "must limit the frequency or extent of discovery" if it determines that "the proposed discovery is outside the scope permitted by Rule 26(b)(1)." Fed. R. Civ. P. 26(b)(2)(C). Likewise, courts must limit discovery that "is unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive" or if "the party seeking discovery has had ample opportunity to obtain the information by discovery in the action." Id. Finally, when a discovery request purports to require a search for relevant materials, the "standard. . . is reasonableness, not perfection." Agerbrink v. Model Service LLC, 2017 WL 933095, at *5 (S.D.N.Y. Mar. 8, 2017); see also Sapia v. Bd. of Educ. of the City of Chicago, 2017 WL 2060344, at *2 (N.D. Ill. May 15, 2017) ("'Parties are entitled to a reasonable opportunity to investigate the fact