Maplevale Farms, Inc. v. Koch Foods, Inc. et al

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

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

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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 facts—and no more.'"). Thus, when a party already has produced documents from a prior investigation, courts may find that "plaintiffs [are] not entitled to additional discovery beyond that which they [have] already received." Lawrence E. Jaffee Pension Plan v. Household Int'l Inc., 2006 WL 3445742, at *4 (N.D. Ill. Nov. 22, 2006). IV. ARGUMENT A. The Department of Justice Antitrust Division Investigation Substantially Overlaps with Plaintiffs' Requests for Production to Agri Stats. DOJ's Civil Investigative Demand ("CID") contained broad document requests similar to those Plaintiffs have served on Agri Stats, and Agri Stats conducted extensive searches for 4 Case: 1:16-cv-08637 Document #: 895 Filed: 05/18/18 Page 8 of 21 PageID #:25250 responsive documents. Those searches included custodial searches on most of the same custodians Plaintiffs have requested (plus many more) and involved a lengthy search-term list. Furthermore, the produced documents and explanatory white paper confirm that the scope of DOJ's comprehensive investigation overlaps substantially with the key topics at issue in this litigation. Accordingly, Agri Stats should not be required to conduct additional burdensome custodial document searches for the time period pre-dating DOJ's close-out letter. 1. DOJ's Broad and Comprehensive Request to Agri Stats Addressed Claims at Issue in the Current Litigation. The Department of Justice issued a broad CID to Agri Stats on September 17, 2010. See Exs. 4-6. The CID sought "materials as part of an Antitrust Division investigation into possible agreements to exchange competitively sensitive price and cost information in the broiler [and other] industries." See Ex. 4. In particular, the investigation focused on whether such agreements existed and/or violated Section 1 of the Sherman Act. See Ex. 5. The CID specifications and subsequent correspondence with DOJ required Agri Stats to conduct both targeted searches and custodial document searches using search terms. The targeted search specifications called for documents including, for instance:  Organizational charts (spec. 1)  Benchmarking reports distributed to participants (spec. 2)  Copies of data submissions participants made to Agri Stats (spec. 4)  Lists of participants in the services at issue and the types of services received by each participant (spec. 5)  Contracts or agreements with each participant (spec. 6)  Pricing of services provided to each participant (spec. 6)  Manuals provided to participants related to the services at issue (spec. 7)  Internal manuals used by Agri Stats' personnel in providing services (spec. 8)  Information on the formation of the company (spec. 12)  A description of the financial relationship between the company or its employees and any participant in the company's services (spec. 13) 5 Case: 1:16-cv-08637 Document #: 895 Filed: 05/18/18 Page 9 of 21 PageID #:25251 See Ex. 6. The custodial search specifications required searches for the following categories of information:  Documents relating to participants' requests for a grouping of comparative data (spec. 3)  Documents relating to requests for additions or modifications to reports or to the types or categories of data reported (spec. 3)  Policies and practices used by the company to preserve confidentiality and prevent identification of participants' data (spec. 9)  Documents relating to the aggregation of data in reports (spec. 9)  Documents relating to the timeliness of data reported (spec. 9)  Communications with participants relating to the purpose, use, benefits, or value of the benchmarking services (spec. 10)  Communications with participants relating to other Agri Stats participants (spec. 10)  Communications with participants relating to geographic markets, regions or sub- regions used in reports (spec. 10)  Communications with participants relating to speculation or predictions regarding future prices or costs (spec. 10)  Documents relating to efforts to obtain new participants (spec. 11)  Communications with prospective participants regarding the purpose, use, benefits, or value of participating in the company's benchmarking services (spec. 11)  Marketing, sales, or promotional materials used by Agri Stats to obtain new participants (spec. 11) See Ex. 6. The custodial document population was collected from 27 document custodians agreed upon with DOJ. See Ex. 7. Agri Stats implemented the custodial searches by running a lengthy list of search terms on the custodial collections.5 The search terms and the manner in which they were implemented were broad enough to presumptively hit upon large sets of custodial documents. See Ex. 11 (terms were run by "incorporating wildcards in order to search against variations of a word" and employed "proximity search capability" to broaden the hit results). Not only did they cover the 5 See Ex. 8 (email attachment containing search term proposal); Ex. 9 (letter noting agreement to search term proposal); Ex. 10 (letter noting agreement to modifications to search term proposal); Ex. 11 (attachment reflecting further detail on implementation of search terms). 6 Case: 1:16-cv-08637 Document #: 895 Filed: 05/18/18 Page 10 of 21 PageID #:25252 broad categories referenced above, they also included domain names for six of Agri Stats' customers (meaning that the specified custodians' emails to or from Foster Farms, Pilgrim's, Perdue, Sanderson Farms, Tyson, and Wayne Farms would have been captured and reviewed) and broad terms like "markets" that likely hit every document that mentioned Agri Stats' subsidiary Express Markets, Inc., including any of its reports or presentations. Agri Stats spent more than $1.3 million in legal fees and costs for the DOJ investigation, which put substantial financial strain on a company that had only $2.4 million in income before taxes in 2010 when the investigation began. See Snyder Dec. ¶¶ 2-3. Nevertheless, Agri Stats cooperated fully with DOJ. And after a two-year investigation, DOJ closed its inquiry without requiring Agri Stats to make any changes to its business. See Ex. 2. In the present litigation, Plaintiffs challenge the same services and practices that were the subject of DOJ's investigation and seek largely the same types of documents. See, e.g., Ex. 12, RFP Nos. 2, 11, 13, 33 (Agri Stats and EMI reports, publications, and presentations); RFP Nos. 34, 35, 36 (documents related to the confidentiality of participant data and/or modifications to reports); RFP Nos. 10, 14, 15, 16, 26 (documents related to communications with broiler producers); RFP Nos. 22, 23, 25, 28, 29, 30, 31, 32 (documents related to commentary on pricing and supply in the broiler industry); RFP No. 3, 38 (documents related to broiler producers' contracts, agreements, and subscriptions to Agri Stats). Indeed, even the custodians overlap to a significant degree. Of the 12 agreed-upon custodians in this case, 9 also were DOJ custodians. Compare Chung Dec., ¶ 5, with Ex. 7. Two of the remaining three are Agri Stats account managers who started at Agri Stats either after or just before the DOJ closed its investigation. See Snyder Decl. ¶ 4 (explaining that Sam LeNarz and Charles McDaniel started at Agri Stats in 2014 and June 2012, respectively). Thus, most or 7 Case: 1:16-cv-08637 Document #: 895 Filed: 05/18/18 Page 11 of 21 PageID #:25253 all of their documents would fall after the October 2012 investigation close-out date. The only remaining custodian for this case who was not on the DOJ list is former Agri Stats office- manager/receptionist Rita Korn. The sufficiency of the DOJ searches cannot be called into question based on a single office staff member being left off the custodian list, especially considering the 18 other individuals whose documents were searched in lieu of Ms. Korn's. See Perry v. Central Ill. Railroad Co., 2014 WL 10742632, at *2 (N.D. Ill. Nov. 6, 2014) (finding discovery unreasonably cumulative when "it is reasonable to assume that search of" other custodians' documents would have captured relevant documents). 2. The Productions to DOJ Confirm that the Searches Agri Stats Performed Were Effective in Locating the Documents Plaintiffs Seek. The breadth of the DOJ investigation and the duplicative nature of Plaintiffs' discovery requests are further underscored by the documents Agri Stats produced for DOJ (and re- produced for Plaintiffs in this case). Agri Stats and EMI Reports and Analyses. DOJ was provided with substantial information regarding the reports and services at issue in the complaint. This information included exemplars of each type of monthly broiler report,6 examples of EMI's price discovery reports,7 and also EMI analytics presentations.8 6 See, e.g., AGSTAT-00029273-525 (processing); AGSTAT-00178497-952 (live); AGSTAT- 00037318-465 (express sales); AGSTAT-00038097-111 (customer sales); AGSTAT-00067051- 54 (bottom-line); AGSTAT-00099449-566 (operating profit); AGSTAT-00084873-985 (weekly); see also Ex. 8 (stating Agri Stats would "produce a copy of each report provided by Agri Stats to Tyson Foods, Inc., Pilgrim's Pride Corporation, Perdue Farms Inc., Sanderson Farms, Inc., Foster Farms, and Wayne Farms LLC incorporating data from April and May 2010"). Agri Stats already has agreed to conduct a targeted search for and produce other monthly broiler reports sent to these or other defendants between January 1, 2007 and September 2, 2016. 7 See, e.g., AGSTAT-00218127-131. 8 Case: 1:16-cv-08637 Document #: 895 Filed: 05/18/18 Page 12 of 21 PageID #:25254 Documents Related to Supply and Pricing Trends. Plaintiffs also seek documents relating to supply and pricing.9 These categories, too, were captured by the DOJ searches. For example, Agri Stats produced to DOJ a presentation to a major fast-food chain discussing supply and pricing trends. See Ex. 13 (presenting examples of graphs Agri Stats provides to broiler producers, walking through an example of how a broiler producer might use Agri Stats' reports "to improve efficiencies," and discussing supply, price, and cost trends in the broiler industry). In addition, a produced EMI conference agenda references presentations by broiler purchasers, industry analysts, and a professor titled "Food Service in a Difficult Economy," "Broiler Industry Outlook," "Broiler Pricing," and "Competing Meats." Ex. 14; see also Ex. 15 (EMI conference presentation by fast-food restaurant discussing "demand for dark meat"). Communications with Participants. The DOJ productions also confirm that Agri Stats' searches resulted in production of many communications between Agri Stats or EMI and their subscribers. See, e.g., Ex. 16 (explaining to customer steps Agri Stats would take to "maintain[] [the customer's] confidentiality while still being able to give you good information on relative advantages or disadvantages in the non-antibiotic parts of feed formulations as well as ingredient purchasing and broiler growout"). Documents Relating to Confidentiality of Participant Data. Plaintiffs also requested information on anonymization and confidentiality.10 Once again, the DOJ productions reveal 8 See, e.g., AGSTAT-00361495-539. The DOJ productions also included general customer lists for both Agri Stats and EMI reflecting that "allied companies" including companies that produce inputs for broiler production and public universities, received Agri Stats reports and that a multitude of fast-food restaurant chains, food distributors (including Plaintiff US Foods), purchasing co-ops (including a co-op to which several of the Affiliated Foods plaintiffs belong), industry analysts, and others subscribed to EMI. 9 See Ex. 12 (RFP Nos. 2, 10-11, 13, 17-18, 21-25, 28-33). 10 See Ex. 12 (RFP Nos. 3, 9, 34-36). 9 Case: 1:16-cv-08637 Document #: 895 Filed: 05/18/18 Page 13 of 21 PageID #:25255 that searches for these topics would be duplicative of efforts already made. Agri Stats produced to DOJ information on its confidentiality policies. See, e.g., Ex. 18 (employee confidentiality agreement); Ex. 19 (confidentiality policy). It also produced documents relating to its practice of "x-ing out" information (i.e., listing an "X" instead of a value for certain report fields) that poses a risk of being linked to a certain participant. See Ex. 20, at 8-9 (noting that Agri Stats would "x out" potentially identifying information on its reports); Ex. 21 (email between Agri Stats employees stating "[w]e need to X-out all columns in the broiler live analysis that displays '% Males'. [Customer] is the only company sexing their chicks at this time and it makes it obvious who they are"); see also Ex. 20, at 12 n.32 ("Agri Stats. . . excludes all information about the volume of chicken delivered (in numbers of birds and pounds. . .)"). 3. The White Paper Produced to DOJ Confirms the Breadth and Scope of the Investigation. Furthermore, the white paper Agri Stats prepared for DOJ after completing its document productions is instructive on the breadth and scope of DOJ's investigation. The white paper was submitted to DOJ in March 2011 after the last document production in February 2011 and was written to address follow-up questions "raised regarding the Agri Stats benchmarking reports." Ex. 17. Throughout the white paper, Agri Stats notes that it is responding to inquiries from DOJ, and these inquiries confirm that DOJ was focused on many of the same issues Plaintiffs raise in their complaints. Monthly Agri Stats Benchmarking Reports That Involve Production and Processing. The white paper demonstrates that after receiving comprehensive productions relating to different types of reports and services provided by Agri Stats and EMI, DOJ was focused on "production and processing-related reports for the broiler industry." See Ex. 20, at 11 & n.30 ("We focus on the monthly reports because they are the most significant and most relied on. . . 10 Case: 1:16-cv-08637 Document #: 895 Filed: 05/18/18 Page 14 of 21 PageID #:25256 and have been the focus of the questions in our prior discussions with staff."). Specifically, two of the reports that DOJ inquired about were (1) the monthly live report, which "provides a summary and analysis of total production costs for a broiler from the time a hen is placed to lay the egg from which a broiler is hatched through the hatching and grow-out process to the time the live broiler is delivered to a processor's facility," id. at 11-12, and (2) the monthly processing plant analysis, which "provides a summary and analysis of total processing costs from the time the live broiler is delivered to a processing facility until it is shipped to a customer in processed form," id. at 12. Those are the same reports that are at the crux of Plaintiffs' allegations in the present litigation.11 Role of Agri Stats' Reports in Promoting Productivity and Efficiency. The white paper also highlights DOJ's focus on how Agri Stats' reports "enhanc[e] the productivity and efficiency of a processor facility." Id. at 18; see also id. at 17-18 ("Staff has also asked whether this level of detail is necessary to achieve the productivity and efficiency improvements that benchmarking offers."); cf. Compl. ¶ 208.12 As the reports produced to DOJ show, "Agri Stats measures that productivity and efficiency in such metrics as cost/pound of chicken delivered or pounds delivered/square foot of grower housing in order to permit reliable comparison between facilities and to preserve the confidentiality of individual participating facilities." Ex. 20, at 18. Its reports allow a broiler company recipient to maximize productivity "by allowing it not only to evaluate how it compares to others in the numerous metrics reported but also to gain a better understanding of the factors that affected the relative performance of other comparable facilities whose productivity was better or worse than its own." Id. at 19. The recipients can then use this 11 Compare with Compl. ¶¶ 176, 410. 12 All citations to "Compl." refer to the End-User Consumer Plaintiffs' Second Consolidated Amended Class Action Complaint (Dkt. No. 716). 11 Case: 1:16-cv-08637 Document #: 895 Filed: 05/18/18 Page 15 of 21 PageID #:25257 information to "make a better informed decision as to how to conduct its own operations in an attempt to maximize productivity and efficiency." Id. at 20. "[E]ven minor improvements in such productivity and efficiency can yield substantial gains for all participants in the broiler industry, which ultimately benefit consumers." Id. at 22 n.41 (citing document produced to DOJ that indicates "[a] one cent change per pound is equal to $2,288,000 per year for a million bird per week complex at a 4.4 pound weight"). Necessity of the Level of Granularity in Agri Stats' Reports. As do Plaintiffs in this case, DOJ focused on the level of detail in Agri Stats' anonymized reports. Compare id. at 17 ("Staff has inquired why Agri Stats presents data. . . in as much detail as it does and on a facility-by-facility basis."), with Compl. ¶¶ 8, 181-82, 410. The DOJ investigation addressed this question directly, and revealed why more granular information is vital: "[r]eliance on averages for all facilities nationally—or even on regional averages—will not provide the detail necessary to understand the realm of possibilities and to make these decisions" regarding productivity enhancement. Ex. 20, at 20. In response to a suggestion that aggregation was an alternative means of presenting the data, Agri Stats explained that aggregation "would obscure the critical details regarding the interrelationship of the many individual factors affecting individual facility productivity and efficiency and would prevent participating facilities from spotting and addressing sub-optimal performance and its likely causes." Id.; see also id. at 21-22 (providing example of how detail in Agri Stats report would be used to identify efficiency opportunity). Necessity of Timely Data to the Efficiency Gains Promoted by Agri Stats' Reports. Like Plaintiffs here, see Compl. ¶¶ 8, 175, 187, DOJ also "inquired whether it is essential for Agri Stats to provide data on as timely a basis as it does." Id. at 23. Agri Stats explained that "[g]row-out costs in the broiler industry can vary dramatically over time due, for example, to 12 Case: 1:16-cv-08637 Document #: 895 Filed: 05/18/18 Page 16 of 21 PageID #:25258 volatility in the prices of feed and fuel and to seasonal and other weather variations." Id. In fact, "[t]hree months is substantially longer than an entire growing season" for broilers. Id. Because "for the broiler industry, efficiency-enhancing information becomes stale very quickly," effective benchmarking reports must give participating facilities the ability "to obtain the information they need in time to react quickly if their performance begins to lag." Id. Agri Stats' Policies and Practices for Protecting the Confidentiality of Participants' Data. The white paper also shows that confidentiality was a central focus of DOJ's investigation, just as it is in Plaintiffs' complaint. Compare id. at 24-25, with Compl. ¶ 178. Agri Stats amassed its confidentiality policies for DOJ, explaining and producing documents on policies and practices:  Requiring all employees to sign agreements to protect participant confidentiality, id. at 24;  Instructing participants on the confidential nature of the information in the reports and prohibiting them from sharing reports outside their company, id.;  Restricting "access to identifiable individual participant data on a 'need to know' basis within Agri Stats," id.;  Regularly reviewing reports "to ensure that the number of facilities and participants involved is sufficient to protect the confidentiality of participants and their data," id.;  Redacting names, regions/sub-regions, volume of chicken grown and processed, and "other information that might conceivably make it possible to identify" participants, id.;  Reporting metrics on a per unit basis (e.g., cents/pound, dollars or pounds/square foot, etc.) rather than on an absolute dollar volume, id. at 24-25;  Excluding or substituting data for a participant if "a temporary aberration in an individual participant's data could conceivably disclose the participant's identity," id. at 25;  Declining or modifying requests to produce special reports "that might compromise the confidentiality of another participant's data," id. DOJ thus had a clear focus on Agri Stats' confidentiality and anonymization practices, and there is no basis to suggest that its investigation was somehow lacking. Indeed, it is notable that after focusing on these aspects of Agri Stats' business practices, DOJ did not require that 13 Case: 1:16-cv-08637 Document #: 895 Filed: 05/18/18 Page 17 of 21 PageID #:25259 Agri Stats aggregate data or change the level of granularity in its reports, alter the timeliness of its reporting practices, or adopt additional confidentiality or anonymization practices. B. Agri Stats Should Not Be Required To Conduct Burdensome, Duplicative Custodial Searches. Agri Stats does not ask the Court to exempt it from all discovery prior to October 2012. See supra at 2 (detailing targeted searches Agri Stats is conducting for the entire Relevant Time Period). Indeed, Agri Stats already has produced 155,000 documents that pre-date October 2012 as a result of targeted searches. Nor does Agri Stats seek to be exempted from custodial document searches altogether. See supra at 2-3. Rather, Agri Stats requests relief from Plaintiffs' proposal that it effectively re-do expensive and burdensome custodial document searches for the time period prior to the close of DOJ's investigation. Where, as here, civil discovery requests would be duplicative of government investigations, courts routinely limit the scope of the requests. See, e.g., Lawrence E. Jaffee Pension Plan, 2006 WL 3445742, at *4 (denying request for discovery during time period when "plaintiffs have already received thousands of pages of documents from [that period] relating to the investigations by, and settlement with, state attorneys general"); In re Disposable Contact Lens AntiTrust Litig., 2016 WL 6518660, at *2-3 (M.D. Fla. Nov. 1, 2016) (limiting additional discovery when a defendant spent $700,000 in a prior government investigation and would incur an additional $1.5 million to produce the discovery sought by plaintiffs); see also Ft. Worth Emps.' Ret. Fund v. J.P. Morgan Chase & Co., 297 F.R.D. 99, 111 n.9 (S.D.N.Y. 2013) (recognizing that attempts to "'piggyback' on government investigations can lead to 'plainly cumulative and unnecessarily burdensome' discovery"). The arguments for limitation become even more compelling in the context of a small company like Agri Stats that had only $7.3 million in EBITDA last year. The pre-October 2012 14 Case: 1:16-cv-08637 Document #: 895 Filed: 05/18/18 Page 18 of 21 PageID #:25260 custodial searches Plaintiffs have proposed are estimated to cost approximately $1.2 – 1.7 million, a sizable percentage of last year's operating income. This is on top of the cost for conducting post-2012 custodial searches and extensive targeted searches that have already yielded over 9.3 million pages of produced documents. Courts in this district previously have denied discovery requests that would be "'extremely costly'" when the producing party was willing to produce a more narrow set of the most relevant documents. See, e.g., Simon v. Northwestern Univ., 2017 WL 467677, at *8 (N.D. Ill. Feb. 3, 2017); see also Kellgren v. Petco Animal Supplies, Inc., 2017 WL 979045, at *5 (S.D. Cal. Mar. 3, 2017) (finding that "the significant cost associated with searching for and producing information"—which would be between $277,000 and $1 million—was not proportional to the needs of the case). In light of the considerable overlap between the DOJ Investigation and Plaintiffs' RFPs, requiring Agri Stats to incur additional custodial review costs would be disproportionate to the needs of the case. Finally, Plaintiffs' requested custodial searches are not proportional to the needs of the case because the significant burdens involved are not outweighed by any "likely benefit" of additional discovery. Fed. R. Civ. P. 26(b)(1). DOJ's Antitrust Division investigated Agri Stats for two years to determine whether it had any evidence of agreements violating Section 1 of the Sherman Act. DOJ closed the investigation without imposing any conditions on Agri Stats or requiring Agri Stats to make any changes to its reports or business practices. See Ex. 2. Without more, Plaintiffs should not be allowed to require the burdensome custodial searches requested here for the time period already examined extensively by DOJ. V. CONCLUSION For the foregoing reasons, Agri Stats requests that the Court grant it a protective order clarifying that Agri Stats need not conduct custodial document searches prior to October 3, 2012—the date DOJ closed its investigation. 15 Case: 1:16-cv-08637 Document #: 895 Filed: 05/18/18 Page 19 of 21 PageID #:25261 DATED: May 18, 2018 Respectfully submitted, /s/ Jacob D. Koering Thomas O. Barnett Anne Y. Lee Michael Baker COVINGTON & BURLING LLP One CityCenter 850 Tenth Street, NW Washington, DC 20001 Phone: 202-662-5535 Fax: 202-778-5535 tbarnett@cov.com alee@cov.com mbaker@cov.com Kathryn E. Cahoy COVINGTON & BURLING LLP 333 Twin Dolphin Dr., Suite 700 Redwood Shores, CA 94065 Phone: 650-632-4735 Fax: 650-632-4800 kcahoy@cov.com Jacob D. Koering MILLER, CANFIELD, PADDOCK AND STONE, P.L.C. 225 W. Washington Suite 2600 Chicago, Illinois 60606 Phone: 312-460-4272 Fax: 312-460-4201 koering@millercanfield.com Christopher A. Knight MILLER, CANFIELD, PADDOCK AND STONE, P.L.C. 150 W. Jefferson Suite 2500 Detroit, MI 48226 Phone: 313-963-6420 Fax: 313-496-7500 16 Case: 1:16-cv-08637 Document #: 895 Filed: 05/18/18 Page 20 of 21 PageID #:25262 knight@millercanfield.com Counsel for Defendant Agri Stats, Inc. 17 Case: 1:16-cv-08637 Document #: 895 Filed: 05/18/18 Page 21 of 21 PageID #:25263 CERTIFICATE OF SERVICE I hereby certify that on May 17, 2018, I caused a copy of the foregoing MEMORANDUM IN SUPPORT OF DEFENDANT AGRI STATS, INC.'S MOTION FOR PROTECTIVE ORDER to be served on all counsel of record via the CM/ECF filing system of the Northern District of Illinois. Dated: May 18, 2018 /s/ Jacob D. Koering Jacob D. Koering MILLER, CANFIELD, PADDOCK AND STONE, P.L.C. 225 West Washington Street, Suite 2600 Chicago, Illinois 60606 Telephone: (312) 460-4200 Facsimile: (312) 460-4201 koering@millercanfield.com 18