United States’ Memorandum of Law In Support of Unopposed Motion For Leave To File Amended Complaint: U.S. v. Cargill Meat Solutions Corp., et al.

Case 1:22-cv-01821-SAG Document 44-1 Filed 05/17/23 Page 1 of 7

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MARYLAND

UNITED STATES OF AMERICA,

Plaintiff,

CARGILL MEAT SOLUTIONS

CORPORATION, et al.,

Defendants.

Civil Action No.: 22-cv-1821

UNITED STATES’ MEMORANDUM OF LAW IN SUPPORT OF UNOPPOSED

MOTION FOR LEAVE TO FILE AMENDED COMPLAINT

Pursuant to Rules 15(a) and 21 of the Federal Rules of Civil Procedure and Local Rule

103.6, the United States respectfully moves this Court for leave to file an Amended Complaint.

Amendment of the Complaint would not prejudice the existing parties and would further the

interests of justice. For these reasons, and those set forth more fully below, the Court should

grant the Motion to Amend.

I. STATEMENT OF FACTS

On July 25, 2022, the United States filed a civil Complaint against Cargill Meat Solutions

Corporation and Cargill, Inc. (together, “Cargill”), Wayne Farms, LLC (“Wayne”), Sanderson

Farms, Inc. (“Sanderson”), Webber, Meng, Sahl and Company, Inc., d/b/a WMS & Co., Inc.

(“WMS”), and WMS President G. Jonathan Meng (“Meng”) (collectively, the “Existing

Defendants”) seeking to enjoin them from collaborating on decisions about poultry plant worker

Consistent with Local Rule 103.6, a copy of the proposed Amended Complaint is attached to

the Motion as Exhibit 1; a redline showing the differences between the Complaint and the

proposed Amended Complaint is attached as Exhibit 2.

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compensation, including through the exchange of compensation information, and thereby

suppressing competition in the nationwide and local labor markets for poultry processing. ECF 1.

The Complaint alleges that their agreement to collaborate with and assist competing

poultry processors in making compensation decisions, to exchange compensation information,

and to facilitate this conduct through consultants is an unlawful restraint of trade in violation of

Section 1 of the Sherman Act, 15 U.S.C. § 1. Id. The Complaint further alleges that the Existing

Defendants participated in this conspiracy together with unnamed, but enumerated, co-

conspirators, specifically certain poultry processors (“Processor Co-Conspirators 1 through 18,”

see ECF 1 at ¶ 23) and another consulting firm (“Consultant Co-Conspirator 1,” see id. ¶ 22).

Although it did not identify them by name, the Complaint described these unnamed co-

conspirators and their conduct in detail, including their use of WMS to facilitate collaboration

and their exchanges of information with Existing Defendants Cargill, Wayne, Sanderson, and the

other conspirators. The Complaint further states that the co-conspirators are labeled “with

pseudonyms because the United States has an ongoing investigation into this conduct.” Id. ¶ 8

n.2, ¶ 22 n.4.

The proposed Amended Complaint adds two of the co-conspirators, George’s, Inc. and

George’s Foods, LLC (collectively, “George’s”), as named Defendants to this action. George’s

has reached a settlement with the United States, which will file contemporaneously additional

papers relevant to that settlement. The Amended Complaint does not otherwise contain

additional causes of action or requests for relief.

The Complaint also alleged that Existing Defendants Sanderson and Wayne acted deceptively

in the manner in which they compensated poultry growers in violation of Section 202(a) of the

Packers and Stockyards Act, 1921, as amended and supplemented, 7 U.S.C. § 192(a). ECF 1 at

¶¶ 208-13.

Case 1:22-cv-01821-SAG Document 44-1 Filed 05/17/23 Page 3 of 7

II. ARGUMENT

A. “Justice So Requires” Leave for the United States to Amend Its Complaint

The Federal Rules of Civil Procedure permit a party to amend its complaint “with the

opposing party’s written consent or the court’s leave” and provide that the “court should freely

give leave when justice so requires.” Fed. R. Civ. P. 15(a)(2). The Fourth Circuit has “often

described [its] Fourth Circuit policy as one to ‘liberally allow amendment,’” which “furthers a

wider federal policy of—when possible—resolving cases on the merits, instead of on

technicalities.” United States ex rel. Nicholson v. MedCom Carolinas, Inc., 42 F.4th 185, 197

(4th Cir. 2022). The Fourth Circuit has also recognized that Rule 15(a) applies to considerations

of motions to amend pleadings “when the amendment seeks to add a party.” Galustian v. Peter,

591 F.3d 724, 730 (4th Cir. 2010).

The interests of justice will be served by granting leave to amend here. The United States

seeks to amend the Complaint to add George’s as Defendants, which participated in the decades-

long conspiracy with the Existing Defendants. George’s collaborated with and assisted their

competitors in making decisions about workers’ wages and benefits and exchanged information

about current and future compensation plans, which distorted the normal bargaining and

compensation processes and artificially suppressed poultry processing workers’ compensation.

Further, the United States has already reached a settlement with George’s.

Justice requires that this conduct end, that those harmed receive relief, and that the public

be made aware of the other participants in this conduct.

B. No Factor Militating Against Leave to Amend Is Present

“[L]eave to amend a pleading should be denied only when the amendment would be

prejudicial to the opposing party, there has been bad faith on the part of the moving party, or the

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amendment would be futile.” Johnson v. Oroweat Foods Co., 785 F.2d 503, 509 (4th Cir. 1986);

see also Edwards v. City of Goldsboro, 178 F.3d 231, 242 (4th Cir. 1999). None of these factors

is present in the United States’ request.

First, allowing the proposed amendment of the United States’ Complaint at this time

would not cause prejudice to the opposing parties. “[T]he Fourth Circuit has very narrowly

defined prejudice sufficient to overcome the liberal standard for granting amendments.” Next

Generation Group, LLC v. Sylvan Learning Centers, LLC, 2012 WL 37397 at *5 (D. Md. Jan. 5,

2012). “Whether an amendment is prejudicial will often be determined by the nature of the

amendment and its timing,” for example, an amendment “that raises a new legal theory that

would require the gathering and analysis of facts not already considered by the defendant, and is

offered shortly before or during trial.” Laber v. Harvey, 438 F.3d 404, 427 (4th Cir. 2006)

(internal quotation marks, alterations, and citation omitted). The Existing Defendants have

already consented to resolving this matter through the Tunney Act proceedings (described in

ECF 2, 3, 11, and 12) and do not oppose the United States’ request. Like the Existing

Defendants, George’s has reached a proposed final judgment with the United States.

Second, the United States has acted in good faith in seeking to amend its Complaint. As

the Fourth Circuit has recognized, bad faith “is a difficult term to define,” but “[i]t may be

outright lying, deceiving, playing unjustifiable hardball, slacking off, intentionally causing

confusion, or stubbornly refusing to follow rules—you can imagine cases where a party just

wants to cause chaos—or it might be something as mundane as noticing someone’s mistake and

saying nothing about it.” MedCom Carolinas, 42 F.4th at 198. The United States did not wait to

name George’s for reasons of deception, misdirection, or any other reason suggesting bad faith.

In fact, in the Complaint, the United States stated that its reason for not identifying other

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conspirators by name was because its investigation into the conduct was ongoing (ECF 1 at ¶ 8

n.2, ¶ 22 n.4). At this time in its ongoing investigation, the United States has determined it is

appropriate to add George’s, which has reached a settlement with the United States. The United

States will file contemporaneously additional papers relevant to that settlement.

Third, the proposed amendment of the United States’ Complaint would not be futile.

“Determining whether amendment would be futile does not involve an evaluation of the

underlying merits of the case.” Kolb v. ACRA Control, Ltd., 21 F. Supp. 3d 515, 522 (D. Md.

2014) (internal quotation marks omitted). A proposed amendment is futile when “it is clearly

insufficient or frivolous on its face.” Johnson, 785 F.2d at 510. Through the Amended

Complaint, the United States would join to this action as Defendants co-conspirators who

participated in the anticompetitive conduct already described in the Complaint; such amendment

would further justice and serve the public interest in prosecuting and ending the co-conspirators’

anticompetitive conduct and rectifying its effects.

For the foregoing reasons, the United States respectfully requests that the Court grant the

motion seeking leave to file an Amended Complaint.

Dated: May 17, 2023

Respectfully submitted,

FOR PLAINTIFF 

UNITED STATES OF AMERICA

/s/ Kathleen Simpson Kiernan

Kathleen Simpson Kiernan

Jessica J. Taticchi

Jeremy C. Keeney

Eun Ha Kim

U.S. Department of Justice

Antitrust Division

Civil Conduct Task Force

450 Fifth Street NW, Suite 8600

Case 1:22-cv-01821-SAG Document 44-1 Filed 05/17/23 Page 6 of 7

Washington, DC 20530

Tel: 202-353-3100

Fax: 202-616-2441

Email: [email protected]

Erek L. Barron

United States Attorney

Ariana Wright Arnold

Assistant United States Attorney

Md. Federal Bar No. 23000

United States Attorney’s Office

District of Maryland

36 South Charles Street, Fourth Floor

Baltimore, Maryland, 21201

Telephone: (410) 209-4813

Email: [email protected]



Case 1:22-cv-01821-SAG Document 44-1 Filed 05/17/23 Page 7 of 7

CERTIFICATE OF SERVICE

I, Kathleen Simpson Kiernan, hereby certify that on May 17, 2023, I caused true and correct

copies of the United States’ Memorandum of Law in Support of Unopposed Motion for Leave to

File Amended Complaint to be served via the Court’s CM/ECF system.

FOR PLAINTIFF

UNITED STATES OF AMERICA

/s/ Kathleen Simpson Kiernan

Kathleen Simpson Kiernan

U.S. Department of Justice

Antitrust Division

Civil Conduct Task Force

450 Fifth Street NW, Suite 8600

Washington, DC 20530

Tel: 202-353-3100

Fax: 202-616-2441

Email: [email protected]