Federal Register / Vol. 88, No. 234 / Thursday, December 7, 2023 / Notices 85311 

1Most chicken farmers raise ‘‘broilers,’’ the 

chickens that are slaughtered and processed for 

people to consume. Other chicken farmers raise 

breeder hens or pullets (chicks). In at least some 

cases, Koch imposed its exit fees on breeder-hen 

and pullet farmers as well as broiler farmers. 

5. Outstanding action jackets: none. 

CONTACT PERSON FOR MORE INFORMATION: 

Sharon Bellamy, Supervisory Hearings 

and Information Officer, 202–205–2000. 

The Commission is holding the 

meeting under the Government in the 

Sunshine Act, 5 U.S.C. 552(b). In 

accordance with Commission policy, 

subject matter listed above, not disposed 

of at the scheduled meeting, may be 

carried over to the agenda of the 

following meeting. 

By order of the Commission. 

Issued: December 5, 2023. 

Sharon Bellamy, 

Supervisory Hearings and Information 

Officer. 

[FR Doc. 2023–26967 Filed 12–5–23; 4:15 pm] 

BILLING CODE 7020–02–P 

DEPARTMENT OF JUSTICE 

Antitrust Division 

United States v. Koch Foods 

Incorporated; Proposed Final 

Judgment and Competitive Impact 

Statement 

Notice is hereby given pursuant to the 

Antitrust Procedures and Penalties Act, 

15 U.S.C. 16(b)–(h), that a proposed 

Final Judgment, Stipulation, and 

Competitive Impact Statement have 

been filed with the United States 

District Court for the Northern District 

of Illinois, Eastern Division, in United 

States v. Koch Foods Incorporated, Civil 

Action No. 23–15813. On November 9, 

2023, the United States filed a 

Complaint alleging that Koch Foods 

Incorporated (‘‘Koch’’), one of the 

largest poultry processors in the United 

States, unlawfully requires independent 

chicken farmers to pay Koch an exit fee 

if the farmers switch from working with 

Koch to working with one of its rivals. 

Koch’s practices are alleged to violate 

section 202(a) of the Packers and 

Stockyards Act and section 1 of the 

Sherman Act. 

The proposed Final Judgment, filed at 

the same time as the Complaint, 

requires Koch to refrain from including 

a termination payment obligation in any 

farmer contracts and from taking any 

steps to collect any termination 

payments for the next seven years. It 

also requires Koch to repay all 

termination payments it has received 

from farmers, and to reimburse farmers 

for legal costs they incurred in 

responding to Koch’s efforts to collect 

termination payments. 

Koch is required to certify that it has 

given the required notices to farmers, 

made the required payments and 

reimbursements within 120 days of 

entry of the Final Judgment, and 

submitted any disputed claims for 

payment or reimbursement to a referee 

selected by the Division, whose decision 

will be final. Koch will provide an 

annual certification that it continues to 

comply with provisions of the proposed 

Final Judgment for its duration of seven 

years, unless it is terminated earlier by 

agreement with the Division and a 

determination by the Court that 

termination is in the public interest. The 

proposed Final Judgment also imposes 

other cooperation and reporting 

requirements. 

Copies of the Complaint, proposed 

Final Judgment, and Competitive Impact 

Statement are available for inspection 

on the Antitrust Division’s website at 

http://www.justice.gov/atr and at the 

Office of the Clerk of the United States 

District Court for the Northern District 

of Illinois, Eastern Division. Copies of 

these materials may be obtained from 

the Antitrust Division upon request and 

payment of the copying fee set by 

Department of Justice regulations. 

Public comment is invited within 60 

days of the date of this notice. Such 

comments, including the name of the 

submitter, and responses thereto, will be 

posted on the Antitrust Division’s 

website, filed with the Court, and, under 

certain circumstances, published in the 

Federal Register. Comments should be 

submitted in English and directed to 

Chief, Civil Conduct Task Force, 

Antitrust Division, Department of 

Justice, 450 Fifth Street NW, Suite 8600, 

Washington, DC 20530 (email address: 

ATRJudgmentCompliance@usdoj.gov). 

Suzanne Morris, 

Deputy Director of Civil Enforcement 

Operations, Antitrust Division. 

United States District Court for the 

Northern District of Illinois Eastern 

Division 

United States of America, 450 Fifth Street 

NW, Washington, DC 20530, Plaintiff, v. 

Koch Foods Incorporated, 1300 W Higgins 

Road, Suite 100, Park Ridge, IL 60068, 

Defendant. 

Case No. 1:23–cv–15813 

Judge John F. Kness 

Complaint 

Raising chickens is a bet-the-farm 

proposition. Many chicken farmers must 

borrow hundreds of thousands of 

dollars to finance the construction of 

chicken houses—huge structures that 

hold over 50,000 chickens each. A 

farmer is largely beholden to a poultry 

processor, which owns the chicks, feed, 

antibiotics, and other inputs for raising 

chickens. Without a loan from the bank, 

there is no farm; without a contract with 

a processor, there is no loan; and 

without the processor’s fair dealing, the 

farm may fail. 

To secure better working conditions 

or pay, a chicken farmer’s only recourse 

often is switching processors. Even in 

the best of circumstances, competition 

for farmers’ chicken growing services is 

uncertain because switching processors 

can be a costly, risky, and difficult 

endeavor. But Koch Foods, a leading 

poultry processor, has suppressed 

competition even further by imposing 

exit penalties on its chicken farmers 

who want to switch to a competitor. 

Koch’s conduct deprives farmers of the 

benefits of competition and lowers their 

compensation. Koch’s exit penalties are 

an unfair practice under section 202(a) 

of the Packers and Stockyards Act and 

violate section 1 of the Sherman Act. 

These practices should be enjoined. 

I. Introduction 

1. A chicken farmer’s success depends 

on a processor. A farmer must invest 

hundreds of thousands of dollars to 

build chicken houses to a processor’s 

specifications. A bank will loan money 

for the construction only if a processor 

has agreed to offer the farmer a contract; 

the bank often sees the farmer’s contract 

before the farmer. After obtaining a loan 

and building the houses, the farmer 

generally has no practical alternative 

but to accept the contract terms for 

growing chickens offered by the 

processor. 

2. Once built, chickens houses cannot 

be relocated or readily repurposed. If 

the processor provides insufficient 

flocks, poor quality chicks, or 

substandard feed, the farmer may not 

earn enough to meet the terms of the 

loan—and can literally lose the farm. 

3. Broiler chicken farmers, commonly 

called ‘‘growers,’’ generally can contract 

only with a processor operating a 

processing facility close enough to 

transport chickens and feed costeffectively.1 Few growers have more 

than three other processors close 

enough to contract for their growing 

services. And when the grower wants to 

switch processors, alternative 

processors may not need new growers. 

4. For these reasons, processors have 

substantial leverage over contract 

growers. Where it exists, competition 

among processors for chicken growers 

can sometimes increase their 

compensation and motivate a processor 

to provide better terms to farmers. 

Growers’ ability to switch processors 


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provides some check, even if a limited 

one. 

5. Beginning in 2014, Koch Foods— 

one of the five largest chicken 

processors in the United States— 

introduced an exit penalty in its grower 

contracts to insulate itself from 

competition. If a farmer switches from 

Koch to a different processor within 10 

years (later extended to 15 years) of 

contracting with Koch, the farmer must 

pay a penalty. Depending on the size of 

the farm, the penalty amount can range 

from $24,000 to $56,000 or, for one 

facility’s farmers, up to hundreds of 

thousands of dollars. Such penalties 

exceed 50 to 100 percent of many 

farmers’ annual income given farmers’ 

limited take-home pay after deducting 

operating expenses. 

6. The goal of Koch’s exit penalty is 

clear: Koch wants to make it more 

difficult for its growers to switch to 

another processor. Koch claims that the 

exit penalty was meant to compensate 

Koch Foods for the real impact growers 

leaving has on Koch. But that is just 

another way of saying that, without the 

exit penalty, Koch would have to pay 

farmers competitive rates to keep them 

from switching to one of Koch’s 

competitors. 

7. Koch has enforced its exit penalty 

to prevent its chicken farmers from 

leaving. Koch has sued or threatened to 

sue at least 14 farmers who wanted to 

switch to a competing processor. Other 

farmers, faced with the exit penalty and 

threat of litigation, have declined better 

opportunities with other processors and 

returned to Koch. 

8. The exit penalty is an ‘‘unfair . . . 

practice or device’’ under the Packers 

and Stockyards Act, 7 U.S.C. 192(a), 

because growers cannot reasonably 

avoid the penalty provision, its 

existence and enforcement substantially 

harm growers, and any countervailing 

benefit to growers does not outweigh the 

harm. 

9. In addition, under Packers and 

Stockyards Act regulations, 9 CFR 

201.100(h)(2), a broiler farmer has the 

right to terminate its poultry growing 

arrangement in writing with at least 90 

days’ prior notice. By unreasonably 

burdening farmers’ right to terminate 

their production contracts, the Koch exit 

penalty provision violates this 

regulation. 

10. The exit penalty has harmed 

competition, and therefore suppressed 

compensation, for growers. Koch has a 

sufficient share of the relevant markets 

for the penalty to foreclose competition; 

its purpose for imposing and enforcing 

the penalty is to prevent or limit 

competition; and the penalty has 

prevented growers from accepting better 

terms. The exit penalty therefore 

unreasonably restrains trade in violation 

of section 1 of the Sherman Act. 

11. The Department of Justice brings 

this action on behalf of the United 

States and the U.S. Department of 

Agriculture to enjoin Koch’s unlawful 

exit penalty practices. 

II. Factual Allegations 

A. Koch Uses Independent Farmers To 

Raise Its Broiler Chickens 

12. Koch Foods is the fifth largest 

broiler chicken processor in the United 

States, with $4.7 billion in sales in 2022. 

Koch is a privately held company, 

whose CEO owns 99 percent of its 

shares. 

13. Like most other broiler chicken 

processors, Koch is vertically integrated. 

This means the company controls most 

steps in the production of chicken meat, 

from hatching chicks to slaughtering 

and packaging broiler chickens to be 

consumed in homes, restaurants, and 

other venues. One important exception, 

however, is that Koch (like other major 

processors) pays independent farmers to 

raise its broiler chickens for delivery to 

Koch’s processing plants. By 

outsourcing chicken growing, Koch 

shifts the substantial cost, capital 

requirements, and risk to small poultry 

farmers. Farmers who build chicken 

houses to raise chickens for Koch bear 

the risks of their investment, including 

risks of weather damage, such as 

tornados or floods. Outsourcing chicken 

growing also allows Koch to avoid the 

burden and costs associated with 

employing farmers. 

14. Koch, like other processors, 

provides chicks and feed to its broiler 

farmers and pays farmers only for the 

service of growing chickens. To reduce 

transportation costs for feed and 

chickens, and to limit injury or death to 

chickens during transport, most 

processors contract with farmers located 

near each processing complex. 

15. Once broiler chickens reach their 

target weight, Koch collects and trucks 

them to a processing plant, where Koch 

slaughters and packs them for 

distribution. A farmer providing broiler 

services for Koch gets paid only when 

a flock is brought to slaughter. The 

farmer’s pay depends on the weight of 

the broiler chickens collected from the 

farmer, the farmer’s ‘‘feed-conversion 

ratio’’ (that is, the weight of feed 

consumed by broiler chickens to their 

full-grown weight) relative to other local 

Koch-contracted farmers, and various 

other adjustments for items such as for 

fuel costs, litter control, and pest 

control. 

16. Koch operates eight poultry 

processing complexes: two in Tennessee 

(Morristown and Chattanooga), four in 

Alabama (Ashland, Montgomery, 

Collinsville and Gadsden), one in 

Georgia (Pine Mountain Valley), and 

one in Mississippi (Morton). 

17. Each of Koch’s eight complexes 

enters into contracts with independent 

farmers to provide growing services. In 

total, more than 800 farmers grow 

broiler chickens for Koch. The duration 

of Koch’s contractual commitment does 

not usually exceed five years. Many of 

these farmers operate small family 

farms. Koch does not allow broiler 

farmers in any way to own, maintain or 

care for any competitor’s birds of any 

kind anywhere—even on property that 

is not used to grow chickens for Koch. 

B. Broiler Houses Are Large, DebtFinanced Capital Investments 

18. To operate at a scale sufficient to 

grow broilers for a major processor like 

Koch, a contract farmer typically needs 

two to four modern broiler houses. 

These houses are large: Koch specifies 

that new broiler houses should 

generally be 66 feet wide by 600 feet 

long, nearly the length of two football 

fields. 

19. Each modern broiler house costs 

approximately $500,000 to build. Most 

farmers must take out loans to fund 90 

percent or more of this cost. Many 

chicken farmers operate as small, highly 

leveraged family farms, and bank debt 

repayment is their largest expense. 

20. Koch typically provides a 

prospective farmer with the required 

specifications for the houses and a 

simple pro forma cash-flow statement, 

or ‘‘payback analysis,’’ showing the 

farmer’s projected total gross pay before 

debt service and other operating 

expenses. Koch then notifies a local 

lender, either by a commitment letter or 

through informal means, that Koch 

considers the prospective farmer 

acceptable and that Koch is prepared to 

place flocks with the farmer upon the 

completion of the broiler housing. 

21. A lender will generally evaluate 

the farmer’s projected cash flow based 

on the standard-form Koch contract, 

with the understanding that Koch will 

require the farmer to sign the contract 

without amendment after the houses are 

built. The lender generally conditions a 

loan for new-house construction on a 

farmer’s willingness to execute the Koch 

standard contract ‘‘as is’’ once the new 

broiler houses are ready to receive their 

first flocks. Most loans for broiler 

houses span 10 or 15 years, while some 

are longer. As a practical matter, Koch 

offers contracts to farmers on a ‘‘take-itor-leave-it’’ basis, and a prospective 


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farmer typically has no opportunity to 

negotiate the compensation terms of a 

Koch contract. 

22. Under its grower contracts, Koch 

determines a farmer’s compensation for 

a flock after it arrives at a Koch 

processing plant and is weighed. Before 

disbursing payment, however, Koch 

deducts a farmer’s loan payment, which 

it remits directly to the lender, as 

required by the farmer’s loan agreement. 

23. Koch wields enormous leverage 

over the farmers who grow its broiler 

chickens. Indebted farmers generally 

need at least six flocks each year to stay 

current on their broiler-house loans, yet 

Koch decides the number of flocks to 

allot to each farmer. If Koch elects not 

to renew a farmer’s contract, or merely 

reduces the number of flocks placed per 

year, many farmers would be unable to 

make their loan repayments. Koch also 

controls other factors that can 

significantly affect farmer 

compensation, such as the number and 

quality of chicks provided, the type of 

feed, the timing of when flocks are 

collected, the use of antibiotics, and 

various payment adjustments. 

24. The only realistic way for farmers 

to repay their loans for newly 

constructed broiler houses is by growing 

broiler chickens. Once built, broiler 

houses cannot be relocated, and farmers 

can raise chickens only for processors 

that are both nearby and willing to 

accept new farmers. Farmers know that 

their farm is just one among many 

nearby, and none is an irreplaceable 

supplier of broiler services for Koch or 

any other processor. 

C. Koch Introduces the Exit Penalty To 

Stifle Competition 

25. Almost all Koch-contracted 

farmers reside near enough to the 

complex of at least one other processor 

to raise broilers for that processor, so 

there is potential competition for their 

broiler growing services. 

26. In 2014, Koch introduced the exit 

penalty provision into its grower 

contracts—a new policy designed to 

weaken competition between Koch and 

other processors for broiler farmers’ 

services by stymieing its farmers’ ability 

to switch to Koch’s competitors. 

27. Part of a farmer’s compensation is 

a per-flock payment that Koch calls a 

‘‘New House Incentive.’’ If the farmer 

switches to one of Koch’s competitors in 

the next 10 years, the grower must pay 

an exit penalty: 

If [farmer] elects to terminate the Poultry 

Production Agreement during the ten (10) 

year time period applicable to this NEW 

HOUSE INCENTIVE AGREEMENT, then 

[farmer] shall refund Company, within 90 

days of its notice of termination to Company, 

any payments made by Company within the 

preceding 12 months under this NEW 

HOUSE INCENTIVE AGREEMENT, and no 

additional amounts shall be owed by 

Company under this NEW HOUSE 

INCENTIVE AGREEMENT. 

28. The fixed per-flock payment is 

roughly $2,000 per modern (‘‘Class A’’) 

house. For an average farm of two or 

four houses, each of which receives six 

or seven flocks a year, the exit penalty 

over a year would be $24,000 to 

$56,000. This obligation to ‘‘refund . . . 

any payments’’ made by Koch under the 

‘‘new house incentive’’ agreement ‘‘for 

the preceding 12 months’’ means that 

the exit penalty represents for most 

farmers at least half—and for some 

farmers up to 100 percent or more—of 

their annual take-home income after 

paying bank debt and operating costs. 

29. The exit penalty implemented at 

Koch’s complex in Montgomery, 

Alabama is even more burdensome. 

Koch charges Montgomery-area farmers 

an exit penalty equal to the ‘‘new house 

incentive’’ paid in all years prior to 

termination, rather than the amount 

paid in the preceding 12 months: 

If [farmer] elects to terminate the 

Production Agreement at any time prior 

during the ten (10) year time period 

applicable to the NEW HOUSE INCENTIVE, 

then [farmer] shall refund to COMPANY, 

within ninety (90) days of its notice of 

termination to COMPANY, all payments 

received under this NEW HOUSE 

INCENTIVE AGREEMENT. 

Under this provision, a farmer with, 

say, four houses who received new 

house incentive payments for seven 

years would likely have to pay over 

$300,000 to switch from Koch to a 

competing processor. 

30. As the percentage of Koch broiler 

farmers with qualifying houses has 

steadily increased, more farmers have 

become subject to the exit penalty. For 

example, by the end of 2017, the farmers 

providing more than half of the total 

square footage of broiler housing for 

Koch’s Gadsden, Alabama complex 

were subject to the exit penalty. 

31. Koch also includes exit penalties 

in at least some of its contracts with 

breeder-hen farmers and pullet farmers. 

32. In rolling out the ‘‘new house 

incentive,’’ Koch has sought out 

prospective farmers who are young, 

financially insecure, less familiar with 

the growing business, and short on 

collateral—making them more inclined 

to accept 90 or 100 percent financing 

from lenders. Koch understands that, for 

these prospective farmers, the decision 

to build new houses is based largely on 

the potential cash flow. Koch generally 

shows prospective farmers a ‘‘payback 

analysis’’ predicated on raising 6.5 

flocks each year (that is, alternating 

between six and seven flocks per year), 

though Koch is not obligated by its 

contracts to deliver that many flocks. 

33. Once the new houses are built, 

however, Koch can choose to deliver 

fewer than six flocks or deliver flocks 

that are smaller than Koch has 

projected. Many broiler-house loans are 

structured to be repaid through six flock 

settlements in a year; a farmer who 

receives fewer than six flocks frequently 

incurs negative cash flow and the 

prospect of default. 

34. Koch has failed to inform some 

farmers of the exit penalty until the 

farmer has signed a loan for the new 

housing with the bank, drawn down the 

loan, and completed the construction of 

the new broiler houses. Koch’s typical 

sample payback analysis is a pro forma 

cash flow statement that does not 

mention the exit penalty. 

35. When a farmer finally has the 

opportunity to sign the lengthy broilerservices contract, the exit penalty is 

non-negotiable, and farmers have little 

choice but to accept Koch’s terms given 

their impending loan payments. As a 

practical matter, it is impossible for 

farmers to choose not to work for Koch 

without defaulting on their bank loans. 

36. Prospective farmers must trust 

Koch to provide reasonable contract 

terms when the farmer eventually 

receives (and signs) the Koch broiler 

production contract. 

37. Even if farmers did receive proper 

notice and understood the exit penalty 

provision, the exit penalty would still 

serve as an unreasonable burden on 

switching. 

38. The so-called ‘‘new house 

incentive’’ and concomitant exit penalty 

originally only applied for the first 10 

years that the chicken farmer stayed 

with Koch. Within the past two years, 

however, Koch’s new contracts extend 

the supplemental payments and exit 

penalty for the first 15 years that the 

farmer stays with Koch. Koch has also 

extended the supplemental payments 

and exit penalty to 15 years for at least 

some farmers who were subject to the 

original 10-year exit penalty obligation. 

39. Koch’s exit penalty makes it 

harder for farmers to switch from Koch 

to competing processors. As a result, 

Koch need not compete as vigorously to 

retain farmers as it would absent the 

exit penalty. In effect, the exit penalty 

functions as a non-compete clause that 

curtails farmers’ ability to switch to 

competitors that might offer greater 

compensation or otherwise superior 

contract terms. 


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D. No Legitimate Purpose Justifies the 

Exit Penalty 

40. Although Koch adopted the exit 

penalty as part of its ‘‘new house 

incentive’’ program, Koch does not 

advance any funds to farmers to build 

new houses as part of the program. 

Instead, Koch expects farmers to pay for 

new houses by taking out their own 

loans on their own credit. Nor does the 

exit penalty serve to recoup costs that 

Koch has expended on special training 

for farmers or to protect Koch against 

the risk that any trade secrets or special 

know-how might be shared with another 

processor if a farmer stopped growing 

for Koch. 

41. The ‘‘new house incentive’’ 

program has been profitable to Koch 

from the very first flock even without 

any exit penalty. With each flock, Koch 

saves money on feed from the improved 

quality of new broiler housing. These 

savings far exceed the ‘‘new house 

incentive’’ payments to farmers. 

42. Before adopting the ‘‘new house 

incentive’’ in 2014, Koch senior 

executives verified that ‘‘[t]he incentive 

will pay for itself with better 

performance,’’ without any exit penalty. 

A senior employee in the Koch finance 

department provided Koch executives 

with a detailed analysis showing that 

only a slight improvement in the feed 

conversion ratio would allow Koch to 

break even on its ‘‘new house incentive’’ 

payments. Koch’s executives responded 

that the program ‘‘would seem to be a 

no brainer,’’ especially considering that 

the ‘‘improvement should be a lot 

higher than that.’’ 

43. Koch analyses in 2016 and 2017 

confirmed that the ‘‘new house 

incentive’’ has paid for itself many 

times over without any exit penalty. The 

analyses showed that new houses 

provided cost savings to Koch more 

than seven times greater than the extra 

payments that Koch paid to farmers. In 

each year since Koch implemented the 

‘‘new house incentive,’’ Koch has saved 

millions of dollars. For example, by the 

end of 2016, less than two years after 

first imposing the exit penalty in its 

contracts, Koch determined that it had 

already enjoyed cost savings of many 

times the amount that it had paid to 

farmers as ‘‘new house incentives.’’ 

E. Koch Enforces Its Exit Penalty When 

Farmers Seek To Switch to Competing 

Processors and Sues Farmers Who Do 

Not Pay 

44. Koch actively enforces its exit 

penalty to deter farmers from switching 

to competing processors. Koch has 

demanded exit penalties from at least 14 

farmers—including 13 from broiler 

chicken farmers and one from a breeder 

farmer—and filed nearly a dozen 

lawsuits over the past three years 

against farmers who attempted to switch 

processors. Some farmers returned to 

Koch rather than face litigation, while 

others declined to pursue a switch 

because the exit penalty would be too 

onerous. 

45. Since at least May 2020, Koch has 

sent letters demanding the exit penalty 

from farmers who gave notice of their 

intention to switch to another processor. 

46. In November 2020, Koch began 

suing farmers to collect the exit penalty. 

Koch sued one married couple for a 

total of $95,040; another farmer for 

$55,440; and yet another for $27,720. 

Since November 2020, Koch has 

demanded comparable exit penalties 

from at least nine other farmers. Some 

of these farmers returned to Koch rather 

than pay the exit penalty or bear the 

costs of litigation. 

47. One farmer who had earned less 

than $4,000 in ‘‘new house incentive’’ 

payments received a demand from Koch 

for seven times the amount actually due 

under the exit penalty provision. The 

farmer managed to pay a lesser amount 

only after litigating the issue. 

48. For all of these farmers, the exit 

penalty was substantial compared to 

their earnings after deducting loan 

payments and other costs of operating 

their farms. 

49. Koch’s highly visible efforts to 

collect its exit penalties have deterred 

farmers who might otherwise avail 

themselves of competition between 

Koch and other processors to obtain 

better compensation for themselves and 

their families. Koch’s exit penalty is 

unfair and unreasonably harms 

competition for broiler farmer growing 

services. 

III. Relevant Markets and Market 

Power 

50. The relevant markets are the 

purchases of broiler growing services in 

the locations encompassing each Koch 

poultry processing facility and the rival 

processors with which it competes. 

A. The Market for the Purchase of 

Broiler Growing Services 

51. The purchase of broiler growing 

services by chicken processors is a 

relevant product market under the 

Sherman Act. 

52. Broiler farmers own the facilities 

required to raise broiler chickens, which 

are typically financed by loans made 

directly to the farmers. Broiler farmers 

use houses designed specifically for 

growing broiler chickens that cannot be 

repurposed for other agricultural 

operations without significant cost. 

53. Broiler farmers take financial risk 

and invest their labor and capital in 

building and operating a specialized 

farming service. Broiler farmers cannot 

switch to producing other agricultural 

products in sufficient numbers to render 

unprofitable a small but significant 

decrease in price (compensation) by a 

hypothetical monopsonist. Nor would 

farmers likely abandon their 

investments and credit obligations to 

take up alternate employment. 

54. To become growers, farmers must 

borrow considerable amounts of money 

and invest time building chicken 

houses. 

B. The Relevant Geographic Markets Are 

the Areas Around the Locations of Each 

Koch Poultry Processing Facility and Its 

Rival Processors 

55. Processors require sufficient 

growers to supply their processing 

complexes. Processors typically pay for 

the chickens’ transportation, feed, 

veterinary care, and collection. The cost 

and risk of transporting feed and 

chickens limit the area in which 

processors can contract with broiler 

farmers. The geographic radius within 

which a processor can economically 

contract with farmers for chicken 

growing services constitutes its ‘‘draw 

area.’’ 

56. Although there may be some 

processor-specific requirements, topquality chicken housing that satisfies 

one processor’s requirements is often 

acceptable to other processors in the 

area. Farmers with top-quality housing 

may be able to improve their 

compensation by switching processors, 

depending on competitive conditions in 

the relevant market. A processor 

competes with a Koch complex for 

chicken growing services if the draw 

area of one or more of its complexes 

overlaps significantly with Koch’s draw 

area. 

57. For each Koch complex that 

competes with one or more rival 

processors, the relevant geographic 

market is the area around the Koch 

complex and its set of competing 

processors. Koch contracts with a 

significant share of the broiler farmers 

within the geographic market of each 

Koch complex. 


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C. Koch Has Market Power in Each 

Relevant Market 

58. Koch contracts with a significant 

share of the broiler farmers who contract 

to deliver broiler growing services to 

processors within the draw area of each 

Koch complex. 

59. Most Koch farmers have a few 

alternative processors with which to 

contract. Nearly all Koch farmers are 

within the draw area of at least one 

competitor’s complex. Over 80 percent 

of Koch farmers are located within the 

draw areas of the complexes of at least 

two of Koch’s competitors. More than 

half of the farmers who provide their 

services to Koch are located within the 

draw areas of the complexes of three or 

more of Koch’s competitors. 

60. Each Koch complex competes 

with one or more rival processors to 

sign up farmers who deliver growing 

services within their overlapping draw 

areas. But the Koch exit penalty 

artificially raises the cost to farmers to 

switch from Koch to a competitor. 

Because Koch contracts with a 

significant share of the farmers under 

contract with processors in each 

complex’s geographic market, these 

switching costs significantly lessen 

competition in those markets. 

61. Koch’s market share and ability to 

impose and enforce the termination 

penalty clause establish that Koch has 

market power in the relevant markets. 

IV. Jurisdiction, Venue, and Commerce 

62. The United States brings this 

action pursuant to section 404(a) of the 

Packers and Stockyards Act, 7 U.S.C. 

224, upon the referral by the Secretary 

of the United States Department of 

Agriculture, and under section 1 of the 

Sherman Act, 15 U.S.C. 1, to protect the 

farmers of the United States and to 

restore competition in the market for 

broiler growing services. 

63. Koch is a privately held 

corporation headquartered in Park 

Ridge, Illinois, with live poultry 

operations in Alabama, Georgia, 

Mississippi, and Tennessee. Koch 

complexes enter into broiler services 

contracts with farmers located in 

multiple states, and Koch’s chicken 

products are sold to customers in many 

states. Koch is engaged in interstate 

commerce and activities that 

substantially affect interstate commerce. 

64. The Court has subject matter 

jurisdiction under 28 U.S.C. 1331, 1337, 

and 1345, as well as 7 U.S.C. 224, to 

prevent and restrain Koch from 

violating section 202(a) of the Packers 

and Stockyards Act. 

65. The Court has subject matter 

jurisdiction under 28 U.S.C. 1331, 1337, 

and 1345 as well as section 4 of the 

Sherman Act, 15 U.S.C. 4, to prevent 

and restrain Koch from violating section 

1 of the Sherman Act, 15 U.S.C. 1. 

66. The Court has personal 

jurisdiction over Koch under section 12 

of the Clayton Act, 15 U.S.C. 22. 

67. Venue is proper in this judicial 

district under section 12 of the Clayton 

Act, 15 U.S.C. 22, and 28 U.S.C. 

1391(b)–(c), because Koch transacted 

business, was found, and resided in this 

district; a substantial part of the events 

giving rise to the United States’ claim 

arose in this district; and a substantial 

portion of the affected interstate trade 

and commerce described herein has 

been carried out in this district. 

V. Violations Alleged 

Count I 

(Violation of Section 202(a) of the 

Packers and Stockyards Act) 

68. The United States repeats and 

realleges paragraphs 1 through 67 as if 

fully set forth herein. 

69. Koch, with its subsidiaries, is a 

‘‘live poultry dealer’’ under 7 U.S.C. 

182(10), because it is engaged in the 

business of obtaining live poultry under 

a poultry growing arrangement for the 

purpose of slaughtering and processing 

poultry. 

70. Koch’s contracts with chicken 

farmers concern ‘‘live poultry’’ under 7 

U.S.C. 182(6), 192, because the contracts 

pertain to the raising of chickens for 

slaughter. 

71. Koch’s exit penalty is an ‘‘unfair 

. . . practice or device,’’ in violation of 

section 202(a) of the Packers and 

Stockyards Act, 7 U.S.C. 192(a). First, 

farmers cannot reasonably avoid the exit 

penalty. Lenders’ anticipated cash flow 

analyses are based on the assumption 

that farmers’ compensation for each 

flock will include the ‘‘new house 

incentive.’’ Koch makes the exit penalty 

a condition of receiving the ‘‘new house 

incentive.’’ Farmers are required to 

accept the exit penalty as part of the 

Koch contract. Koch sometimes even 

fails to disclose the exit penalty before 

the farmer takes out a loan to build new 

broiler houses. 

72. Second, the exit penalty 

substantially harms farmers by 

curtailing their ability to switch and, 

accordingly, pursue better wages and 

working conditions. Once built, chicken 

houses cannot be repurposed without 

significant expense, and the out-ofpocket cost of paying the exit penalty is 

prohibitive for most farmers. The 

prospect of paying Koch at least 50 

percent (and, for some, 100 percent or 

more) of the farmer’s annual take-home 

pay restrains the farmer from switching 

to a Koch competitor, even when the 

competing processor offers higher 

compensation or otherwise better 

contract terms. Koch’s illegal conduct 

has imposed substantial costs on 

farmers seeking to switch processors 

and deprived farmers of the benefits of 

competition for their services. 

73. Third, any purported benefit to 

Koch from the exit penalty does not 

outweigh the harm inflicted on farmers. 

The exit penalty does not recoup any 

upfront capital expenditure by Koch; 

farmers bear all the financial and 

operational risk of building new broiler 

houses. The efficiencies derived from 

new housing make Koch’s ‘‘new house 

incentive’’ payments to farmers 

profitable for Koch from the very first 

flock. The exit fee thus simply insulates 

Koch from competition with other 

processors for farmers’ services. 

74. Koch’s unfair and deceptive 

practices are ongoing and likely to 

continue and recur unless the Court 

grants the requested relief. 

Count II 

(Violation of Section 202(a) of the 

Packers and Stockyards Act and 9 CFR 

201.100(h)(2)) 

75. The United States repeats and 

realleges paragraphs 1 through 74 as if 

fully set forth herein. 

76. Pursuant to 9 CFR 201.100(h)(2), 

chicken farmers have the right to 

terminate their poultry growing 

arrangement with at least 90 days’ prior 

written notice. 

77. The Koch exit penalty provision 

unreasonably burdens farmers’ right 

under 9 CFR 201.100(h)(2) to terminate 

the Koch production contract. 

78. Koch’s illegal conduct has 

imposed substantial costs on farmers 

seeking to switch and deprived farmers 

of the benefits of competition for their 

services. 

79. Koch’s conduct will likely 

continue and recur unless this Court 

grants the requested relief. 

Count III 

(Violation of Section 1 of the Sherman 

Act) 

80. The United States repeats and 

realleges paragraphs 1 through 79 as if 

fully set forth herein. 

81. The exit penalty provisions in 

Koch’s contracts with farmers had the 

purpose and likely effect of 

unreasonably restraining interstate trade 

and commerce in the relevant markets, 

within the meaning of section 1 of the 

Sherman Act, 15 U.S.C. 1. 

82. Koch’s illegal conduct has 

imposed substantial costs on farmers 

seeking to switch and deprived farmers 


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of the benefits of competition for their 

services, including their compensation. 

Koch’s illegal conduct has also reduced 

competition in the market for broiler 

services, which likely undercuts other 

processors’ ability to hire and the 

compensation of farmers who do not 

contract with Koch. 

83. Koch’s conduct will likely 

continue and recur unless this Court 

grants the requested relief. 

Requested Relief 

The United States requests that this 

Court: 

a. adjudge that the Koch exit penalty 

provision in its contracts with farmers is 

an unfair and deceptive practice or 

device in violation of section 202(a) of 

the Packers and Stockyards Act, 7 

U.S.C. 192(a); 

b. adjudge that the Koch exit penalty 

provision in its contracts with farmers is 

an unfair and deceptive practice or 

device in that it unreasonably burdens 

the right of farmers to terminate their 

‘‘poultry growing arrangement’’ with 

Koch on 90-days’ notice, in violation of 

9 CFR 201.100(h); 

c. adjudge that the Koch exit penalty 

provision in its contracts with farmers 

unreasonably restrains trade and 

commerce and therefore is unlawful 

under section 1 of the Sherman Act, 15 

U.S.C. 1; 

d. permanently enjoin and restrain 

Koch from demanding payment of the 

exit penalty or otherwise enforcing the 

exit penalty provision; 

e. enjoin Koch from including any 

exit penalty or substantially similar 

provision in its agreements with 

farmers; 

f. require that Koch promptly give 

notice to all farmers with Koch contracts 

that contain an exit penalty provision 

that the exit penalty provision is 

unenforceable and void; 

g. require Koch to take such internal 

measures as are necessary to ensure 

compliance with any injunction; 

h. grant equitable monetary relief by 

refunding to all affected farmers any 

funds collected by Koch pursuant to the 

exit penalty provision, including any 

funds collected in a settlement or other 

resolution of a claim by Koch seeking to 

enforce the exit penalty provision, and 

all attorneys’ fees and costs incurred in 

defending against Koch’s collection 

efforts; 

i. grant any other relief as required by 

the nature of this case and as is just and 

proper to prevent the recurrence of the 

alleged violation and to reverse its 

anticompetitive effects; and 

j. award the United States the costs of 

this action and any other relief that the 

Court may deem just and proper. 

Dated: November 9, 2023. 

Respectfully submitted, 

For Plaintiff United States of America 

/s/ lllllllllllllllllll

Jonathan S. Kanter, 

Assistant Attorney General for Antitrust. 

/s/ lllllllllllllllllll

Doha Mekki, 

Principal Deputy Assistant Attorney General 

for Antitrust. 

/s/ lllllllllllllllllll

Michael B. Kades, 

Deputy Assistant Attorney General for 

Antitrust. 

/s/ lllllllllllllllllll

Brian R. Young, 

Acting Director of Litigation. 

/s/ lllllllllllllllllll

Ryan Danks, 

Director of Civil Enforcement. 

/s/ lllllllllllllllllll

Miriam R. Vishio, 

Deputy Director of Civil Enforcement. 

/s/ lllllllllllllllllll

Daniel S. Guarnera, 

Chief, Civil Conduct Task Force. 

/s/ lllllllllllllllllll

Kate M. Riggs, 

Acting Assistant Chief, Civil Conduct Task 

Force. 

/s/ lllllllllllllllllll

Eun-Ha Kim, 

Mark H.M. Sosnowsky, 

Senior Litigation Counsel. 

/s/ lllllllllllllllllll

Jack G. Lerner, 

Peter Nelson, 

Trial Attorneys, United States Department of 

Justice Antitrust Division, Civil Conduct 

Task Force, 450 Fifth Street NW, Suite 8600, 

Washington, DC 20530, Telephone: 202–227– 

9295, Fax: 202–616–2441, Email: 

Jack.Lerner@usdoj.gov. 

United States District Court for the 

Northern District of Illinois Eastern 

Division 

United States of America, 450 Fifth Street 

NW, Washington, DC 20530, Plaintiff, v. 

Koch Foods Incorporated, 1300 W Higgins 

Road, Suite 100, Park Ridge, IL 60068, 

Defendant. 

Case No. 1:23–cv–15813 

Judge John F. Kness 

Proposed Final Judgment 

Whereas, Plaintiff, the United States 

of America, filed its Complaint on 

November 9, 2023, alleging that 

Defendant Koch Foods Incorporated 

violated section 1 of the Sherman Act, 

15 U.S.C. 1, and section 202(a) of the 

Packers and Stockyards Act, 7 U.S.C. 

192(a); 

And whereas, the United States and 

Defendant have consented to the entry 

of this Final Judgment without the 

taking of testimony, without trial or 

adjudication of any issue of fact or law, 

and without this Final Judgment 

constituting any evidence against or 

admission by any party relating to any 

issue of fact or law; 

And whereas, Defendant agrees to 

undertake certain actions and refrain 

from certain conduct for the purpose of 

resolving the claims alleged in the 

Complaint; 

And whereas, Defendant agrees that 

the relief required by this Final 

Judgment can and will be made and that 

Defendant will not later raise a claim of 

hardship or difficulty as grounds for 

asking the Court to modify any 

provision of this Final Judgment. 

Now therefore, it is ordered, adjudged, 

and decreed: 

I. Jurisdiction 

The Court has jurisdiction over 

Defendant and the subject matter of this 

action. The Complaint states claims 

upon which relief may be granted 

against Defendant under sections 202(a) 

and 404 of the Packers and Stockyards 

Act, 7 U.S.C. 192(a), 224, and section 1 

of the Sherman Act, 15 U.S.C. 1. 

II. Definitions 

As used in this Final Judgment: 

A. The ‘‘Antitrust Division’’ means 

the Antitrust Division of the United 

States Department of Justice. 

B. ‘‘Defendant’’ and ‘‘Koch’’ mean 

Defendant Koch Foods Incorporated, an 

Illinois corporation with its 

headquarters in Park Ridge, Illinois, its 

successors, assigns, subsidiaries, 

divisions, groups, affiliates, 

partnerships, and joint ventures, and its 

and their owners, operators, directors, 

officers, managers, agents, 

representatives, and employees. 

C. ‘‘Dispute Resolution Process’’ 

means the process that is the sole means 

for Koch to dispute a Request for 

Payment in whole or in part. To invoke 

the Dispute Resolution Process, within 

14 calendar days of receipt of the 

disputed Request for Payment, Koch 

must: (i) notify the Independent Poultry 

Grower of the dispute, (ii) explain the 

basis for Koch’s dispute to the 

Independent Poultry Grower in writing, 

and (iii) submit the dispute to the 

Antitrust Division in writing, attaching 

a copy of Koch’s written notification to 

the Independent Poultry Grower. If 

Koch fulfills these requirements, the 

Antitrust Division will in its sole 

discretion identify three proposed 

independent referees, each of whom 

must be a licensed attorney, to resolve 

the dispute, give the Independent 

Poultry Grower and Koch five business 

days to strike one proposed referee each, 

and, at the conclusion of that five-day 

period, either name the remaining 

proposed referee as the referee or, if 

more than one of the proposed referees 


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2For example and without limitation, a 

Termination Payment Obligation includes any 

provision in a Live Poultry Agreement in 

substantially the following form: 

If [Independent Poultry Grower] elects to 

terminate the [Live Poultry Agreement] during the 

. . . [time period applicable to this New House 

Incentive Agreement/New House Payment Period], 

then [Independent Poultry Grower] shall refund 

Company, within ninety (90) days of its notice of 

termination to Company, [any/all] payments made 

by Company [during the previous 12 months] under 

this . . . . New House [Incentive/Payment] 

Agreement . . . . 

have not been struck, select the referee 

from among the remaining proposed 

referees. Koch will bear all fees and 

costs of the referee regardless of the 

outcome of the Dispute Resolution 

Process. The referee will determine 

whether a hearing is required to resolve 

the dispute. Koch must provide the 

Antitrust Division with all documents 

and information related to the referee 

proceeding, including any submissions 

to or communications with the referee, 

and the Antitrust Division will have the 

right to attend hearings, if any, in the 

referee proceeding and to access any 

transcripts or recordings of such 

hearings. If the referee so requests, Koch 

agrees to waive any applicable 

confidentiality protections for 

documents, information, and other 

material Koch provided to the Antitrust 

Division in connection with the 

investigation or litigation of this action, 

whether directly or through a productsof-discovery Civil Investigative Demand 

to another party in litigation with 

Defendant, solely for the purpose of 

allowing the Antitrust Division to share 

information with the referee. The 

referee’s decision must be final, binding 

on Koch and Independent Poultry 

Grower, and enforceable by the 

Antitrust Division or the Independent 

Poultry Grower through this Court’s 

contempt power under this Final 

Judgment. Any objection or challenge to 

or appeal of the referee’s decision may 

be made only in this case and must be 

subject to the procedures and standards 

of review set forth in Federal Rule of 

Civil Procedure 53(f), except that all 

factual findings must be reviewed only 

for clear error. In such case, the making 

of this Final Judgment must be without 

prejudice to either the Independent 

Poultry Grower or Koch in any dispute 

over any Request for Payment. Provided, 

however, that the Independent Poultry 

Grower may opt out of the referee 

proceeding at any time prior to a 

determination of the dispute by the 

referee. 

D. ‘‘Including’’ means including, but 

not limited to. 

E. ‘‘Independent Poultry Grower’’ 

means any Person who has entered into 

a Live Poultry Agreement, including a 

poultry grower within the meaning of 

section 2(a)(8) of the Packers and 

Stockyards Act, 7 U.S.C. 182(8). 

F. ‘‘Live Poultry Agreement’’ means 

any formal or informal agreement or 

understanding, and any amendment, 

addendum or renewal of any such 

agreement or understanding, for the 

services of an Independent Poultry 

Grower who raises, grows, or cares for 

live chickens (including pullets, breeder 

chickens, by-product chickens, and 

broilers), including under a poultry 

growing arrangement within the 

meaning of section 2(a)(9) of the Packers 

and Stockyards Act, 7 U.S.C. 182(9). 

G. ‘‘Loan Agreement’’ means an 

agreement in which the Defendant pays 

a sum of money to or on behalf of an 

Independent Poultry Grower where the 

agreement (i) has an original term of five 

years or less and has not been extended 

prior to acceleration of the loan by a 

Termination, (ii) provides that the loan 

will be forgiven or repaid pro rata 

annually or more frequently during the 

original term, with only the outstanding 

balance of the original loan accelerated 

and payable upon Termination, (iii) 

does not impose additional charges for 

prepayment or Termination, such as a 

prepayment penalty; (iv) does not 

provide for the payment of interest on 

the loan, (v) is for the purpose of 

facilitating the construction or 

improvement of one or more poultry 

houses and/or ancillary facilities, 

including the purchase of related real 

estate and/or the purchase and 

installation of related equipment, and 

where the value of the poultry houses 

and/or ancillary facilities, including any 

related real estate and/or related 

equipment, is projected, at the time of 

the agreement, to meet or exceed the 

amount of any payment due as a result 

of the Independent Poultry Grower 

initiating a Termination of a Live 

Poultry Agreement with Defendant, and 

(vi) does not violate the antitrust laws 

or the Packers and Stockyards Act. 

H. ‘‘Person’’ means any natural 

person, corporation, firm, company, sole 

proprietorship, partnership, joint 

venture, association, institution, 

governmental unit, or other legal entity. 

I. ‘‘Poultry Processor’’ means any 

person engaged in the business of 

obtaining live poultry by purchase or 

under a Live Poultry Agreement, 

including a live poultry dealer within 

the meaning of section 2(a)(10) of the 

Packers and Stockyards Act, 7 U.S.C. 

182(10). 

J. ‘‘PSD’’ means the Packers and 

Stockyards Division of the Agricultural 

Marketing Service, United States 

Department of Agriculture (‘‘USDA’’) 

and, in the future, any agency within 

USDA that becomes responsible for live 

poultry matters under the Packers and 

Stockyards Act that are currently the 

responsibility of PSD. 

K. ‘‘Recoverable Legal Costs’’ means 

all costs that an Independent Poultry 

Grower has paid or incurred for legal 

services or court costs in connection 

with any effort by Defendant to collect 

a Termination Payment or enforce a 

Termination Payment Obligation. 

Provided, however, that Recoverable 

Legal Costs do not include any costs 

that were advanced, paid, or reimbursed 

for an Independent Poultry Grower by 

or on behalf of a Poultry Processor, or 

its agent, representative, or affiliate. 

L. ‘‘Request for Payment’’ means a 

written statement, affirmed under 

penalty of perjury, from an Independent 

Poultry Grower that (i) requests 

payment of any Termination Payment or 

Recoverable Legal Costs and states that 

none of the requested amount was 

advanced, paid, or reimbursed by or on 

behalf of a Poultry Processor, or its 

agent, representative, or affiliate; and (ii) 

attaches invoices or other documents 

that demonstrate the requested payment 

amounts were incurred. 

M. ‘‘Termination’’ means termination, 

cancellation, non-renewal, or expiration 

and subsequent non-replacement of a 

Live Poultry Agreement. 

N. ‘‘Termination Payment’’ means 

anything of value (including money, 

goods, or services) that an Independent 

Poultry Grower is required to pay or 

provide to Defendant or any other 

person as a result of a Termination. 

Provided, however, that Termination 

Payments do not include: (a) the return 

or relinquishment of possession of 

personal property owned by Defendant 

such as chickens, medicines, and feed, 

or any payment of damages, if otherwise 

permitted under the Live Poultry 

Agreement, to Defendant based on the 

Independent Poultry Grower’s 

conversion, abandonment, or 

destruction of, or actual or imminent 

harm to, personal property owned by 

Defendant, or (b) payments under a 

Loan Agreement. 

O. ‘‘Termination Payment Obligation’’ 

means any obligation or commitment of 

an Independent Poultry Grower to make 

a Termination Payment.2

III. Applicability 

This Final Judgment applies to 

Defendant and all other persons in 

active concert or participation with 

Defendant who receive actual notice of 

this Final Judgment. 

IV. Prohibited Conduct 

Defendant must not: 


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A. Demand, request, collect, or accept 

any Termination Payment; 

B. Take any steps, including through 

litigation or the threat of litigation, to 

demand, request, collect, or accept any 

Termination Payment or to enforce any 

Termination Payment Obligation; 

C. Include a Termination Payment 

Obligation in any Live Poultry 

Agreement; or 

D. Directly or indirectly, including 

through any third party, engage in, 

encourage, or support any retaliation 

against, or any intimidation or 

harassment of, any Independent Poultry 

Grower who is or was a party or witness 

to any dispute or litigation relating to a 

Termination Payment or Termination 

Payment Obligation or who cooperates 

or has cooperated with PSD or the 

Antitrust Division with respect to any 

investigation of Defendant’s conduct 

relating to Termination Payments or 

Termination Payment Obligations. 

V. Required Conduct 

A. Within 30 calendar days of entry 

of this Final Judgment, Defendant must: 

1. Repay all Termination Payments 

that Defendant has received and has 

identified to PSD and the Antitrust 

Division as of the date of entry of this 

Final Judgment; 

2. Send a written notice, in the form 

attached as Appendix 1 by regular U.S. 

mail in an envelope marked from 

Defendant and with the notice 

conspicuously on the front, ‘‘LEGAL 

MAIL—IMPORTANT NOTICE’’ in no 

less than 26 point type, and, for each 

Independent Poultry Grower for whom 

Defendant has an email address, by 

email with the subject line 

‘‘IMPORTANT LEGAL NOTICE FROM 

KOCH FOODS, INC.,’’ to the last known 

postal and email addresses of each 

Independent Poultry Grower providing 

services to Defendant under a Live 

Poultry Agreement that contains a 

Termination Payment Obligation; and 

3. Send a written notice, in the form 

attached as Appendix 2 by regular U.S. 

mail in an envelope marked from 

Defendant and with the notice 

conspicuously on the front, ‘‘LEGAL 

MAIL—IMPORTANT NOTICE’’ in no 

less than 26 point type, and, for each 

Independent Poultry Grower for whom 

Defendant has an email address, by 

email with the subject line 

‘‘IMPORTANT LEGAL NOTICE FROM 

KOCH FOODS, INC.,’’ to the last known 

postal and email addresses of each 

Independent Poultry Grower who 

formerly provided services to Defendant 

under a Live Poultry Agreement that 

contained a Termination Payment 

Obligation. 

B. Within 120 calendar days of entry 

of this Final Judgment, Defendant must: 

1. Repay all Termination Payments 

not already repaid pursuant to V.A.1 

and pay all Recoverable Legal Costs for 

which Defendant has received a Request 

for Payment, except those Termination 

Payments and Recoverable Legal Costs 

that are subject to the Dispute 

Resolution Process and not yet resolved; 

and 

2. Provide a report to PSD and the 

Antitrust Division, affirmed under 

penalty of perjury by the CEO, COO, 

CFO, or other senior Koch officer, that: 

(i) Sets forth (a) the name and address 

of each Independent Poultry Grower 

who submitted a Request for Payment 

and the date the request was submitted, 

(b) the dollar amount(s) requested in 

each such Request for Payment, listing 

separately amounts requested, if any, for 

Termination Payments and for 

Recoverable Legal Costs, and (c) the 

dollar amount(s) paid to each 

Independent Poultry Grower to whom 

Defendant made any payment pursuant 

to this Final Judgment, listing separately 

the amounts paid, if any, for 

Termination Payments and for 

Recoverable Legal Costs; 

(ii) Sets forth, for any Independent 

Poultry Grower for whom the amount in 

the Request for Payment in (2)(i)(b) is 

greater than the amount paid in (2)(i)(c): 

(a) an explanation of any discrepancies 

between the amounts requested and the 

amounts paid, (b) the date Koch 

provided notice of a dispute to the 

Request for Payment, if any, (c) an 

explanation of any Requests for 

Payment rejected by Koch, (d) the total 

amounts of Termination Payments and 

Recoverable Legal Costs that Defendant 

has paid, and (e) an explanation of the 

status of any unresolved claim or 

dispute relating to a Request for 

Payment, including the date of any 

upcoming Dispute Resolution Process 

proceeding; and 

(iii) Certifies that all other 

requirements of this Final Judgment 

have been completed by Defendant. 

C. Inform PSD and the Antitrust 

Division within 30 calendar days of the 

final resolution of each outstanding 

claim or dispute identified pursuant to 

Paragraph V.B.2(ii). 

D. Certify in writing to PSD and the 

Antitrust Division annually on the 

anniversary date of the entry of this 

Final Judgment that Defendant is in 

compliance with the provisions of this 

Final Judgment, and the status of each 

outstanding claim or dispute, if any, 

relating to a Request for Payment. 

E. Within 14 calendar days of learning 

of any violation or potential violation of 

any of the provisions of this Final 

Judgment, Defendant must: 

1. Promptly take appropriate action to 

restore compliance with this Final 

Judgment; and 

2. Provide PSD and the Antitrust 

Division with a statement describing the 

violation or potential violation and any 

steps Defendant has taken to address the 

violation or potential violation. 

F. Defendant must maintain all 

documents relating to any Dispute 

Resolution Process or any violation or 

potential violation of this Final 

Judgment for the duration of this Final 

Judgment and must provide all such 

non-privileged documents to PSD and 

the Antitrust Division upon request. At 

the request of either PSD or the 

Antitrust Division, Defendant must 

within 30 calendar days of receiving the 

request furnish to PSD and the Antitrust 

Division a log of all documents 

maintained pursuant to this Paragraph 

V.F, that identifies any such documents 

for which Defendant claims protection 

under the attorney-client privilege, the 

attorney work product doctrine, or any 

other privilege. 

G. PSD and the Antitrust Division, in 

their sole discretion, may extend each of 

the time periods set forth in Paragraphs 

V.A through V.C for a total of up to an 

additional 120 calendar days. If 

Defendant seeks an extension, it must 

make that request to the Antitrust 

Division in writing at least seven 

calendar days prior to the expiration of 

the operable time period. 

VI. Compliance Inspection 

A. For the purposes of determining or 

securing compliance with this Final 

Judgment or of related orders in this 

case or of determining whether this 

Final Judgment should be modified or 

vacated, upon written request of an 

authorized representative of PSD or the 

Antitrust Division, and upon reasonable 

notice to Defendant, Defendant must 

permit, from time to time and subject to 

legally recognized privileges, authorized 

representatives, including agents 

retained by PSD or the Antitrust 

Division: 

1. to have access during Defendant’s 

office hours to inspect and copy, or at 

the option of the requesting agency, to 

require Defendant to provide electronic 

copies of all books, ledgers, accounts, 

records, data, and documents in the 

possession, custody, or control of 

Defendant relating to compliance with 

any requirements of this Final 

Judgment; and 

2. to interview, either informally or on 

the record, Defendant’s officers, 

employees, or agents relating to 

compliance with any requirements of 


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this Final Judgment. Each interviewee 

may, at their option and without 

coercion, have any counsel of their 

choosing present. The interviews must 

be subject to the reasonable convenience 

of the interviewee and without restraint 

or interference by Defendant. 

B. Upon the written request of an 

authorized representative of PSD or the 

Antitrust Division, Defendant must 

submit written reports or respond to 

written interrogatories, under oath if 

requested, relating to compliance with 

any requirements of this Final 

Judgment. 

VII. Public Disclosure 

A. No information or documents 

obtained pursuant to any provision in 

this Final Judgment may be divulged by 

USDA or the Antitrust Division to any 

person other than an authorized 

representative of the executive branch of 

the United States, except in the course 

of any Dispute Resolution Process or 

any legal proceedings to which the 

United States is a party, including 

grand-jury proceedings, for the purpose 

of securing compliance with this Final 

Judgment, for law enforcement 

purposes, or as otherwise required by 

law. 

B. In the event of a request by a third 

party to the Antitrust Division pursuant 

to the Freedom of Information Act, 5 

U.S.C. 552, for disclosure of information 

obtained pursuant to any provision of 

this Final Judgment, the Antitrust 

Division will act in accordance with 

that statute, and the Department of 

Justice regulations at 28 CFR part 16, 

including the provision on confidential 

commercial information, at 28 CFR 16.7. 

When submitting information to the 

Antitrust Division, Defendant should 

designate the confidential commercial 

information portions of all applicable 

documents and information under 28 

CFR 16.7. Designations of 

confidentiality expire 10 years after 

submission, ‘‘unless the submitter 

requests and provides justification for a 

longer designation period.’’ See 28 CFR 

16.7(b). 

C. In the event of a request by a third 

party to USDA pursuant to the Freedom 

of Information Act, 5 U.S.C. 552, for 

disclosure of information obtained 

pursuant to any provision of this Final 

Judgment, USDA will act in accordance 

with that statute, and USDA regulations 

at 7 CFR part 1, subpart A, including the 

provision on confidential commercial 

information, at 7 CFR 1.8. When 

submitting information to USDA in 

connection with the Final Judgment or 

related orders in this case, Defendant 

should designate the confidential 

commercial information portions of all 

applicable documents and information 

under 7 CFR 1.8. Designations of 

confidentiality expire 10 years after 

submission, ‘‘unless the submitter 

requests and provides justification for a 

longer designation period.’’ See 7 CFR 

1.8(c). 

D. If at the time that Defendant 

furnishes information or documents to 

USDA or the Antitrust Division 

pursuant to any provision of this Final 

Judgment, Defendant represents and 

identifies in writing information or 

documents for which a claim of 

protection may be asserted under Rule 

26(c)(1)(G) of the Federal Rules of Civil 

Procedure, and Defendant marks each 

pertinent page of such material, 

‘‘Subject to claim of protection under 

Rule 26(c)(1)(G) of the Federal Rules of 

Civil Procedure,’’ USDA or the Antitrust 

Division must give Defendant 10 

calendar days’ notice before divulging 

the material in any legal proceeding 

(other than a grand jury proceeding). 

VIII. Retention of Jurisdiction 

This Court retains jurisdiction to 

enable any party to this Final Judgment 

to apply to this Court at any time for 

further orders and directions as may be 

necessary or appropriate to carry out or 

construe this Final Judgment, to modify 

any of its provisions, to enforce 

compliance, and to punish violations of 

its provisions. 

IX. Enforcement of Final Judgment 

A. The United States retains and 

reserves all rights to enforce the 

provisions of this Final Judgment, 

including the right to seek an order of 

contempt from the Court. Defendant 

agrees that in a civil contempt action, a 

motion to show cause, or a similar 

action brought by the United States 

relating to an alleged violation of this 

Final Judgment, the United States may 

establish a violation of this Final 

Judgment and the appropriateness of a 

remedy therefor by a preponderance of 

the evidence, and Defendant waives any 

argument that a different standard of 

proof should apply. 

B. This Final Judgment should be 

interpreted to give full effect to the 

procompetitive purposes of the antitrust 

laws, to restore the competition the 

United States alleges was harmed by the 

challenged conduct, and to end an 

unfair practice or device in the market 

for the purchase of the services of 

Independent Poultry Growers the 

United States alleges was caused by 

Defendant’s inclusion of Termination 

Payment Obligations in its Live Poultry 

Agreements. Defendant agrees that it 

may be held in contempt of, and that the 

Court may enforce, any provision of this 

Final Judgment that, as interpreted by 

the Court in light of these 

procompetitive and fairness principles 

and applying ordinary tools of 

interpretation, is stated specifically and 

in reasonable detail, whether or not it is 

clear and unambiguous on its face. In 

any such interpretation, the terms of 

this Final Judgment should not be 

construed against either party as the 

drafter. 

C. In an enforcement proceeding in 

which the Court finds that Defendant 

has violated this Final Judgment, the 

United States may apply to the Court for 

an extension of this Final Judgment, 

together with other relief that may be 

appropriate. In connection with a 

successful effort by the United States to 

enforce this Final Judgment against 

Defendant, whether litigated or resolved 

before litigation, Defendant agrees to 

reimburse the United States for the fees 

and expenses of its attorneys, as well as 

all other costs including experts’ fees, 

incurred in connection with that effort 

to enforce this Final Judgment, 

including in the investigation of the 

potential violation. 

D. For a period of four years following 

the expiration of this Final Judgment, if 

the United States has evidence that 

Defendant violated this Final Judgment 

before it expired, the United States may 

file an action against that Defendant in 

this Court requesting that the Court 

order: (1) Defendant to comply with the 

terms of this Final Judgment for an 

additional term of at least four years 

following the filing of the enforcement 

action; (2) all appropriate contempt 

remedies; (3) additional relief needed to 

ensure the Defendant complies with the 

terms of this Final Judgment; and (4) 

fees or expenses as called for by this 

section IX. 

X. Expiration of Final Judgment 

Unless this Court grants an extension, 

this Final Judgment will expire seven 

years from the date of its entry, except 

that after three years from the date of its 

entry, this Final Judgment may be 

terminated upon notice by the United 

States to the Court and Defendant that 

continuation of this Final Judgment is 

no longer necessary or in the public 

interest. 

XI. Reservation of Rights 

This Final Judgment terminates only 

the claims stated in the Complaint 

against Defendant. This Final Judgment 

does not in any way affect any other 

charges or claims that may be filed by 

the United States. For the avoidance of 

doubt, the Antitrust Division and the 

PSD retain all rights to investigate and 

prosecute, including under the antitrust 


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laws or the Packers and Stockyards Act, 

any conduct, practice or device that (1) 

does not arise from a Termination 

Payment or Termination Payment 

Obligation, or (2) is an aspect of any 

ranked performance pay compensation 

(sometimes described as ‘‘tournament’’) 

system. 

XII. Notice 

For purposes of this Final Judgment, 

any notice or other communication 

required to be filed with or provided to 

the United States or the Antitrust 

Division must be sent to the addresses 

set forth below (or such other addresses 

as the United States may specify in 

writing to Defendant): 

Chief, Civil Conduct Task Force, U.S. 

Department of Justice, Antitrust 

Division, 450 Fifth Street, 

Washington, DC 20530, 

ATRJudgmentCompliance@usdoj.gov; 

and the 

PSD, Regional Director, Packers and 

Stockyards Division—Eastern 

Regional Office, United States 

Department of Agriculture, AMS 

FTPP, 75 Ted Turner Drive SW, Suite 

230, Atlanta, GA 30303. 

XIII. Public Interest Determination 

Entry of this Final Judgment is in the 

public interest. The parties have 

complied with the requirements of the 

Antitrust Procedures and Penalties Act, 

15 U.S.C. 16, including by making 

available to the public copies of this 

Final Judgment and the Competitive 

Impact Statement, public comments 

thereon, and any response to comments 

by the United States. Based upon the 

record before the Court, which includes 

the Competitive Impact Statement and, 

if applicable, any comments and 

response to comments filed with the 

Court, entry of this Final Judgment is in 

the public interest. 

Date: llllll, 2023. 

[Court approval subject to procedures of 

Antitrust Procedures and Penalties Act, 15 

U.S.C. 16] 

lllllllllllllllllllll

United States District Judge 

Appendix 1 

[Koch letterhead] 

[Name and address of sender (Koch’s Chief 

Operating Officer)] 

[Date of actual mailing and email 

distribution] 

[Name, mailing address, and email of 

addressee] 

Re: Department of Justice’s Settlement with 

Koch Foods, Inc. 

Dear [name of Independent Poultry Grower]: 

The United States Department of Justice 

has reached a settlement with Koch Foods 

that may affect you. Under the agreement, 

Koch Foods is prohibited from trying to 

require you to pay a termination payment if 

you choose to switch to another poultry 

processor. Also, you may be entitled to 

compensation if you paid any out-of-pocket 

expenses as a result of Koch attempting to 

require a termination payment from you for 

trying to switch to another poultry processor. 

Please read this letter carefully to learn more 

about your rights under the settlement. 

The Lawsuit 

The Department of Justice sued Koch 

Foods for seeking to recover payments from 

growers who tried to switch to other poultry 

processors. In the lawsuit, the Department of 

Justice alleged that Koch violated the federal 

antitrust laws and the Packers and 

Stockyards Act by requiring growers who 

tried to switch to another processor to pay 

back a portion of their new house incentive 

payments. Koch sued or threatened to sue 

several growers who did not pay back 

incentive payments sought by Koch. To 

resolve the dispute, the Department of Justice 

entered into a court-approved settlement 

with Koch. You can find the Department of 

Justice’s complaint and the Court’s Order 

approving the settlement here: [link to the 

Complaint and Final Judgment]. The Court’s 

Order requires Koch to distribute this notice 

to growers like yourself. 

Koch Cannot Require You To Pay a 

Termination Payment for Switching to 

Another Poultry Processor 

The Court’s Order prohibits Koch from 

requiring you to pay a termination payment 

when switching to another poultry processor. 

For example, Koch cannot enforce any 

provision like the following in a poultry 

production contract: 

If [Independent Poultry Grower] elects to 

terminate the [Live Poultry Agreement] 

during the . . . [time period applicable to 

this New House Incentive Agreement/New 

House Payment Period], then [Independent 

Poultry Grower] shall refund Company, 

within ninety (90) days of its notice of 

termination to Company, [any/all] payments 

made by Company [during the previous 12 

months] under this . . . . New House 

[Incentive/Payment] Agreement . . . . 

You are receiving this notice because you 

likely have a similar provision in your 

contract with Koch. Koch also will not 

include any termination payment obligation 

in any future poultry contract with you. The 

Court’s Order does not apply to loans Koch 

provides to a grower, as long as the loan had 

an original term of five years or less (no 

extensions), is being forgiven in equal 

amounts during that original term, and meets 

certain other conditions specified in the 

Court’s Order. 

To be clear, this settlement does not 

prevent Koch from paying you a new house 

incentive or any other bonus. Instead, it 

prevents Koch from trying to recover any of 

those payments if you terminate your 

contract with Koch. 

Koch Must Reimburse Out-of-Pocket Costs 

You may be entitled to reimbursement by 

Koch if you paid any out-of-pocket costs as 

a result of Koch trying to require you to pay 

a termination payment when switching to 

another processor or for threatening to 

require you to pay a termination payment if 

you switched to another processor. These 

reimbursable expenses include (1) any new 

house incentive payments that you paid back 

to Koch when you switched to another 

processor or (2) attorneys’ fees or court costs 

that you paid as a result of Koch suing or 

threatening to sue you for switching without 

paying the termination payment. If you did 

not pay any out-of-pocket expenses as a 

result of Koch attempting to require a 

termination payment from you when you 

switched processors or if another poultry 

processor reimbursed you for those expenses, 

you cannot make a claim and should not 

return the attached Request for Payment 

form. 

How To Submit a Request for Payment 

To qualify for reimbursement, you must 

submit a request for payment to Koch that (i) 

lists the relevant payments you have made 

(termination payments or recoverable legal 

costs), (ii) attaches documentation such as 

invoices that demonstrate you made the 

payments, (iii) confirms that the payments 

were not made or reimbursed by or on behalf 

of another poultry company, and (iv) swears 

that your claim is accurate under the penalty 

of perjury. A suggested Request for Payment 

form you can use is attached to this notice. 

You must submit your request for payment 

and attached documentation to Koch by 

email at [Koch email address] or by U.S. mail 

at [mailing address] no later than [60 days 

from date of notice]. 

What happens after a claim is submitted? 

If Koch does not dispute your request, it 

will pay your request on or before [stated 

date that is 120 days after the date of entry 

of the Final Judgment]. If Koch disputes your 

request, Koch must notify you within 14 days 

of receiving your request, explain the basis 

for the dispute, and submit the dispute to the 

Department of Justice. The Department of 

Justice will select an independent referee to 

resolve the dispute and will contact you, 

giving you the opportunity to participate in 

or opt out of the referee proceeding if you 

prefer. You will not be charged any fee 

related to this dispute—Koch will bear all 

fees and costs of the referee. 

* * * * * 

The Court’s Order itself, rather than the 

brief description provided in this letter, 

controls your rights and Koch’s obligations. 

If you have any questions about the Court’s 

Order or how it affects you, please contact 

me or the Civil Conduct Task Force, U.S. 

Department of Justice, Antitrust Division, at 

ATRJudgmentCompliance@usdoj.gov. 

Sincerely, 

[Sender name, Koch Foods, Inc.] 

Request for Payment 

Return this form to Koch Foods Inc. by email 

at [email address] or U.S. mail at [mailing 

address] NO LATER THAN [stated date that 

is 60 days from date of notice]. 

SUBMIT THIS FORM ONLY IF YOU 

INTEND TO FILE A CLAIM FOR PAYMENT 

Pursuant to the Final Judgment dated [date 

of entry of Final Judgment] in the matter of 

United States v. Koch Foods, Inc. (N.D. Ill.), 


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I am entitled to payment by Koch Foods, Inc. 

for the following amounts: 

$llllll for a Termination Payment 

(Please attach invoices or other documents 

that demonstrate that you incurred the 

requested payment amount; if you incurred 

no Termination Payment, leave blank or 

enter ‘‘zero’’.) 

$llllll for Recoverable Legal Costs 

(Please attach invoices or other documents 

that demonstrate that you incurred the 

requested payment amount; if you incurred 

no Recoverable Legal Costs, leave blank or 

enter ‘‘zero’’.) 

(PLEASE READ AND CHECK BOX BELOW) 

b I confirm that I have incurred or paid all 

requested amounts as reflected on the 

attached invoices or other documents and 

that none of the requested amounts was 

paid or reimbursed by or on behalf of a 

Poultry Processor. 

I, llllll, under penalty of perjury, do 

hereby certify that the foregoing information 

is true and correct. 

lllllllllllllllllllll

Signature 

lllllllllllllllllllll

Email address (required) 

lllllllllllllllllllll

Date 

Appendix 2 

[Koch letterhead] 

[Name and address of sender (Koch’s Chief 

Operating Officer)] 

[Date of actual mailing and email 

distribution] 

[Name, mailing address, and email of 

addressee] 

Re: Department of Justice’s Settlement with 

Koch Foods, Inc. 

Dear [name of Independent Poultry Grower]: 

The United States Department of Justice 

has reached a settlement with Koch Foods 

that may affect you. Under the agreement, 

you may be entitled to compensation if you 

paid any out-of-pocket expenses as a result 

of Koch attempting to require a termination 

payment from you for trying to switch to 

another poultry processor. Please read this 

letter carefully to learn more about your 

rights under the settlement. 

The Lawsuit 

The Department of Justice sued Koch 

Foods for seeking to recover payments from 

growers who tried to switch to other poultry 

processors. In the lawsuit, the Department of 

Justice alleged that Koch violated the federal 

antitrust laws and the Packers and 

Stockyards Act by requiring growers who 

tried to switch to another processor to pay 

back a portion of their new house incentive 

payments. Koch sued or threatened to sue 

several growers who did not pay back 

incentive payments sought by Koch. To 

resolve the dispute, the Department of Justice 

entered into a court-approved settlement 

with Koch. You can find the Department of 

Justice’s complaint and the Court’s Order 

approving the settlement here: [link to the 

Complaint and Final Judgment]. The Court’s 

Order requires Koch to distribute this notice 

to former Koch growers like yourself. 

Koch Must Reimburse Out-of-Pocket 

Expenses 

Although you are no longer a Koch grower, 

you are receiving this letter because your 

contract with Koch likely had a provision 

similar to the following: 

If [Independent Poultry Grower] elects to 

terminate the [Live Poultry Agreement] 

during the . . . [time period applicable to 

this New House Incentive Agreement/New 

House Payment Period], then [Independent 

Poultry Grower] shall refund Company, 

within ninety (90) days of its notice of 

termination to Company, [any/all] payments 

made by Company [during the previous 12 

months] under this . . . . New House 

[Incentive/Payment] Agreement . . . . 

You may be entitled to reimbursement by 

Koch if you paid any out-of-pocket costs as 

a result of Koch trying to require you to pay 

a termination payment when switching to 

another processor or for threatening to 

require you to pay a termination payment if 

you switched to another processor. These 

reimbursable expenses include (1) any new 

house incentive payments that you paid back 

to Koch when you switched to another 

processor or (2) attorneys’ fees or court costs 

that you paid as a result of Koch suing or 

threatening to sue you for switching without 

paying the termination payment. If you did 

not pay any out-of-pocket expenses as a 

result of Koch trying to require you to pay 

a termination payment when you switched 

processors or if another poultry processor 

reimbursed you for those expenses, you 

cannot make a claim and should not return 

the attached Request for Payment form. 

The Court’s Order does not apply to 

repayment of any loans Koch provided to 

growers as long as the loan had an original 

term of five years or less (no extensions), was 

forgiven in equal amounts during that 

original term, and met certain other 

conditions specified in the Court’s Order. 

How To Submit a Request for Payment 

To qualify for reimbursement, you must 

submit a request for payment to Koch that (i) 

lists the relevant payments you have made 

(termination payments or recoverable legal 

costs), (ii) attaches documentation such as 

invoices that demonstrate you made the 

payments, (iii) confirms that the payments 

were not made or reimbursed by or on behalf 

of another poultry company, and (iv) swears 

that your claim is accurate under the penalty 

of perjury. A suggested Request for Payment 

form you can use is attached to this notice. 

You must submit your request for payment 

and attached documentation to Koch by 

email at [Koch email address] or by U.S. mail 

at [mailing address] no later than [60 days 

from date of notice]. 

What happens after a claim is submitted? 

If Koch does not dispute your request, it 

will pay your request on or before [stated 

date that is 120 days after the date of entry 

of the Final Judgment]. If Koch disputes your 

request, Koch must notify you within 14 days 

of receiving your request, explain the basis 

for the dispute, and submit the dispute to the 

Department of Justice. The Department of 

Justice will select an independent referee to 

resolve the dispute and will contact you, 

giving you the opportunity to participate in 

or opt out of the referee proceeding if you 

prefer. You will not be charged any fee 

related to this dispute—Koch will bear all 

fees and costs of the referee. 

Additional Information About the Order 

Besides obligating Koch to repay certain 

expenses as described above, the Court’s 

Order prohibits Koch from penalizing 

growers for trying to switch processors. 

* * * * * 

The Court’s Order itself, rather than the 

brief description provided in this letter, 

controls your rights and Koch’s obligations. 

If you have any questions about the Court’s 

Order or how it affects you, please contact 

me or the Civil Conduct Task Force, U.S. 

Department of Justice, Antitrust Division, at 

ATRJudgmentCompliance@usdoj.gov. 

Sincerely, 

[Sender name, Koch Foods, Inc.] 

Request for Payment 

Return this form to Koch Foods Inc. by email 

at [email address] or U.S. mail at [mailing 

address] NO LATER THAN [stated date that 

is 60 days from date of notice]. 

SUBMIT THIS FORM ONLY IF YOU 

INTEND TO FILE A CLAIM FOR PAYMENT 

Pursuant to the Final Judgment dated [date 

of entry of Final Judgment] in the matter of 

United States v. Koch Foods, Inc. (N.D. Ill.), 

I am entitled to payment by Koch Foods, Inc. 

for the following amounts: 

$llllll for a Termination Payment 

(Please attach invoices or other documents 

that demonstrate that you incurred the 

requested payment amount; if you incurred 

no Termination Payment, leave blank or 

enter ‘‘zero’’.) 

$llllll for Recoverable Legal Costs 

(Please attach invoices or other documents 

that demonstrate that you incurred the 

requested payment amount; if you incurred 

no Recoverable Legal Costs, leave blank or 

enter ‘‘zero’’.) 

(PLEASE READ AND CHECK BOX BELOW) 

b I confirm that I have incurred or paid all 

requested amounts as reflected on the 

attached invoices or other documents and 

that none of the requested amounts was 

paid or reimbursed by or on behalf of a 

Poultry Processor. 

I, llllll, under penalty of perjury, do 

hereby certify that the foregoing information 

is true and correct. 

lllllllllllllllllllll

Signature 

lllllllllllllllllllll

Email address (required) 

lllllllllllllllllllll

Date 

United States District Court for the 

Northern District of Illinois Eastern 

Division 

United States of America, 450 Fifth Street 

NW, Washington, DC 20530, Plaintiff, v. 

Koch Foods Incorporated, 1300 W Higgins 

Road, Suite 100, Park Ridge, IL 60068, 

Defendant. 

Case No. 1:23–cv–15813 


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3Most farmers who contract their services to 

Koch raise ‘‘broilers,’’ the chickens that are 

slaughtered and processed for people to consume. 

Some farmers raise Koch’s breeder hens or pullets 

(chicks). This Competitive Impact Statement and 

the Final Judgment use the term ‘‘growers’’ to refer 

to all chicken farmers raising broilers, breeders, or 

pullets for Koch. 

4Although the termination provisions by their 

terms applied to all qualifying growers who 

terminated their contract with Koch, as a matter of 

practice, Koch enforced the provision only against 

growers who intended to switch to another 

processor. 

Judge John F. Kness 

Competitive Impact Statement 

In accordance with the Antitrust 

Procedures and Penalties Act, 15 U.S.C. 

16(b)–(h) (the ‘‘Tunney Act’’), the 

United States of America files this 

Competitive Impact Statement related to 

the proposed Final Judgment as to 

Defendant Koch Foods Incorporated 

(‘‘Koch’’ or ‘‘Defendant’’). 

I. Nature and Purpose of the Proceeding 

On November 9, 2023, the United 

States filed a civil complaint against 

Koch. Koch contracts with independent 

chicken farmers, generally known as 

‘‘growers,’’ 3 to breed and care for 

Koch’s chickens until they are ready for 

slaughter and processing. The 

Complaint alleges that, since 2014, Koch 

contracts require many of its growers to 

pay Koch an exit penalty if they 

terminate their contracts with Koch and 

switch to another processor.4 Since at 

least 2018, Koch has sought to enforce 

this exit penalty provision through 

threatened or actual litigation against 

growers who try to switch. Koch’s 

conduct has deterred growers from 

leaving Koch and switching to its 

competitors. The Complaint alleges 

Koch’s exit penalty and efforts to 

enforce the exit penalties are unlawful 

practices under section 202(a) of the 

Packers and Stockyards Act, 7 U.S.C. 

192(a), and section 1 of the Sherman 

Act, 15 U.S.C. 1. 

Count One of the Complaint alleges 

that, by including the exit penalty 

provision in its contracts and taking 

steps to enforce it, Koch has violated 

section 202(a) of the Packers and 

Stockyards Act, 7 U.S.C. 192(a), which 

prohibits unfair and deceptive practices 

by ‘‘live poultry dealers’’ such as Koch. 

Growers are required to accept the exit 

penalty provision as part of the standard 

Koch contract and cannot reasonably 

avoid it. Koch sometimes fails to 

disclose the exit penalty provision 

before a grower takes out a loan to build 

new broiler houses to grow chickens for 

Koch. The existence and enforcement of 

the exit penalty provision are practices 

that unfairly harm growers, and no 

countervailing benefit exists for these 

practices. 

Count Two of the Complaint alleges 

that Koch violates section 202(a) of the 

Packers and Stockyards Act, 7 U.S.C. 

192(a), by imposing the exit penalty 

provision because it unfairly burdens 

growers’ rights under 9 CFR 

201.100(h)(2) to terminate their 

production contracts on 90 days’ prior 

notice to Koch. 

Count Three of the Complaint alleges 

that, by including the exit penalty 

provision in its production contracts 

with growers, Koch unreasonably 

restrains interstate trade and commerce 

in violation of section 1 of the Sherman 

Antitrust Act, 15 U.S.C. 1. Koch’s illegal 

conduct reduces competition in the 

market for the purchase of growers’ 

services, imposes unreasonable costs on 

growers who might otherwise switch 

poultry processors, and deprives 

growers of the benefits of competition 

for their services. The exit penalty 

provision has prevented growers from 

accepting better compensation from 

Koch competitors. 

Along with the Complaint, the United 

States filed a proposed Final Judgment 

and a Stipulation and Order 

(‘‘Stipulation and Order’’) to remedy the 

unfair and anticompetitive effects 

resulting from the harmful conduct 

alleged in the Complaint. The Final 

Judgment is subject to review under the 

Tunney Act only to the extent that it 

resolves the Sherman Act claim because 

the Packers and Stockyards Act is not an 

‘‘antitrust law[],’’ as defined in 15 U.S.C. 

12(a). See 15 U.S.C. 16(b) (mandating 

the Tunney Act’s procedures only for 

‘‘civil proceeding[s] brought by or on 

behalf of the United States under the 

antitrust laws’’ (emphasis added)). 

Under the proposed Final Judgment, 

which is explained more fully below, 

Koch must cease all efforts to collect 

exit penalties, return all exit penalties, 

repay all affected growers their 

‘‘Recoverable Legal Costs’’ (as defined in 

the proposed Final Judgment), notify all 

former or current Koch growers whose 

production contract contained an exit 

penalty that the provision is of no 

further force or effect, and refrain from 

including an exit penalty provision in 

any chicken production contracts for the 

term of the decree. 

While the proposed Final Judgment is 

pending before the Court, Koch must 

cease all efforts to collect exit penalties 

and refrain from including an exit 

penalty provision in any future chicken 

production contracts. The terms of the 

Stipulation and Order require Koch to 

abide by and comply with the 

provisions of the proposed Final 

Judgment until it is entered by the Court 

or until the time for all appeals of any 

Court ruling declining entry of the 

proposed Final Judgment has expired. 

The United States and Koch have 

stipulated that the proposed Final 

Judgment may be entered after 

compliance with the Tunney Act. Entry 

of the proposed Final Judgment will 

terminate this action, except that the 

Court will retain jurisdiction to 

construe, modify, or enforce the 

provisions of the proposed Final 

Judgment and punish violations thereof. 

II. Description of Events Giving Rise to 

the Alleged Sherman Act Violation 

A. The Defendant and the Growers 

Koch is the fifth largest poultry 

processor in the United States. Like 

other processors, Koch contracts with 

growers to raise its broiler chickens for 

delivery to Koch’s processing plants. To 

operate at a scale sufficient to grow 

broilers for a major processor like Koch, 

a poultry farmer typically needs two to 

four modern broiler houses, with a 

construction cost of approximately 

$500,000 per house. The growers thus 

bear the risks of their investment, 

including risks of weather damage, such 

as tornadoes. By outsourcing chicken 

growing, Koch shifts the substantial 

cost, capital requirements, and risk to 

small poultry farmers. Outsourcing 

chicken growing also allows Koch to 

avoid the burden and costs associated 

with employing the growers who care 

for the chickens. 

Koch operates eight poultry 

processing complexes. Each of Koch’s 

eight complexes has contracts with 

approximately 100 growers to provide 

growing services. In total, Koch has 

more than 800 growers under contract. 

Most of these growers operate as small, 

highly leveraged family farms, and bank 

debt repayment is their largest expense. 

The only realistic way for most 

growers to repay their loans for newly 

constructed broiler houses is by growing 

broiler chickens. Once built, broiler 

houses cannot be relocated, and farmers 

can raise chickens only for processors 

that are both nearby and willing to 

accept new farmers. Growers know that 

their farm is just one among many, and 

none is an irreplaceable supplier of 

growing services for Koch or any other 

processor. 

In deciding whether to approve the 

grower’s loan, a lender will generally 

evaluate a grower’s projected cash flow 

based on the standard-form Koch 

contract. The lender expects that Koch 

will require the farmer to sign the 

contract without amendment after the 

chicken houses are built. The lender 

generally conditions a loan for newVerDate Sep<11>2014 20:23 Dec 06, 2023 Jkt 262001 PO 00000 Frm 00119 Fmt 4703 Sfmt 4703 E:\FR\FM\07DEN1.SGM 07DEN1

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house construction on a farmer’s 

willingness to execute the Koch 

standard contract ‘‘as is’’ once the new 

broiler houses are ready to receive their 

first flocks. Most loans for broiler 

houses span 10 or 15 years, while some 

are longer. As a practical matter, Koch 

offers contracts to growers on a ‘‘take-itor-leave-it’’ basis, and a prospective 

grower typically has no opportunity to 

negotiate the compensation terms of a 

Koch contract. 

Koch wields enormous leverage over 

the farmers who grow its broiler 

chickens. These indebted growers 

generally need at least six flocks each 

year to stay current on their broilerhouse loans, yet Koch decides the 

number of flocks to allot to each farmer. 

If Koch elected not to renew a grower’s 

contract, or merely reduced the number 

of flocks placed per year, many growers 

would be unable to make their loan 

repayments. Koch also controls other 

factors that can significantly affect the 

compensation of growers, such as the 

number and quality of chicks provided, 

the type of feed, the timing of when 

flocks are collected, the use of 

antibiotics, and various payment 

adjustments. 

B. The Anticompetitive Effects of the 

Koch Exit Penalty Provision 

Count Three of the Complaint, which 

charges the Sherman Act violation, 

alleges that the Koch exit penalty and 

Koch’s efforts to enforce it through 

threatened or filed litigation against 

growers result in anticompetitive effects 

in the market for the purchase of 

farmers’ growing services. 

Processors typically own the chicks 

they place with growers under 

production contracts, and pay for the 

chickens’ transportation, feed, 

veterinary care, and collection. The cost 

and risk of transporting feed and 

chickens limit the area in which 

processors can contract with growers. 

The geographic radius within which a 

processor can economically contract 

with farmers for chicken growing 

services constitutes its ‘‘draw area.’’ 

Although there may be some 

processor-specific requirements, topquality chicken housing that satisfies 

one processor’s requirements can be 

acceptable to other processors in the 

area. Growers with top-quality housing 

may be able to improve their 

compensation by switching from Koch 

to another processor, depending on the 

competitive conditions in the relevant 

market. Another processor competes 

with a Koch complex for chicken 

growing services if the draw area of one 

or more of its complexes overlaps 

significantly with the draw area of that 

Koch complex. 

For each Koch complex that competes 

with one or more rival processors, the 

relevant geographic market is an area 

around the Koch complex and its set of 

competing processors. Koch contracts 

with a significant share of the growers 

working for processors within the 

geographic market of each Koch 

complex. 

Nearly all growers contracting with 

Koch are also within the draw area of 

at least one competitor’s complex and 

therefore can benefit from competition 

for their services. Over 80 percent of 

growers working for Koch are located 

within the draw areas of the complexes 

of at least two of Koch’s competitors. 

More than half of the growers who 

provide their services to Koch are 

located within the draw areas of the 

complexes of three or more of Koch’s 

competitors. 

Each Koch complex competes with 

one or more rival processors to sign up 

growers within their overlapping draw 

areas. But the Koch exit penalty 

provision artificially restrains growers 

from switching from Koch to a 

competitor. Because Koch contracts 

with a significant share of the growers 

under contract with processors in each 

complex’s geographic market, these 

switching restraints significantly lessen 

competition in those markets. 

Koch’s highly visible efforts to collect 

its exit penalties have deterred growers 

who might otherwise avail themselves 

of competition between Koch and other 

processors to obtain better 

compensation for themselves and their 

families. Koch’s exit penalty 

unreasonably harms competition for 

growers’ services. 

III. Explanation of the Proposed Final 

Judgment 

The relief required by the proposed 

Final Judgment will remedy the loss of 

competition alleged in Count Three. 

Under the proposed judgment, Koch 

must eliminate the exit penalty 

provision from Koch’s current contracts 

and omit it from future contracts. 

Further, Koch must repay all exit 

penalties that it has collected and to 

reimburse all Recoverable Legal Costs 

that growers have incurred as a result of 

Koch’s threatened or filed litigation. The 

proposed judgment requires Koch to 

refrain from collecting any exit penalty, 

taking any steps to collect any exit 

penalty, or including an exit penalty in 

its chicken production contracts. It also 

prohibits Koch from engaging in any 

retaliation, intimidation, or harassment 

of any grower who was involved in any 

exit penalty dispute or who cooperated 

with the United States Department of 

Justice or the United States Department 

of Agriculture in their investigations of 

Koch’s exit penalties. 

Sections IV and V of the proposed 

Final Judgment require Koch to: 

a. Inform all growers with contracts 

that contain an exit penalty provision 

that the provision is unenforceable. 

b. Repay exit penalties collected from 

growers. 

c. Notify all growers whose 

production agreements contain or 

contained an exit penalty provision that 

they may make a claim for repayment of 

any exit penalties not already repaid by 

Koch and for reimbursement of any 

Recoverable Legal Costs by submitting 

to Koch a request for payment. The form 

of notices to current and former growers 

are attached to the proposed Final 

Judgment as Appendix 1 and Appendix 

2, respectively. 

d. Repay all growers’ undisputed 

requests for payment within 120 days of 

entry of the proposed Final Judgment. 

e. Commence a dispute resolution 

process set forth in the proposed Final 

Judgment within 14 days of receipt of 

any request for payment that Koch 

disputes. Under this process, the 

Antitrust Division will select a referee, 

whose decision will be final, binding on 

Koch and the grower or former grower, 

and enforceable by the Antitrust 

Division or the grower through this 

Court’s contempt power under the 

proposed Final Judgment. 

f. Refrain from accepting the payment 

of any exit penalty, taking any steps to 

collect any exit penalty, or including an 

exit penalty provision in any production 

agreement with a grower. 

g. Refrain from engaging in any 

retaliation, intimidation, or harassment 

of any grower who was involved in any 

exit penalty dispute or who cooperated 

with the United States Department of 

Justice or the United States Department 

of Agriculture in their investigations 

related to the subject matter of this 

action. 

h. Meet certain reporting obligations 

to the United States Department of 

Justice and the United States 

Department of Agriculture, including an 

annual certification that Koch is in 

compliance with the proposed Final 

Judgment. 

For any loans Koch makes to growers, 

the acceleration of such a loan upon the 

termination of a grower’s production 

agreement constitutes a prohibited exit 

penalty under the proposed Final 

Judgment unless the loan terms conform 

to specific criteria set forth in the 

definition of ‘‘Loan Agreement’’ 

(Paragraph II.G). In particular, a loan 


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agreement permitted under the 

proposed Final Judgment must: 

• Have an original term of five years 

or less and not have been extended prior 

to acceleration of the loan by a 

Termination; 

• Provide that the loan will be 

forgiven or repaid pro rata annually or 

more frequently during the original 

term, with only the outstanding balance 

of the original loan accelerated and 

payable upon termination; 

• Not impose additional charges for 

prepayment or termination, such as a 

prepayment penalty; 

• Not provide for the payment of 

interest on the loan; 

• Be for the purpose of facilitating the 

construction or improvement of one or 

more poultry houses and/or ancillary 

facilities, including the purchase of 

related real estate and/or the purchase 

and installation of related equipment, 

and where the value of the poultry 

houses and/or ancillary facilities, 

including any related real estate and/or 

related equipment, is projected, at the 

time of the agreement, to meet or exceed 

the amount of any payment due as a 

result of the grower initiating a 

termination of a production agreement 

with Koch; and 

• Not violate the antitrust laws or the 

Packers and Stockyards Act. 

The proposed Final Judgment also 

contains provisions designed to promote 

compliance with and make enforcement 

of the proposed Final Judgment as 

effective as possible. In order to 

determine and secure compliance with 

the proposed Final Judgment and 

related orders such as the Stipulation 

and Order, and to determine whether 

the proposed Final Judgment should be 

modified or vacated, Paragraph VI.A of 

the proposed Final Judgment provides 

that, upon written request and with 

reasonable notice, from time to time and 

subject to legally recognized privileges, 

Koch must permit authorized 

representatives or agents of the Packers 

and Stockyards Division of the USDA 

(the ‘‘PSD’’) or the Antitrust Division of 

the United States Department of Justice: 

1. to have access during Koch’s office 

hours to inspect and copy, or at the 

option of the requesting agency, to 

require Koch to provide electronic 

copies of all books, ledgers, accounts, 

records, data, and documents in the 

possession, custody, or control of Koch 

relating to compliance with any 

requirements of the proposed Final 

Judgment; and 

2. to interview, either informally or on 

the record, Koch’s officers, employees, 

or agents relating to compliance with 

any requirements of the proposed Final 

Judgment. Each interviewee may, at 

their option and without coercion, have 

any counsel of their choosing present. 

The interviews must be subject to the 

reasonable convenience of the 

interviewee and without restraint or 

interference by Koch. 

Paragraph VI.B of the proposed Final 

Judgment provides that upon the 

written request of an authorized 

representative of the PSD or the 

Antitrust Division, Koch must submit 

written reports or respond to written 

interrogatories, under oath if requested, 

relating to any matters contained in the 

proposed Final Judgment. 

Paragraph IX.A provides that the 

United States retains and reserves all 

rights to enforce the provisions of the 

proposed Final Judgment, including the 

right to seek an order of contempt from 

the Court. Koch agrees that in a civil 

contempt action, a motion to show 

cause, or a similar action brought by the 

United States relating to an alleged 

violation of the proposed Final 

Judgment, the United States may 

establish a violation of the proposed 

Final Judgment and the appropriateness 

of a remedy by a preponderance of the 

evidence, and Koch waives any 

argument that a different standard of 

proof should apply. 

As a further reservation of rights, 

Section XI of the proposed Final 

Judgment provides that the proposed 

Final Judgment terminates only the 

claims expressly stated in the Complaint 

against Koch and does not in any way 

affect any other charges or claims that 

may be filed by the United States. For 

the avoidance of doubt, Section XI 

further provides that the Antitrust 

Division and the PSD retain all rights to 

investigate and prosecute, including 

under the antitrust laws or the Packers 

and Stockyards Act, any conduct, 

practice or device that: (1) does not arise 

from an exit penalty or exit penalty 

provision, or (2) is an aspect of any 

ranked performance pay compensation 

(sometimes described as ‘‘tournament’’) 

system. 

Paragraph IX.B of the proposed Final 

Judgment provides that the proposed 

Final Judgment should be interpreted to 

give full effect to the procompetitive 

purposes of the antitrust laws, to restore 

the competition the United States 

alleges was harmed by the challenged 

conduct, and to end an unfair practice 

or device in the market for the purchase 

of growers’ services caused by Koch’s 

inclusion of exit penalty provisions in 

its production agreements. Defendant 

agrees that it may be held in contempt 

of, and that the Court may enforce, any 

provision of the proposed Final 

Judgment that, as interpreted by the 

Court in light of these procompetitive 

and fairness principles and applying 

ordinary tools of interpretation, is stated 

specifically and in reasonable detail, 

whether or not it is clear and 

unambiguous on its face. In any such 

interpretation, the terms of the proposed 

Final Judgment should not be construed 

against either party as the drafter. 

Paragraph IX.C provides that, in an 

enforcement proceeding in which the 

Court finds that Koch has violated the 

proposed Final Judgment, the United 

States may apply to the Court for an 

extension of the proposed Final 

Judgment, together with other relief that 

may be appropriate. In connection with 

a successful effort by the United States 

to enforce the proposed Final Judgment 

against Koch, whether litigated or 

resolved before litigation, Koch agrees to 

reimburse the United States for the fees 

and expenses of its attorneys, as well as 

all other costs including experts’ fees, 

incurred in connection with that effort 

to investigate the potential violation and 

enforce the proposed Final Judgment. 

Paragraph IX.D provides that, for a 

period of four years following the 

expiration of the proposed Final 

Judgment, if the United States has 

evidence that Koch violated the 

proposed Final Judgment before it 

expired, the United States may file an 

action against Koch in this Court 

requesting that the Court order: (1) 

Defendant to comply with the terms of 

the proposed Final Judgment for an 

additional term of at least four years 

following the filing of the enforcement 

action; (2) all appropriate contempt 

remedies; (3) additional relief needed to 

ensure Koch complies with the terms of 

the proposed Final Judgment; and (4) 

fees or expenses as called for by Section 

IX of the proposed Final Judgment. 

Finally, Section X of the proposed 

Final Judgment provides that, unless 

this Court grants an extension, the 

proposed Final Judgment will expire 

seven years from the date of its entry, 

except that after three years from the 

date of its entry, the Final Judgment 

may be terminated upon notice by the 

United States to the Court and Koch that 

continuation of the Final Judgment is no 

longer necessary or in the public 

interest. 

IV. Remedies Available to Potential 

Private Plaintiffs 

Section 4 of the Clayton Act, 15 

U.S.C. 15, provides that any person who 

has been injured as a result of conduct 

prohibited by the antitrust laws may 

bring suit in federal court to recover 

three times the damages the person has 

suffered, as well as costs and reasonable 

attorneys’ fees. Entry of the proposed 

Final Judgment neither impairs nor 


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assists the bringing of any private 

antitrust damage action. Under the 

provisions of section 5(a) of the Clayton 

Act, 15 U.S.C. 16(a), the proposed Final 

Judgment has no prima facie effect in 

any subsequent private lawsuit that may 

be brought against Koch. 

Section 308 of the Packers and 

Stockyards Act, 7 U.S.C. 209, provides 

that any person subject to the Act who 

violates any provisions of the Act (or of 

any order of the Secretary of Agriculture 

relating to the Act) related to the 

purchase or handling of poultry or any 

poultry growing arrangement (among 

other violations) may be liable to 

persons injured as a result of those 

violations for the full amount of 

damages sustained as a consequence, 

and such injured persons may bring suit 

in federal court or may complain to the 

Secretary of Agriculture. 

V. Procedures Available for 

Modification of the Proposed Final 

Judgment 

The United States and Koch have 

stipulated that the proposed Final 

Judgment may be entered by the Court 

after compliance with the provisions of 

the Tunney Act, provided that the 

United States has not withdrawn its 

consent. The Tunney Act conditions 

entry of the Final Judgment’s resolution 

of the Sherman Act claim upon the 

Court’s determination that the proposed 

Final Judgment with respect to the 

Sherman Act claim is in the public 

interest. 

The Tunney Act provides a period of 

at least 60 days preceding the effective 

date of a proposed final judgment that 

resolves a Sherman Act claim during 

which time any person may submit to 

the United States written comments 

regarding the proposed final judgment. 

Any person who wishes to comment on 

the proposed final judgment should do 

so within 60 days of the date of 

publication of this Competitive Impact 

Statement in the Federal Register, or 

within 60 days of the first date of 

publication in a newspaper of the 

summary of this Competitive Impact 

Statement, whichever is later. All 

comments received during this period 

will be considered by the United States 

Department of Justice, which remains 

free to withdraw its consent to the 

proposed Final Judgment at any time 

before the Court’s entry of the Final 

Judgment. The comments and the 

response of the United States will be 

filed with the Court. In addition, the 

comments and the United States’ 

responses will be published in the 

Federal Register unless the Court agrees 

that the United States instead may 

publish them on the United States 

Department of Justice, Antitrust 

Division’s internet website. 

Written comments should be 

submitted in English to: Daniel S. 

Guarnera, Chief, Civil Conduct Task 

Force, Antitrust Division, United States 

Department of Justice, 450 Fifth St. NW, 

Suite 8600, Washington, DC 20530, 

ATRJudgmentCompliance@usdoj.gov. 

The proposed Final Judgment 

provides that the Court retains 

jurisdiction over this action, and the 

parties may apply to the Court for any 

order necessary or appropriate for the 

modification, interpretation, or 

enforcement of the Final Judgment. 

VI. Alternatives to the Proposed Final 

Judgment 

As an alternative to the proposed 

Final Judgment, the United States 

considered a full trial on the merits 

against Koch. The United States could 

have commenced contested litigation 

and brought the case to trial, seeking 

relief including a declaration that the 

exit penalty provisions in the growers’ 

production agreements with Koch were 

neither enforceable nor effective, an 

injunction requiring Koch to give 

appropriate notices to current and 

former growers, and monetary relief to 

repay growers from whom Koch has 

collected exit penalties and to reimburse 

growers for Recoverable Legal Costs as 

a consequence of Koch’s collection 

efforts. The United States is satisfied, 

however, that the relief required by the 

proposed Final Judgment will remedy 

the anticompetitive effects alleged in the 

Complaint, preserving competition in 

the market for the purchase of poultry 

growing services. Thus, the proposed 

Final Judgment achieves all or 

substantially all of the relief the United 

States would have obtained through 

litigation against Koch but avoids the 

time, expense, and uncertainty of a full 

trial on the merits. 

VII. Standard of Review Under the 

Tunney Act for the Proposed Final 

Judgment 

Under the Clayton Act and Tunney 

Act, proposed final judgments, or 

‘‘consent decrees,’’ that resolve antitrust 

claims brought by the United States are 

subject to a 60-day comment period, 

after which the Court must determine 

whether entry of a proposed final 

judgment with respect to those antitrust 

claims ‘‘is in the public interest.’’ 15 

U.S.C. 16(e)(1). In making that 

determination, the Court, in accordance 

with the statute as amended in 2004, is 

required to consider: 

(A) the competitive impact of such 

judgment, including termination of alleged 

violations, provisions for enforcement and 

modification, duration of relief sought, 

anticipated effects of alternative remedies 

actually considered, whether its terms are 

ambiguous, and any other competitive 

considerations bearing upon the adequacy of 

such judgment that the court deems 

necessary to a determination of whether the 

consent judgment is in the public interest; 

and 

(B) the impact of entry of such judgment 

upon competition in the relevant market or 

markets, upon the public generally and 

individuals alleging specific injury from the 

violations set forth in the complaint 

including consideration of the public benefit, 

if any, to be derived from a determination of 

the issues at trial. 

15 U.S.C. 16(e)(1)(A) & (B). In 

considering these statutory factors, the 

Court’s inquiry is necessarily a limited 

one as the government is entitled to 

‘‘broad discretion to settle with the 

defendant within the reaches of the 

public interest.’’ United States v. 

Microsoft Corp., 56 F.3d 1448, 1461 

(D.C. Cir. 1995); United States v. U.S. 

Airways Grp., Inc., 38 F. Supp. 3d 69, 

75 (D.D.C. 2014) (explaining that the 

‘‘court’s inquiry is limited’’ in Tunney 

Act settlements); United States v. InBev 

N.V./S.A., No. 08–1965 (JR), 2009 U.S. 

Dist. LEXIS 84787, at *3 (D.D.C. Aug. 

11, 2009) (noting that a court’s review 

of a proposed Final Judgment is limited 

and only inquires ‘‘into whether the 

government’s determination that the 

proposed remedies will cure the 

antitrust violations alleged in the 

complaint was reasonable, and whether 

the mechanisms to enforce the final 

judgment are clear and manageable’’). 

As the U.S. Court of Appeals for the 

District of Columbia Circuit has held, 

under the Tunney Act, a court 

considers, among other things, the 

relationship between the remedy 

secured and the specific allegations in 

the government’s Complaint, whether a 

proposed Final Judgment is sufficiently 

clear, whether its enforcement 

mechanisms are sufficient, and whether 

it may positively harm third parties. See 

Microsoft, 56 F.3d at 1458–62. With 

respect to the adequacy of the relief 

secured by a proposed Final Judgment, 

a court may not ‘‘make de novo 

determination of facts and issues.’’ 

United States v. W. Elec. Co., 993 F.2d 

1572, 1577 (D.C. Cir. 1993) (quotation 

marks omitted); see also Microsoft, 56 

F.3d at 1460–62; United States v. Alcoa, 

Inc., 152 F. Supp. 2d 37, 40 (D.D.C. 

2001); United States v. Enova Corp., 107 

F. Supp. 2d 10, 16 (D.D.C. 2000); InBev, 

2009 U.S. Dist. LEXIS 84787, at *3. 

Instead, ‘‘[t]he balancing of competing 

social and political interests affected by 

a proposed antitrust decree must be left, 

in the first instance, to the discretion of 

the Attorney General.’’ W. Elec. Co., 993 


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F.2d at 1577 (quotation marks omitted). 

‘‘The court should also bear in mind the 

flexibility of the public interest inquiry: 

the court’s function is not to determine 

whether the resulting array of rights and 

liabilities is the one that will best serve 

society, but only to confirm that the 

resulting settlement is within the 

reaches of the public interest.’’ 

Microsoft, 56 F.3d at 1460 (quotation 

marks omitted); see also United States v. 

Deutsche Telekom AG, No. 19–2232 

(TJK), 2020 WL 1873555, at *7 (D.D.C. 

Apr. 14, 2020). More demanding 

requirements would ‘‘have enormous 

practical consequences for the 

government’s ability to negotiate future 

settlements,’’ contrary to congressional 

intent. Microsoft, 56 F.3d at 1456. ‘‘The 

Tunney Act was not intended to create 

a disincentive to the use of the consent 

decree.’’ Id. 

The United States’ predictions about 

the efficacy of the remedy are to be 

afforded deference by the Court. See, 

e.g., Microsoft, 56 F.3d at 1461 

(recognizing courts should give ‘‘due 

respect to the Justice Department’s . . . 

view of the nature of its case’’); United 

States v. Iron Mountain, Inc., 217 F. 

Supp. 3d 146, 152–53 (D.D.C. 2016) (‘‘In 

evaluating objections to settlement 

agreements under the Tunney Act, a 

court must be mindful that [t]he 

government need not prove that the 

settlements will perfectly remedy the 

alleged antitrust harms[;] it need only 

provide a factual basis for concluding 

that the settlements are reasonably 

adequate remedies for the alleged 

harms.’’ (internal citations omitted)); 

United States v. Republic Servs., Inc., 

723 F. Supp. 2d 157, 160 (D.D.C. 2010) 

(noting ‘‘the deferential review to which 

the government’s proposed remedy is 

accorded’’); United States v. ArcherDaniels-Midland Co., 272 F. Supp. 2d 1, 

6 (D.D.C. 2003) (‘‘A district court must 

accord due respect to the government’s 

prediction as to the effect of proposed 

remedies, its perception of the market 

structure, and its view of the nature of 

the case.’’). The ultimate question is 

whether ‘‘the remedies [obtained by the 

Final Judgment are] so inconsonant with 

the allegations charged as to fall outside 

of the ‘reaches of the public interest.’ ’’ 

Microsoft, 56 F.3d at 1461 (quoting W. 

Elec. Co., 900 F.2d at 309). 

Moreover, the Court’s role under the 

Tunney Act is limited to reviewing the 

remedy in relationship to the antitrust 

violations that the United States has 

alleged in its Complaint, and the 

Tunney Act does not authorize the 

Court to ‘‘construct [its] own 

hypothetical case and then evaluate the 

decree against that case.’’ Microsoft, 56 

F.3d at 1459; see also U.S. Airways, 38 

F. Supp. 3d at 75 (noting that the court 

must simply determine whether there is 

a factual foundation for the 

government’s decisions such that its 

conclusions regarding the proposed 

settlements are reasonable); InBev, 2009 

U.S. Dist. LEXIS 84787, at *20 (‘‘[T]he 

‘public interest’ is not to be measured by 

comparing the violations alleged in the 

complaint against those the court 

believes could have, or even should 

have, been alleged.’’). Because the 

‘‘court’s authority to review the decree 

depends entirely on the government’s 

exercising its prosecutorial discretion by 

bringing a case in the first place,’’ it 

follows that ‘‘the court is only 

authorized to review the decree itself,’’ 

and not to ‘‘effectively redraft the 

complaint’’ to inquire into other matters 

that the United States did not pursue. 

Microsoft, 56 F.3d at 1459–60. 

In its 2004 amendments to the 

Tunney Act, Congress made clear its 

intent to preserve the practical benefits 

of using judgments proposed by the 

United States in antitrust enforcement, 

Public Law 108–237 § 221, and added 

the unambiguous instruction that 

‘‘[n]othing in this section shall be 

construed to require the court to 

conduct an evidentiary hearing or to 

require the court to permit anyone to 

intervene.’’ 15 U.S.C. 16(e)(2); see also 

U.S. Airways, 38 F. Supp. 3d at 76 

(indicating that a court is not required 

to hold an evidentiary hearing or to 

permit intervenors as part of its review 

under the Tunney Act). This language 

explicitly wrote into the statute what 

Congress intended when it first enacted 

the Tunney Act in 1974. As Senator 

Tunney explained: ‘‘[t]he court is 

nowhere compelled to go to trial or to 

engage in extended proceedings which 

might have the effect of vitiating the 

benefits of prompt and less costly 

settlement through the consent decree 

process.’’ 119 Cong. Rec. 24,598 (1973) 

(statement of Sen. Tunney). ‘‘A court 

can make its public interest 

determination based on the competitive 

impact statement and response to public 

comments alone.’’ U.S. Airways, 38 F. 

Supp. 3d at 76 (citing Enova Corp., 107 

F. Supp. 2d at 17). 

VIII. Determinative Documents 

There are no determinative materials 

or documents within the meaning of the 

Tunney Act that were considered by the 

United States in formulating the 

proposed Final Judgment. 

Dated: November 17, 2023. 

Respectfully submitted, 

For Plaintiff, United States of America 

Jack G. Lerner, 

U.S. Department of Justice Antitrust Division, 

Civil Conduct Task Force, 450 Fifth Street 

NW, Suite 8600, Washington, DC 20530, Tel: 

202–227–9295, Fax: 202–616–2441, Email: 

jack.lerner@usdoj.gov. 

[FR Doc. 2023–26794 Filed 12–6–23; 8:45 am] 

BILLING CODE 4410–11–P 

DEPARTMENT OF JUSTICE 

Notice of Lodging of Proposed 

Modification To Consent Decree Under 

the Clean Water Act 

On December 3, 2023, the Department 

of Justice lodged with the United States 

District Court for the Eastern District of 

Tennessee in the lawsuit entitled United 

States and the State of Tennessee v. The 

City of Chattanooga, Civil Action No. 

1:12–cv–00245, a proposed modification 

to the existing Consent Decree. 

The United States, on behalf of the 

U.S. Environmental Protection Agency 

(‘‘EPA’’), and the State of Tennessee 

filed this lawsuit on July 17, 2012, 

under the Clean Water Act and 

Tennessee State law alleging violations 

with respect to the City of Chattanooga’s 

publicly owned treatment works. A 

Consent Decree resolving these claims 

was entered by the Court on April 24, 

2014. The proposed modification to the 

Consent Decree extends certain 

deadlines to achieve compliance with 

the Consent Decree while adding 

significant remedial projects that the 

city must complete in the next five 

years. The cost of the additional 

required projects is estimated to be $185 

million. 

The publication of this notice opens 

a period for public comment on the 

proposed modification to the Consent 

Decree. Comments should be addressed 

to the Assistant Attorney General, 

Environment and Natural Resources 

Division, and should refer to United 

States and the State of Tennessee v. The 

City of Chattanooga, D.J. Ref. No. 90–5– 

1–1–10145. All comments must be 

submitted no later than thirty (30) days 

after the publication date of this notice. 

Comments may be submitted either by 

email or by mail: 

To submit 

comments: Send them to: 

By email ....... pubcomment-ees.enrd@

usdoj.gov. 

By mail ......... Assistant Attorney General, 

U.S. DOJ—ENRD, P.O. 

Box 7611, Washington, DC 

20044–7611. 

During the public comment period, 

the Consent Decree may be examined 

and downloaded at this Justice 

Department website: https:// 


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