Court Opinion

ID: 9410666
Source: CourtListenerOpinion
Date Created: 2023-07-24 05:00:33.22112+00
Date Added: 2024-06-11T17:20:59.957745
License: Public Domain

In the

     United States Court of Appeals
                 For the Seventh Circuit
                     ____________________

No. 22-1858
AMORY INVESTMENTS LLC, et al.,
                                                Plaintiffs-Appellants,

                                 v.

UTRECHT-AMERICA HOLDINGS, INC., et al.,
                                               Defendants-Appellees.
                     ____________________

         Appeal from the United States District Court for the
           Northern District of Illinois, Eastern Division.
            No. 16 C 8637 — Thomas M. Durkin, Judge.
                     ____________________

      ARGUED JANUARY 6, 2023 — DECIDED JULY 21, 2023
                 ____________________

   Before EASTERBROOK, ST. EVE, and KIRSCH, Circuit Judges.
    EASTERBROOK, Circuit Judge. Plaintiﬀs contend in multiple
consolidated suits that many ﬁrms in the broiler-chicken busi-
ness formed a cartel. The district court concluded that these
claims require a trial. In re Broiler Chicken Antitrust Litigation,
290 F. Supp. 3d 772 (N.D. Ill. 2017); 2023 U.S. Dist. LEXIS
113271 (N.D. Ill. June 30, 2023). Third-party discovery in that
ongoing suit turned up evidence that Rabobank, a lender to
2                                                    No. 22-1858

several broiler-chicken producers, urged at least two of them
to cut production. This led some plaintiﬀs to add Rabobank
as an additional defendant. (Like the district court, we use
“Rabobank” as an umbrella term for Utrecht-America Hold-
ings, Inc., and its subsidiaries Coöperatieve Rabobank, U.A.;
Rabo AgriFinance LLC; Rabobank USA Financial Corp.; and
Utrecht-America Finance Co.) But the district court deemed
the complaint against Rabobank too thin to state a claim, and
it dismissed an amended complaint as well. 2022 U.S. Dist.
LEXIS 78421 (N.D. Ill. Feb. 11, 2022). The court entered a partial
ﬁnal judgment under Fed. R. Civ. P. 54(b), see 2022 U.S. Dist.
LEXIS 78638 (N.D. Ill. Apr. 29, 2022), from which eight of the
plaintiﬀs have appealed.
    Plaintiﬀs’ claims rest on §1 of the Sherman Act, 15 U.S.C.
§1, which bans combinations and conspiracies in restraint of
trade. In Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), the
Supreme Court recounted and reaﬃrmed a line of cases hold-
ing that §1 forbids only agreements and does not reach uni-
lateral action. To state a §1 claim, Twombly held, the complaint
must plausibly allege that the defendants have agreed with
each other, not simply that they have reduced output in par-
allel or otherwise evinced an understanding that lower output
implies higher prices and (potentially) higher proﬁts.
   The district judge thought that the complaint against Ra-
bobank foundered for the same reason as the complaint in
Twombly: all the plaintiﬀs allege is that Rabobank set out to
protect its interests through unilateral action. The complaint
does not allege that Rabobank served as a conduit for the pro-
ducers’ agreement, that it helped them coordinate their pro-
duction and catch cheaters (the bane of any cartel), or even
that Rabobank knew that the producers were coordinating
No. 22-1858                                                   3

among themselves. (The trial of the main claim lies ahead, and
perhaps a jury will determine that the producers did not form
a cartel. For current purposes, though, we must assume that
they did—though we need not assume that Rabobank knew
it, for the complaint does not allege that knowledge.)
   Although the district court dismissed the complaint
against Rabobank on the pleadings, it eﬀectively granted
summary judgment. The two procedures merged because, be-
fore ﬁling their complaint against Rabobank, plaintiﬀs had
the beneﬁt of discovery against Rabobank in the main suit
against the producers. So if there is a plausible claim to be
made, the district judge thought, plaintiﬀs should not have
had any trouble making it. Yet the complaint does not allege
that Rabobank facilitated an agreement among producers or
helped with its enforcement.
    Instead the complaint alleges two varieties of evidence.
One is a ﬂurry of emails among managers and other employ-
ees at Rabobank observing that lower output and higher
prices in the broiler-chicken market would improve the
bank’s chance of collecting its loans. The other is a pair of
emails from Adriaan Weststrate, the head of Rabobank’s poul-
try-lending section, to executives at producers Perdue and Pil-
grim’s Pride. Weststrate told Perdue: “You can count on us to
help you in any way possible to get through this down cycle,
including preaching the gospel to other poultry companies.”
The next day Weststrate used the same word in an email to an
executive at Pilgrim’s Pride, telling him that chicken price in-
creases and corn price decreases were “unfortunately un-
likely so we are left with the old ‘production cuts’ gospel!!”
   Like the district judge, we see in these emails nothing but
unilateral action by Rabobank. The intra-Rabobank emails
4                                                  No. 22-1858

could not have promoted or facilitated cooperation among
producers. And Weststrate’s two messages did nothing be-
yond remind the producers of something they doubtless
learned in Economics 101: as long as demand curves slope
downward, lower output implies higher prices. Delivering a
lesson in microeconomics does not violate the Sherman Act.
A violation depends on agreement, as Twombly stressed, and
unilateral action or advice diﬀers from agreement. See also,
e.g., United States v. Colgate & Co., 250 U.S. 300 (1919).
    That’s really all there is to the claim against Rabobank. We
do not doubt that banks and other intermediaries can be liable
under §1 if they facilitate the making or enforcement of an
agreement among producers. But the only evidence to which
this complaint adverts does not plausibly imply that Ra-
bobank did any such thing, so the judgment in its favor is
                                                     AFFIRMED.