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The Jungle: COVID-19 Edition

When Upton Sinclair wrote The Jungle, he addressed much of the corruption which took place in the meatpacking industry. This then led to federal food safety laws, which were generally effective, but failed to eradicate corruption from the industry. Many say that, thanks to COVID-19, anti-competitive behavior within the meatpacking industry has only been exacerbated. In one particular case, plaintiffs continue struggling to stake a claim against Minnesota cattle ranchers and pork purchasers for violations amidst the economic uncertainty of COVID.
Prior to the pandemic, the defendants were accused of conspiring to decrease production using an industry reporting service, Agri Stats, to exchange non-public information about prices, sales, and demand. However, U.S. District Court Judge John R. Tunheim initially dismissed the case in August 2019 because there was “no smoking gun.” The plaintiff failed to provide sufficient evidence that suggested an illegal agreement to restrain trade. While their “plus factors” (potentially collusive use of Agri Stats, inelasticity of pork demand, and common trade associations among defendants) were “undoubtedly strong,” the court still ruled that the plaintiff had not implied any anticompetitive conduct.
After amending their complaints, the plaintiff came back with an increased emphasis on Agri Stats as a core conspirator. Not only did defendants use the Agri Stats platform for “increasing profitability – not always increasing the level of production,” new evidence also proves the defendants used Agri Stats’ benchmark reports to “monitor each other’s production and control supply and price in furtherance of their anticompetitive scheme.” Normally, this would sufficiently imply collusion; however, the uncertainty of COVID-19 pokes holes into the plaintiff’s argument.
Plant closures as a result of COVID have forced many of the defendants to reduce operational capacity, bloating the supply of unsold animals for slaughter and so affecting price levels. Additionally, judicial notice of President Donald Trump’s April 28 executive order provides evidence of how susceptible the pork market is to any kind of supply constraints. The order deemed meatpacking plants as essential businesses, because even a single plant closure can disrupt the supply to an entire chain of grocery stores. Thus, it is harder to distinguish whether movements in supply are an effect of the pandemic or collusion. Furthermore, when it comes to crisis situations like the present one, many argue that coordinated responses may be the only way to maintain the health of an industry. For example, the Justice Department allowed coordinated euthanasia of over 700,000 hogs per week by the National Pork Producers Council, the largest hog farmers association in America. This could be seen as collusion to reduce the supply of live hogs, and yet it was deemed necessary to keep the pork industry afloat. Thus, it becomes clear the difficulty plaintiffs will have using coinciding actions to assert claims of collusion during crises.
The Jungle was authored by guest columnist, Sahithi Thumuluri, a senior at Dublin Jerome High School and a participant in the Ohio Attorney General’s Teen Advisory Board.