Farmers ask Eighth Circuit to revive antitrust claims against ag giants over e-commerce boycott

ST. LOUIS (CN) — A group of farmers asked the Eighth Circuit on Tuesday to revive their antitrust claims against Bayer CropScience and 15 other agricultural manufacturers.

The group of 28 farmers filed a consolidated class action in September 2021, claiming the defendants drove up prices by boycotting e-commerce competitors that market directly to farmers in favor of their tightly controlled distribution system.

Last year, U.S. District Judge Sarah Pitlyk dismissed the farmers’ claims with prejudice, prompting the appeal to the Eighth Circuit. Pitlyk, a Donald Trump appointee, found that they failed to assert parallel conduct, that the claims were largely conclusory and that the manufacturers avoided e-commerce competitors based on independent business decisions rather than a conspiracy.

Sarah Sterling Aldridge, representing the farmers from Barrett Law Group out of Lexington, Mississippi, argued that the lower court errored in its dismissal by reading the complaint as a whole, by requiring proof over plausibility and by treating claims against individual defendants in a vacuum rather than as part of a larger conspiracy.

“These errors matter because they let an industrywide boycott go unchecked, one that if proven left farmers with higher prices and fewer options,” Aldridge told the three-judge panel. “Each defendant acted similarly by refusing to supply e-commerce platform, forcing them out of the market. This conduct was not the product of independent business decisions.”

U.S. Circuit Judge Ralph R. Erickson, a Trump appointee, questioned Aldridge about the specific nature of the agriculture market.

“The defendants as a whole have captured 95% plus of the market,” Erickson said. “And prudently, you could look at it and say, to move market share at that point seems to be very difficult.”

Defendants’ attorney Sharon Rosenberg, of Thompson Coburn, jumped on that point during her argument.

Rosenberg said that the U.S. Supreme Court has previously held “that resisting competition is routine market behavior and that there’s no reason to infer an agreement from companies doing what is natural.”

The heart of both sides’ arguments was based on the Supreme Courts’ 2007 decision in Bell Atlantic Corp. v. Twombly , which established that parallel conduct, absent evidence of agreement, is insufficient to sustain an antitrust action under the Sherman Act. The ruling also heightened the pleading requirement for federal civil cases by requiring plaintiffs to include enough facts in their complaint to make their claims plausible, not just possible or conceivable.

“Courts must be reasonably aggressive in weeding out meritless antitrust claims at the start, and the way it was described in Twombly , was that … the cost of discovery in antitrust cases is massive,” Rosenberg said. “It’s frankly not like other cases, and it becomes the point where even anemic allegations can become extortionary, given the high cost.”

Aldridge countered in her rebuttal by saying that courts must be careful not to embellish Twombly .

“Twombly requires a short and plain statement to put the defendants on notice of what the claims against them are, and that’s what we’ve done here, and we would ask the court reverse and sign that the complaint positively suggests a conspiracy to boycott e-commerce competition,” Aldridge said.

The farmers, in their brief, argue that Pitlyk applied a more stringent summary judgment standard compared to the correct Twombly standard, which requires the court to accept plaintiffs’ claims as true and draw all reasonable inferences in their favor.

Defendants, in their brief, claim the dismissal was justified.

“Instead of the required parallel conduct, plaintiffs allege a hodgepodge of disparate, unilateral acts by only some of the 16 defendants, at different points in time,” the agricultural manufacturers say.

The defendants include Bayer CropScience LP, Bayer CropScience Inc., Corteva Inc., Cargill Incorporated, BASF Corporation, Syngenta Corporation, Winfield Solutions LLC, Univar Solutions USA LLC., Federated Co-Operatives Ltd., CHS Inc., Nutrien AG Solutions Inc., Growmark Inc., Simplot AB Retail Sub Inc., Tenkoz Inc., Pioneer Hi-Bred International Inc. and Growmark FS LLC.

U.S. Circuit Judges Steven M. Colloton and Bobby E. Shepherd, both George W. Bush appointees, rounded out the panel, which took the arguments under advisement. There is no timetable for a decision.

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