United States District Court, W.D. Arkansas, Fayetteville Division
JONAH CHUNG, individually and on behalf of all others similarly situated PLAINTIFF
TYSON FOODS, INC.; DONNIE SMITH; and DENNIS LEATHERBY DEFENDANTS WILLIAM HUSER, individually and on behalf of all others similarly situated PLAINTIFF
TYSON FOODS, INC.; DONNIE SMITH; and DENNIS LEATHERBY DEFENDANTS PATRICIA LALONDE, individually and on behalf of all others similarly situated PLAINTIFF
TYSON FOODS, INC.; DONNIE SMITH; and DENNIS LEATHERBY DEFENDANTS HAROLD VOELLINGER, individually and on behalf of all others similarly situated PLAINTIFF
TYSON FOODS, INC.; DONNIE SMITH; and DENNIS LEATHERBY DEFENDANTS
OPINION & ORDER
TIMOTHY L. BROOKS UNITED STATES DISTRICT JUDGE
before the Court are motions to consolidate, appoint lead
plaintiffs, and approve lead counsel filed in the four cases
captioned above. For the reasons stated herein, the Court
CONSOLIDATES cases 16-cv-5354, 16-cv-5371, 16-cv-5362, and
16-cv-5340; APPOINTS as lead plaintiffs Employees'
Retirement System of the State of Hawaii ("Hawaii
ERS") and Blue Sky; and APPROVES as lead counsel Hawaii
ERS's and Blue Sky's choice of Bernstein Litowitz
Berger & Grossmann LLP ("Bernstein Litowitz").
in these cases were all shareholders of Tyson Foods, Inc.
("Tyson") during the time period from November 23,
2015 to November 18, 2016 (the "class
period"). Tyson is a publicly traded corporation
headquartered in Springdale, Arkansas that specializes in
producing chicken, beef, and pork products. Donnie Smith
served as the Chief Executive Officer of Tyson from November
of 2009 through June 13, 2016. Dennis Leatherby has been the
Chief Financial Officer of Tyson since June of 2008. The
allegations made by Plaintiffs in each suit are materially
identical for purposes of resolving the pending motions, and
require only a broad overview.
allege that Defendants violated the Securities Exchange Act
of 1934 by making certain misleading representations,
statements, and material omissions in Tyson's Securities
Exchange Commission ("SEC") filings, and elsewhere.
These alleged misrepresentations, in turn, supposedly caused
investors to incur substantial losses after the price of
Tyson's stock fell significantly. More specifically,
beginning with Tyson's November 23, 2015 SEC annual
report, and continuing with its quarterly reports through
August 8, 2016, Defendants made certain representations about
Tyson's financial condition, competition, and operations.
Defendants also made alleged misrepresentations on conference
calls with investors during this same time. Those statements,
according to plaintiffs, characterized the food industry as
being intensely competitive. They also attributed increased
margins in Tyson's chicken segment to certain operational
changes made by the company.
September 2, 2016, a company named Maplevale Farms, Inc.
filed a class action complaint against Tyson and several
other chicken producers in the Northern District of Illinois.
See Maplevale Farms, Inc. v. Koch Foods, Inc., et
al., No. 16-cv-08637 (N.D. III.) (Dkt. No. 1). The
complaint details a price-fixing conspiracy in the broiler
chicken industry, whereby the industry coordinated
to decrease production and correspondingly increase margins.
Following the Maplevale suit, eight other class
action complaints were filed against Tyson and other poultry
October 7, 2016, an analyst named Pivotal Research downgraded
Tyson's stock from "Hold" to "Sell, "
based on the allegations of price manipulation contained in
the Maplevale litigation. In response, shares of
Tyson fell $6.63, or 8.91%, to close at $67.75 on October 7.
As of that day, shares of Tyson had decreased by $8.69, or
11.37%, since Maplevale filed its class action complaint.
the cases currently before the Court, Huser,
16-cv-5371, and Chung, 16-cv-5354, were filed on
October 17, 2016, in the Central District of California and
the Southern District of New York, respectively. Plaintiffs
counsel in both cases published notice of the action, as
required by the Private Securities Litigation Reform Act
("PSLRA"), 15 U.S.C. § 78u-4(a)(3)(A), on that
same date. On November 28, 2016, Voellinger,
16-cv-5340, was filed in this Court, and four days later, on
December 2, 2016, Lalonde, 16-cv-5362, was filed in
the Southern District of Ohio. Huser, Chung, and
Lalonde have all since been transferred to this
December 16, 2016, the following parties filed motions for
appointment as lead plaintiff, approval of lead counsel, and
consolidation of the cases:
• Hawaii ERS and Blue Sky;
• John Schodowski and Lewis Miller; and
• Patricia Lalonde.
deadline for moving to be appointed as lead plaintiff has now
passed, see 15 U.S.C. § 78u-4(a)(3)(A)(i),
these motions are ripe for decision. After setting forth the
legal principles relevant to these motions, the Court will
first determine whether to consolidate the actions, and then
will turn to the appointment of lead plaintiffs and counsel.