The court acknowledged that the Chicken and Turkey Suits contained certain similarities, such as the use of the Agri Stats reports in making anticompetitive decisions “with the goal of coordinating production suppression to decrease supply.” Id. at *27. Those similarities, however, paled in comparison to the differences. “[W]hile many of the allegations in the turkey and chicken suits seem similar at first blush, they involve different acts, actors, decisions, markets, timing, and consequences. . . . [T]hey also involve different courses of conduct, different goals, and different resulting injuries.” Id. at *29.
The Cases at Issue Are Not “Related” Under California Law
The court considered at length the application of the term “related” under the definition given by California law. See id. at *36 (“Under California law, the plain meaning of ‘related’ encompasses both causal and logical connections. See Bay Cities, 855 P.2d at 1271, 1274; see also Fin. Mgmt. Advisors, LLC v. Am. Int'l Specialty Lines Ins. Co., 506 F.3d 922, 926 (9th Cir. 2007) (noting with approval the logical and causal connection explained in Bay Cities).”). After noting there were “no allegations, claims, facts, or other circumstances that suggest anything in the Chicken Antitrust Suits caused the actions and facts alleged in the Turkey Antitrust Suits,” the court examined any potential logical connections between the underlying conduct at issue in the cases. It cited prior decisions which had determined that acts are “logically related” when they are “part of a single course of conduct or a single plan” or cause “the same injury.” Id. at *36 (citing Liberty Surplus Ins. Corp. v. Samuels, 562 F. Supp. 3d 431, 441 (N.D. Cal. 2021) and Fin. Mgmt. Advisors, LLC v. Am. Int'l Specialty Lines Ins. Co., 506 F.3d 922, 926 (9th Cir. (Cal.) 2007)).
The cases that comprised the Chicken and Turkey Suits each specifically alleged the inelasticity of both types of poultry products and that “purchasers of each product either do not or cannot switch to other products.” The court concluded this evidenced that the cases “did not cause a single injury and were not motivated by a single goal.” Id. at *39.
Decision Guided by Analogous Eureka Case
Finally, the court turned to Eureka Fed. Sav. & Loan Asso. v. Am. Cas. Co., 873 F.2d 229 (9th Cir. (Cal.) 1989), which it described as the “most factually similar to the present case.” Id. at *43. Eureka determined that acts were not related when “‘there were numerous intervening business decisions that took place after the loan policy was initiated that required the exercise of independent business judgment.’” Id. at *43–44 (quoting Eureka, 873 F.2d at 235).
The court analogized the holding to the present facts, observing that “even if the use of Agri Stats to increase profitability constitutes the same general course of conduct with the same goal (it does not), . . . there are allegations of separate and unique business decisions made after the Agri Stats data was used. . . . [I]t is not the receipt of [the analytic service] reports that caused the alleged injuries but rather the decreased production—resulting from different business decisions—that was what ultimately increased prices for purchaser-plaintiffs.” Id. at *44–45.
This case teaches two important lessons. First, securing the right policy for the needs of a client is essential. This case would not have succeeded if not for Foster Farms’s foresight to include antitrust coverage despite its absence in ordinary D&O policies. Second, an insurer’s coverage assessment is routinely narrower than the law requires. Here, coverage counsel was able to highlight the key distinctions overlooked by Everest, which focused only on the superficial similarities before incorrectly concluding denial was appropriate.