Chicken Prices and Chicken Shit

Defense lawyers go after Antitrust chief Jonathan Kanter for citing the 'Chickenshit Club.' It is a 'crass double-entendre,' they say, and an ethics violation for Kanter to talk like a normal human.

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Well, we knew it would happen, and it’s happening. The defense bar is hitting back at the new and aggressive antitrust enforcers. Two weeks ago, defense lawyers representing Pilgrim’s Pride executives on trial for price fixing broiled chicken filed a motion to embarrass Jonathan Kanter, the Biden administration’s Antitrust Division chief. The lawyers, coming from a Saturday Night Live parody array of fancifully named firms founded in the 1800s (O'Melveny & Myers, Reichman Jorgensen, Moore & Van Allen, Troutman Pepper), went after him because he defended the right of the Antitrust Division to aggressively take on criminal misdeeds by white collar executives. Kanter was selected by Biden and confirmed by the Senate in large part because there is a widespread belief that antitrust enforcement has been too meek.

Here’s the background. A few weeks ago, Kanter spoke at the Stigler Center at the University of Chicago. He said a number of fascinating things, including going after the consumer welfare standard, and noting that the Division had received over 5,000 comments from the public on how people want enforcers to interpret antitrust. (Yes, that’s us!) One of his key priorities is to bring normal people into the process by changing the language of enforcement so that antitrust isn’t the purview of fancy lawyers.

The whole speech is worth reading. But Kanter also took some questions on the DOJ’s results in several criminal cases, including one in which the jury couldn’t come to a decision over price-fixing in the chicken market. Tommaso Valletti, the former chief economist for the European Union, asked him about the ‘chickenshit problem,’ which is a well-known story about why prosecutors are not aggressive against white collar crooks. Here’s how I described it a few weeks ago.

In 2017, reporter Jesse Eisinger came out with a book with the best title about the Department of Justice’s sorry track record during the financial crisis. It was called “The Chickenshit Club: Why the Justice Department Fails to Prosecute Executives.” The title comes from a 2002 anecdote about James Comey, who was then running the lead prosecutorial unit in the prestigious Southern District of New York.

The story went as follows. Comey asked the assembled litigators which ones won every case. A bunch of hands went up, along with expectations of praise for what fine litigation skills their winning records implied. But Comey did not offer praise, instead he told them that a perfect record suggested not skill but cowardice. Attorneys who never lost cases were members of 'the Chickenshit Club,’ because such a record meant they were picking easy cases, rather than risking failure.

Eisinger used this metaphor to describe the collapse of justice and law in America over the course of forty years.

Kanter responded to Valetti’s question by saying “we’re not part of the chickenshit club.” The division, he said, is not going to back down even if they lose, because only by accepting losses will they have the courage to take on tough cases.

In response, lawyers for defendant poultry executives filed a motion asking for special rights to discredit more potential jurors in the jury selection process. His statements, they said, inflame the environment around this case and will taint the jury pool.

“Mr. Kanter justified his appearance in this Court and his decision to try this case a third time on the grounds that it was necessary to protect families struggling to afford groceries,” they said, but “Grocery prices, wage suppression, and data privacy have nothing to do with this case.” It’s hard to imagine a more direct impact on food prices than price-fixing around poultry, so this is a ridiculous comment. But the point, as we’ll see, is to enable an angry judge to sanction the DOJ.

They went on, arguing that “putting aside the crass double-entendre, the comment is designed to bolster public approval for aggressive criminal prosecution.” Again, this is more nonsense. The “Chickenshit Club” is well-known, and has nothing to do with chicken; in fact, Kanter was referencing an actual court loss in the dialysis market, not just the chicken price-fixing case, which was not actually a loss. So there’s no double-entendre. Every single Department of Justice official with any public profile in criminal matters official talks about the importance of vigorous criminal prosecution. That’s just part of the job. Kanter’s flaw, apparently, is that he did it in a way that is easy to understand.

There’s more, and it gets even dumber and more priggish.

“Worse, Mr. Kanter’s direction to his staff to listen to Tom Petty’s “I Won’t Back Down” and “dance like nobody’s watching” following unfavorable jury verdicts shows a startling disrespect for our criminal justice system, the defendants whose liberty is at stake, the families whose lives these trials upend, and the Department of Justice’s internal standards on prosecuting criminal cases.”

This is a stupid comment, because people who are overcharged for poultry are obviously harmed, so it’s not as if there aren’t serious stakeholders on both sides. That’s Kanter’s point, the victims of white collar crime are too often ignored, whereas white collar perpetrators get off scot-free. That said, it is true that Tom Petty’s “I Won’t Back Down” is a bad song that is now stuck in my head.

Finally, they argue that Kanter has violated rules of professional conduct.

“In his comments described above, Mr. Kanter instead has used the bully pulpit to send a message to the public trivializing the criminal process, politicizing the charged crimes, and attempting to shore up public support for failed prosecutions, including this one. These comments serve no legitimate law enforcement purpose and violate Colorado Rule of Professional Conduct 3.8(f).”

The idea that a bunch of jurors in Colorado would have heard the comments of a Justice Department official speaking at a conference in Chicago, covered by one niche trade outlet, is patently ridiculous. It’s part of the job for the AAG of the Antitrust Division to explain to antitrust lawyers how he thinks about the Division, so they can advise their clients. He was just doing that.

Defense attorneys are asking for the right to strike additional jurors from the jury pool, which they argue is now tainted. I bet they’ll get it, because the judge is mad that Kanter is demanding the right to bring the case a third time, after the jury couldn’t come to a decision the first two times. The bigger point here is to send a message. This is the kind of in-the-trenches nonsense that scares most public officials, fancy lawyers defending fancy executives and tossing garbage at anyone who dares stand up to them.

It’s been an ugly few months on the antitrust front. It’s going to get uglier, but such is the nature of political change. After ten years of intellectual and political work to force a rethink of antitrust, we have made enormous progress, but turning around a big ship like the U.S. government and economy takes a long time. We’re winning, but it won’t always feel like that. And this is one of those moments.