## Facts

- The United States (DOJ Antitrust Division) and seventeen states filed a civil antitrust action in the Northern District of Illinois (Eastern Division) to enjoin JBS S.A.’s proposed acquisition of National Beef Packing Company, LLC.
- The case was docketed as **No. 08 C 5992** (also styled **08‑CV‑5992**) and assigned to **Judge Elaine E. Bucklo**. The complaint was filed **Oct. 20, 2008**, and DOJ later filed an **amended complaint on Nov. 7, 2008**.
- Plaintiffs included the **United States** and the states of **Arizona, Colorado, Connecticut, Iowa, Kansas, Minnesota, Mississippi, Missouri, Montana, New Mexico, North Dakota, Ohio, Oklahoma, Oregon, South Dakota, Texas, and Wyoming**.
- Defendants were **JBS S.A.** (a Brazil-based beef packer) and **National Beef Packing Company, LLC** (described as the fourth-largest U.S. beef packer).
- DOJ alleged that JBS had recently expanded in U.S. beef packing, including acquiring **Swift Foods Company** in 2007, and that JBS also had announced separate agreements in 2008 involving **Smithfield Beef Group, Inc.** and **Five Rivers Cattle Feeding, LLC** (through Smithfield). This federal-state suit targeted the **National Beef** transaction for injunctive relief.
- The amended complaint described National Beef as operating major beef packing plants in **Kansas** and **southern California**, and as processing primarily **fed cattle** (steers and heifers raised for high-quality beef).
- Plaintiffs’ competitive theories focused on:
  - **Upstream procurement**: competition among packers to purchase **fed cattle** from producers and feedlots in relevant geographic procurement areas.
  - **Downstream sales**: competition in the sale of **USDA-graded beef** (including “Choice,” “Select,” and “Prime”) to U.S. customers.
- Plaintiffs alleged the beef packing industry was already highly concentrated and that combining JBS’s U.S. packing assets with National Beef would reduce the number of significant rivals and heighten risks of higher beef prices and/or lower cattle prices.
- The case proceeded on an expedited track typical for merger challenges. During the litigation, non-parties **R-CALF** and **Organization for Competitive Markets** pursued a related private action and sought reassignment/consolidation; the United States opposed consolidation, arguing it would complicate and delay the government’s enforcement case.
- The parties later sought a **stay** to allow time to explore a potential settlement and to avoid the costs of ongoing discovery and third-party subpoenas.
- The proposed acquisition of National Beef ultimately **did not proceed**; JBS **abandoned** the transaction, and the case ended without a published merits decision.

## Issues

1. Whether JBS S.A.’s proposed acquisition of National Beef Packing Company, LLC “may be substantially to lessen competition” in violation of **Clayton Act § 7** (15 U.S.C. § 18), including in markets related to **fed-cattle procurement**.
2. Whether the proposed acquisition may substantially lessen competition in the sale of **USDA-graded beef** to U.S. customers by removing a major competitor and increasing concentration.
3. Whether the court should grant **preliminary and permanent injunctive relief** to prevent consummation of the transaction before a final merits determination.

## Decision

- Plaintiffs filed suit seeking **injunctive relief** to stop the proposed acquisition of National Beef by JBS under **Clayton Act § 7**.
- DOJ filed an **amended complaint** expanding or refining its factual allegations and competitive theories while continuing to seek to enjoin the acquisition.
- The case moved forward on an accelerated schedule, and the docket reflects procedural motion practice consistent with time-sensitive merger litigation (including disputes about consolidation with related private litigation).
- The parties requested and obtained a **stay** to allow settlement discussions and to avoid unnecessary discovery costs if the matter resolved without further litigation.
- JBS ultimately **abandoned** its proposed acquisition of National Beef, and the case concluded **without** a court-issued, reporter-published decision addressing market definition, competitive effects, or defenses.

## Legal Principles

- Section 7 of the Clayton Act prohibits acquisitions where the effect “may be substantially to lessen competition, or to tend to create a monopoly.”
- In merger cases, the government typically pleads a relevant **product market** and **geographic market**, and alleges likely anticompetitive effects based on factors such as increased **market concentration**, loss of head-to-head rivalry, and heightened risk of **coordinated conduct**.
- Antitrust harm can be alleged on both sides of the market:
  - **Downstream** harm to customers (e.g., higher prices or reduced output/quality for beef purchasers), and
  - **Upstream** harm to suppliers (e.g., reduced bidding competition among packers leading to lower prices paid to cattle producers).
- Because mergers can be difficult to unwind after closing, the standard remedy sought by enforcers is often **preliminary and permanent injunctive relief** preventing consummation.
- When a challenged transaction is **abandoned** while litigation is pending, the court may never reach a merits ruling; the public record may consist primarily of pleadings and procedural orders rather than a precedential opinion.

## Conclusion

United States v. JBS S.A., No. 08 C 5992, was a federal-state merger challenge filed in the Northern District of Illinois on Oct. 20, 2008, seeking to enjoin JBS’s proposed acquisition of National Beef under Clayton Act § 7 based on alleged harms in fed-cattle procurement and USDA-graded beef sales; the litigation was stayed during settlement discussions and ended without a published merits decision after the deal was abandoned.


United States v. JBS S.A., No. 08 C 5992 (N.D. Ill. filed Oct. 20, 2008)