Tyson Foods and Costco Wholesale Corp., the warehouse chain and huge seller of rotisserie chickens, are in a contractual dispute related to price-fixing allegations.
The nation's largest meat company on Thursday filed a complaint asserting that it was not obligated to arbitrate with Costco over damages linked to broiler chicken price inflation allegations between 2008 and 2019.
Costco accused Tyson of overcharging during that period and argues Tyson is obligated to arbitrate for losses under contractual agreements.
Tyson is seeking injunctive relief in Seattle federal court.
"A real and substantial controversy exists," attorneys with Tyson wrote in a 14-page complaint.
The dollar amount in question was not listed, but must exceed $75,000 to be in the court's jurisdiction.
A Tyson spokesman declined to comment.
The ongoing dispute between the chicken production industry and its customers has led to a number of criminal charges against poultry executives and hundreds of millions of dollars in settlement fees over allegations of conspiring to fix broiler chicken prices and rigging bids.
After a mistrial was declared in December, ten poultry executives who were indicted by a grand jury face a retrial in Denver federal court starting Tuesday.
In 2020, Tyson reached a settlement with direct buyers in Chicago federal court. The judge later approved it with a distribution plan for the proceeds, court records show.
Tyson notified shareholders in January 2021 that it would pay $221.5 million to settle claims for three groups of plaintiffs, including "end-user" consumers, commercial purchasers and direct buyers.
Costco opted out of the direct buyer settlement in May and filed another similar complaint in August that identified Tyson as a "non-defendant co-conspirator."
Four months later, Costco submitted a demand to the American Arbitration Association against Tyson with claims that mirror the allegations in Chicago federal court and seek damages, costs and attorneys' fees.
Costco asserted that Tyson is subject to arbitration as a condition of standard terms set in 2019 and a vendor agreement in 1995. Tyson argued that because the original agreement was not amended in writing and signed by an official from either company, the 2019 terms are not part of the contract in dispute, relieving Tyson from arbitration.
The two companies have struggled to find a middle ground in recent months, dickering over contractual nuances and what they are to do next.
Tyson sought injunctive relief from arbitration in Chicago federal court and was denied by the judge on Feb. 8. It is seeking relief again in Seattle federal court, located near the headquarters of Costco.
Shares of Tyson fell 1%, or 93 cents, to close Friday at $92.28 on the New York Stock Exchange.