Michael Foods Inc., and other breakers, won an important court decision in a long-running antitrust battle involving the U.S. egg industry.
On September 6, U.S. District Judge Gene E.K. Pratter dismissed claims from purchasers of products containing eggs, saying that they did not prove companies that allegedly conspired to raise egg prices unduly profited from egg product sales. The decision is part of an 8-year-old lawsuit claiming the U.S.’ leading egg producers conspired to use new welfare standards which included uniform hen spacing and housing standards to artificially reduce egg supply and hike egg prices.
Law360 reports the plaintiffs in the case argued Minnesota-based Michael Foods, the nation’s third largest egg company, and other egg producers created a shortage to raise the price of egg products. But, Pratter said, “The purchased egg products were made largely with eggs from nonconspirators, and without further analysis, it is impossible to tell if the defendants unduly profited from sales of the egg products.”
The decision means plaintiffs cannot recover damages for sales of products containing eggs made by non-defendants, according to Courthouse News. Michael Foods sold the plaintiffs most of the egg products involved in the case.
However, most of the eggs in Michael Foods purchased for its products came from outside suppliers not involved in the sprawling litigation as defendants and 72 percent of the eggs in those products were not produced as part of the United Egg Producers Certified program. Indiana-based Rose Acre Farms, Courthouse News reported, “bought as many as 21.6 percent of its eggs from outside suppliers, including non-defendants.”
Rose Acres’ attorney Donald Barnes told Courthouse News the company is "pleased with this important decision."
Law360 reported, in 2015, the judge certified a class of direct purchasers who bought whole eggs in the shell, but did not certify a class of those who purchased egg products nor a class of indirect purchasers.
In February, Pratter certified a class of shell egg purchasers consisting of “all purchasers of shell eggs produced from caged birds in the U.S. directly from the producer defendants from Sept. 24, 2004, through Dec. 31, 2008.”
“The direct purchasers have reached settlements with several of the defendants, including agreements with National Food Corp. for $1 million, Midwest Poultry Services LP for $2.5 million, United Egg Producers Inc. and U.S. Egg Marketers Inc. for $500,000, NuCal Foods Inc. for just over $1.4 million and Hillandale Farms Inc. for $3 million, according to court documents,” Law360 said.
In July 2013, Cal-Maine Foods Inc. agreed to pay a $28 million settlement to settle all direct purchaser class claims. At the time, CEO Dolph Baker said the company was confident it has been lawful at all times, and that the settlement would be in the company’s best interest long term.
