An appeal of a case in which Rose Acre Farms, was accused of conspiring with other egg producers to raise the price of eggs was recently denied by a federal court.
The United States Court of Appeals for the Third Circuit denied an attempt by a group of direct egg purchasers to revive the case against the egg producers.
In the suit, the plaintiffs claimed the egg companies conspired to reduce the egg supply in the United States and increase prices through adherence to a program that would give caged laying hens more space, according to a press release from Porter Wright, a law firm that represented Rose Acre Farms in the case.
Rose Acre prevailed in the case in June 2018, in which the jury found that while the company did participate in an agreement, its conduct was reasonable and was not in violation of antitrust laws.
In its appeal, the class of direct purchasers attacked the jury instructions and verdict form, claiming that the stricter “per se” standard applied. Under a per se standard, the challenged conduct would be presumed to be unreasonable. However, Porter Wright said it argued that how the plaintiffs described the challenged conduct does not control the analysis to be applied and the court properly instructed the jury to evaluate the conduct under the rule of reason. The Porter Wright team further argued that the type of analysis to be applied is decided by the court based on an evaluation of the conduct and does not depend on whether the jury concluded that an agreement existed.
The court agreed with Porter Wright’s assessment, and in its opinion, stated: “The whole point of the rule of reason it to recognize that there are agreements that restrain trade but do not do so unreasonably. That is the very conclusion the jury reached in this matter, after hearing five weeks of evidence and argument.”
The case dates back to 2008. Other companies were earlier targeted in the suit, including Cal-Maine Foods, National Food Corp., NuCal Foods, Michael Foods, Midwest Poultry Services (now MPS Egg Farms), Sparboe Farms, and Hillandale Farms. Most of those that reached settlements stated that they did so not as an admission of guilt, but rather to avoid the distractions of the litigation.
