Lawsuit accusing Cal-Maine of price gouging is dismissed

A lawsuit that accused Cal-Maine Foods of gouging the prices of eggs during the COVID-19 pandemic has been dismissed without prejudice.

Roy Graber Headshot
(perhapzz | Bigstock)
(perhapzz | Bigstock)

A lawsuit that accused Cal-Maine Foods of gouging the prices of eggs during the COVID-19 pandemic has been dismissed without prejudice.

The company’s motion to dismiss the suit was granted on August 13 in the District Court of Harris County, Texas.

“We are grateful the Court dismissed with prejudice all claims brought by the State of Texas against Cal-Maine Foods. As we demonstrated to the Court in our court filings and during oral argument, Cal-Maine Foods has never engaged in price gouging. Since 1957, we have strived to operate with honesty and integrity and will continue to do so going forward. We will also continue to do our part to help those affected by COVID-19 by having our employees follow applicable CDC guidelines and supporting the communities we serve through humanitarian efforts,” Cal-Maine Foods said in a statement.

The lawsuit was filed in April by Texas Attorney General Ken Paxton. In the filing, Paxton stated that after Gov. Greg Abbott declared a disaster due to the pandemic on March 13, the increased demand for eggs resulted in egg prices jumping 300%.

The lawsuit further stated: “On information and belief, Cal-Maine has not experienced any supply issues or other disruptions that are driving it to charge more for eggs. It is simply charging more because it can, or more specifically, because the pandemic caused market demand to jump.”

However, Cal-Maine Foods defended itself at the time, explaining that the domestic egg market is highly volatile, even under normal market circumstances.

“There has always been great volatility in the egg pricing market. The COVID-19 pandemic caused a massive disruption in every sector of the economy, including the egg industry. Retail demand for eggs reached historically high levels and egg prices increased significantly in line with those demand trends. However, egg prices have since declined quickly to pre-COVID-19 levels,” the company stated.

Mississippi-based Cal-Maine Foods is the largest egg company in the world. At the conclusion of 2019, the company had a flock of 44,986,300 laying hens.

Other lawsuits

While Cal-Maine has been cleared of price gouging allegations, similar lawsuits against other top egg companies in two other states remain on the books.

Earlier this month, New York Attorney General Letitia James filed a suit alleging Hillandale Farms was price gouging. The company denies the allegations and said it was prepared to defend itself in court, if necessary.

In July, West Virginia Attorney General Patrick Morrisey filed a lawsuit against Dutt & Wagner, accusing the Virginia egg producer of price gouging. Morrisey went on to file another lawsuit against North Carolina egg supplier Merchants Distributors LLC, with that suit, filed on August 11, including similar allegations.

View our continuing coverage of the coronavirus/COVID-19 pandemic.

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