Federal jury rules against egg producers

Court reaches decision favoring allegations that Cal-Maine Foods, Rose Acre Farms and two industry groups conspired to limit the supply of eggs.

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A federal jury ruled that Cal-Maine Foods, Rose Acre Farms, United Egg Producers and United States Egg Marketers took part in a conspiracy to restrict the supply of eggs and raise the price for purchasers.

However, at least one of the plantiffs said any adjustments in supply were made in response to demand for eggs raised in a way that is deemed better for the hens’ welfare.

The ruling was made in the case, Kraft Foods Global Inc. et al. v. United Egg Producers Inc. et al., Case No. 1:11-cv-880, on November 21 in the U.S. District Court for the Northern District of Illinois.

The suit was filed on behalf of Kraft Heinz Co. subsidiary General Mills Inc., Kellogg Co. and Nestle, with the case being filed in 2011. All three companies have committed to source only cage-free eggs.

The companies alleged that they likely overpaid for eggs because the two largest egg producers in the United States and the two industry organizations took part in a conspiracy to restrict supply between October 2004 and December 2008, Bloomberg Law reported.

The same jury is expected to decide the amount of damages for which the defendants would be held liable. Those court proceedings will begin on November 29 and are expected to last two days.

Cal-Maine Foods responds

In response to the court ruling, Cal-Maine Foods issued the following statement: "Approximately 20 years ago, Cal-Maine Foods along with many other fresh egg producers in the United States, responded to growing demands from consumers and retailers to improve the overall treatment of egg laying hens. These programs were in line with other prevailing animal welfare laws across the protein industry and were not intended to restrict supply and affect prices. The programs were supported by our customers and form the basis of many state laws across the country today. …

“While we are disappointed with the overall decision, we prevailed on a number of issues that we believe are important and should ultimately define this case. The plaintiffs alleged a conspiracy running from 1998-2008 with damages extending through 2012. The court and jury determined that any alleged damages would be limited to the period 2004-2008. The jury also rejected other key portions of the plaintiffs’ case that we believe should limit the plaintiffs’ damages request further.”

Cal-Maine also stated that it will contest the plaintiffs’ presentation of purported damages, and will continue to assess the decision and options for appeal.

Rose Acre Farms declined to comment until the court proceedings are concluded.

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