Egg Price Cartel Suit Rejected by Appeals Court

A failed class action alleging an industry-wide scheme to fix egg prices through “animal welfare” measures was properly tried under the rule of reason, which asks whether the restrictions were reasonable overall, the Third Circuit ruled Monday, June 22, rejecting a “per se” approach.

“Confronted with practices having far less certain motives and far more complicated economic consequences” than a naked price-fixing conspiracy, the district judge “quite rightly” applied the rule of reason, Judge Kent A. Jordan wrote for the court.

On December 12, 2019, in a case brought by 12 supermarkets, a Pennsylvania federal jury returned a verdict rejecting the supermarkets’ claims of conspiracy to reduce egg supply.

The plaintiffs were some of the largest grocery store chains in the United States, including Kroger and Giant Eagle, that had declined to join the previous class action case. Plaintiffs alleged Rose Acre Farms and two industry groups conspired with others in order to raise shell egg prices, including that the defendants created an animal-welfare program as a pretext to raise egg prices. After only a day and a half of deliberation, the jury found the plaintiffs failed to prove there was any conspiracy.

Full Content: Bloomberg

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