Once again, Philadelphia federal district court judge Gene Pratter has clipped the wings of some of the country’s largest egg producers hoping to hatch their way out of multidistrict class action litigation over alleged price-fixing for eggs and egg products. And this time the judge got just a few dozen words into her 108-page decision before cracking her first chicken joke: She noted that the plaintiffs’ claims extend across 22 state jurisdictions, “considerably farther than a rooster’s most vigorous crows can be heard.”
Kidding aside, the ruling, issued on Tuesday, allows the majority of indirect purchaser claims in the MDL to move forward and marks another setback for the dozen-or-so defendants. Judge Pratter refused to dismiss most of the plaintiffs’ state law consumer protection and unjust enrichment claims, and she rejected the defendants’ arguments that the 26 named plaintiffs have no standing to bring antitrust claims under the laws of four states.
Like the direct purchaser plaintiffs in the MDL, the indirect purchasers allege that the egg producers and three industry groups conspired to fix egg prices by instituting mandatory cage-space and “molt and kill” programs to reduce hen populations and by agreeing to export eggs to low-cost foreign markets at a loss in order to deplete U.S. inventories. As we’ve reported, Judge Pratter refused to dismiss the direct purchasers’ claims against all but two of the defendants last September.
In their joint motion to dismiss the indirect purchaser claims, the egg producers argued that none of the named plaintiffs resided or purchased eggs in Iowa, Mississippi, North Dakota, and South Dakota, and therefore that they lacked Article III standing to assert antitrust claims under the laws of those states.
Judge Pratter disagreed, finding that “on their faces the four states’ statutory provisions can plainly be construed to not require in-state residency or an in-state purchase, but rather only that some of the Defendants’ conduct occurred, or the effects of which were felt, within the state.” She also found that the plaintiffs’ consumer protection and unjust enrichment claims met state-law guidelines in all but four states. (In all, the plaintiffs allege a federal Sherman Act claim for injunctive relief, 20 state antitrust claims, 9 state consumer protection claims, and 21 state unjust enrichment claims.)
We reached out to interim co-lead plaintiffs counsel Paul Novak of Milberg but didn’t hear back. The indirect purchasers are also represented by Lovell Stewart Halebian and Strauss & Boies. (Hausfeld, Bernstein Liebhard, and Susman Godfrey are co-lead counsel for the direct purchaser plaintiffs.)
The defense lineup includes Eimer Stahl Klevorn & Solberg (for Land O’Lakes, Moark LLC, and Norco Ranch); Weil, Gotshal & Manges (for Michael Foods); Pepper Hamilton (for United Egg Producers and related trade groups); Gibson, Dunn & Crutcher (for Cal-Maine Foods); Buchanan Ingersoll & Rooney (for Hillandale Farms); Dechert (for R. W. Sauder Inc.); Davis Wright Tremaine (for National Food Co.); Kasowitz Benson Torres & Friedman (for NuCal Foods); and Porter, Wright, Morris & Arthur (for Rose Acre Farms).
(Note: An earlier version of this story misidentified Vinson & Elkins as counel for Cal-Maine Foods; in fact the company is represented by Gibson, Dunn & Crutcher due to lateral partner moves. We regret the error.)
