Litigators of the Week: Cracking the 10-Year Egg Antitrust Case
Antitrust class actions almost never go to trial. But three companies trusted their legal teams to get them through—and the lawyers delivered with an across-the-board win against some of the most prominent plaintiffs lawyers in the country.
June 22, 2018 at 09:45 PM
4 minute read
To make an omelet, you have to break a few eggs.
In this case, the eggs were the expectations of a class of buyers suing the country's leading hen farms for a billion-dollar payday. They claimed the egg producers conspired to manipulate the supply and raise prices for eggs. Previously, 10 of the 13 producers named in the suit cracked and settled the cases against them for roughly $150 million.
But thee legal teams convinced a federal jury in the Eastern District of Pennsylvania that their egg producer clients were not part of a vast conspiracy: Jim King's team from Porter Wright Morris & Arthur, representing Rose Acre Farms, Steven Bizar's team from Dechert, representing R.W. Sauder, and lawyers from Keating Muething & Klekamp representing Ohio Fresh Eggs.
After a 27-day trial, the jury handed up its defense verdict on June 14, concluding that Sauder and Ohio Fresh did not conspire to raise prices. As for Rose Acre the jurors found that the purported market restraints were reasonable and lawful.
The case was a complex one, a challenge for both lawyers to explain and jurors to comprehend. And preparing to go to trial in a decade-long case is no small feat in itself.
“It took a while,” King laughed.
But after reading through reams of documents and vast discovery, King had a clear picture of the direction he wanted the argument to go.
“The theme that we used in the opening was that actions speak louder than words,” he said. “That is, look at what Rose Acre did and not what others said they did. This was a conspiracy in which the plaintiffs said egg prices went up and supply went down.”
He continued, “This wasn't a company that was reducing anything—they were growing. At the end of the day that's what the jury found.”
That tack was a departure from Porter Wright's initial strategy, which was to argue that complying with animal welfare regulations that increased cage sizes for hens meant that the birds were more productive.
Bizar, like King, also took a cut-to-the-chase approach.
“The team felt it was important not to get so involved in antitrust law, and the economist's arguments, but to focus on things that would hit home with a juror,” Bizar said.
Bizar focused on dismantling the plaintiffs' theory that Sauder's export business meant that it was shipping product overseas to reduce the number of eggs in the U.S., thereby hiking the price.
U.S. Egg Marketers, an exporter, approaches member farms and offers their eggs for sale abroad. Sauder, while not a member, would contribute eggs several times a year.
“Eggs are seasonal…in terms of demand,” Bizar said. Sales peak during Thanksgiving, Christmas and Easter. Outside of the time surrounding those holidays, demand for eggs drops.
“To have enough demand to service your number of customers during those times of demand, you have to maintain the same number of hens year-round,” he said. “Sometimes you know you're going to have excess eggs, and you have to export the extras.”
Prior to the defense win for the three holdouts, the trend of the litigation bent toward settlement.
In 2016, defendant Midwest Poultry Services agreed to pay $2.5 million; National Food Corp. agreed to pay $1 million; United Egg Producers and United States Egg Marketers agreed to jointly pay $500,000; NuCal Foods agreed to pay $1.425 million; and Hillandale Farms agreed to pay $3 million, according to an opinion issued by presiding judge Gene E.K. Pratter at the time.
Cal-Maine Foods paid $28 million. Moark, Norco Ranch, and Land O'Lakes agreed to pay $25 million.
Then came a $75 million settlement from Michael Foods, a subsidiary of packaged food producing giant Post, last year.
Plaintiffs lawyers included Stephen Neuwirth of Quinn Emanuel Urquhart & Sullivan; Michael Hausfeld of Hausfeld; Stephen Susman of Susman Godfrey and Stanley Bernstein of Bernstein Liebhard.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllLitigator of the Week: A Long-Sought Win on Preemption for Monsanto at the Third Circuit
Litigators of the Week: Proskauer Scores a Defense Win for Last Defendant Standing in Broiler Chicken Antitrust Suit
Litigators of the Week: Covington Team Gets a Directed Verdict in First Trial Over Heavy Metals in Baby Food
Trending Stories
- 1Federal Judge Named in Lawsuit Over Underage Drinking Party at His California Home
- 2'Almost an Arms Race': California Law Firms Scooped Up Lateral Talent by the Handful in 2024
- 3Pittsburgh Judge Rules Loan Company's Online Arbitration Agreement Unenforceable
- 4As a New Year Dawns, the Value of Florida’s Revised Mediation Laws Comes Into Greater Focus
- 5Managing Partner Vindicated in Disciplinary Proceeding Brought by Former Associate
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250