Court: 2015 Kraft-Heinz Merger Not Grounds for Last-Minute Transfer of Egg Antitrust Claims
U.S. District Judge Gene E.K. Pratter of the Eastern District of Pennsylvania said Heinz did not show how the transfer of the case to Illinois federal court would benefit judicial economy, particularly as trial fast approaches in the Pennsylvania litigation.
October 23, 2019 at 03:32 PM
3 minute read
Sometimes to make an omelette, you have to break a few eggs.
That appeared to be a federal judge's attitude in denying Heinz's request to transfer its case against egg-suppliers accused of a national price-fixing scheme. Heinz had pushed to have its claims moved to the U.S. District Court for the Eastern District of Illinois because that's where Kraft's claims are pending and the two are owned by the same parent company, thanks to a 2015 merger.
But U.S. District Judge Gene E.K. Pratter of the Eastern District of Pennsylvania said Heinz did not show how the transfer of the case to Illinois federal court would benefit judicial economy, particularly as trial fast approaches in the Pennsylvania litigation.
"With trial a little over a month away, Heinz no longer wanted its egg claim in the same basket as its fellow direct action plaintiffs," Pratter quipped in her Tuesday opinion.
She said Heinz wanted to "transfer its claim to the Northern District of Illinois, to be consolidated with the Kraft plaintiffs' action owned by the same parent company, The Kraft Heinz Company. Heinz argues that severing and transferring its claim would be judicially economic and convenient for the courts and parties involved. Because Heinz failed to adequately establish its need to sever and transfer its claim, its motion is denied."
Heinz is represented by Patrick Ahern in Chicago. Kraft Heinz did not respond to a request for comment.
Heinz and Kraft merged in 2015, and as a result became co-owners of each other's claims against the egg-producers, according to Pratter.
"Heinz brought this action over eight years ago and the Philadelphia trial will start in less than two weeks. Kraft and Heinz merged in 2015," Pratter said. "The Kraft and Heinz claims have independently coexisted for over four years since the merger. Whatever benefits Heinz may seek in trying the Kraft Heinz claims together was just as prevalent back then as it is now."
Pratter's denial of Heinz's request is the latest development in a long-running litigation.
In 2017, Pratter approved a $75 million settlement from Michael Foods, a subsidiary of packaged food producing conglomerate Post, to settle claims against it.
The settlement, reached nearly a dozen years ago, was given final approval Nov. 17, 2017. The class action, brought by direct purchasers and suppliers of eggs, continues against other defendants.
"The proposed settlement agreement is fair, reasonable, and adequate. Accordingly, the court grants plaintiffs' motion for final approval of the class action settlement with defendant Michael Foods," Pratter wrote in her 2017 opinion.
The class, which Pratter certified in September 2015, claims the nation's major egg producers were involved in a conspiracy to control and limit the supply of eggs in an effort to increase prices, allegedly through short-term production restrictions, such as slaughtering hens early, a pretextual animal welfare program and a "calculated" series of exports of eggs at below-market prices.
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