Victory for the egg industry

March 18, 2021

On March 15, the Third Circuit handed a hard-fought and well-deserved victory to the egg industry, affirming a 2019 jury finding of  no conspiracy among egg industry participants to reduce the supply of eggs. This was the second defense win in the same series of cases that the court has upheld on appeal.

More than ten years ago, several large national grocery stores sued United Egg Producers and United States Egg Marketers and several of the members of each. The plaintiffs alleged a conspiracy to reduce the supply of eggs through short-term recommendations like early slaughter and reduced chick hatch, the UEP Certified Program, which included increased cage space requirements for hens, and the USEM export program.

These cases were consolidated with others brought by both direct and indirect purchasers as multidistrict litigation in the Eastern District of Pennsylvania, overseen by Judge Gene Pratter, sitting in Philadelphia. In 2017, Rose Acre Farms, R.W Sauder and Ohio Fresh Eggs tried the first of these cases before a Pennsylvania jury and won.  The Third Circuit later upheld that victory on appeal.

In December 2019, after a second month-long trial involving three defendants, UEP, USEM and Rose Acre Farms, the jury found no alleged supply conspiracy. Therefore, the court entered judgment in the defendants’ favor.

The grocery stores appealed, claiming the court erred when instructing the jury on the elements of the conspiracy. Not so, said the Third Circuit earlier this week, finding that the court’s instruction “reflected both the case they tried and the law.”  The opinion can be found at In re Processed Egg Products Antitrust Litigation, Nos. 20-1045, 20-1127 (3d Cir., Mar. 15, 2021).  This was the second jury verdict in favor of defendants in the egg industry to be upheld on appeal.

At this juncture, only one case remains pending. That case, brought by Kraft and Nestle, is pending in Federal Court in Chicago.  The trial has been deferred indefinitely due to the COVID-19 pandemic.