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In Re: Processed Egg Products Antitrust Litigation

September 26, 2011

IN RE: PROCESSED EGG PRODUCTS ANTITRUST LITIGATION


The opinion of the court was delivered by: Gene E.K. Pratter, J.

THIS DOCUMENT APPLIES TO: ALL ACTIONS

MEMORANDUM

I. Introduction

This multidistrict litigation concerns an alleged conspiracy by egg producers and trade groups to restrict the domestic supply of eggs in violation of Section 1 of the Sherman Act. A half dozen motions to dismiss await resolution.*fn1 The movants seek to dismiss the claimed antitrust violation asserted against them individually in the direct purchaser plaintiffs' Second Consolidated Amended Class Action Complaint (hereinafter, the "SAC") for not meeting the grade. They argue that the SAC is like a curate's egg: although the pleading arguably may have alleged sufficient facts in support of the antitrust conspiracy claim as to some defendants, the pleading is deficient with respect to each of the movants by failing to allege facts that they specifically were parties to the conspiracy. Cracking each motion ad seriatim, the Court grants the motions of Hillandale Gettysburg L.P., Hillandale Farms Inc., and Hillandale Farms East, Inc. (collectively, the "Hillandale Entities"), and United Egg Association, and denies the remainder of the motions addressed in this Memorandum.*fn2

II. Background

The Plaintiffs are direct purchasers of domestic eggs,*fn3 who brought suit in a number of jurisdictions, charging that defendant egg producers and trade groups engaged in a conspiracy to manipulate the supply of, and thereby fix prices for, domestically-sold eggs. The Judicial Panel on Multidistrict Litigation centralized the actions for coordinated pretrial proceedings before this Court. At the present stage, the SAC is the operative pleading for the direct purchaser plaintiffs, replacing or superceding all of the previously-filed individual and consolidated complaints. The various named Defendants responded to the SAC by answers or motions to dismiss, or, in some specific respects, both. The six motions at bar have been fully briefed and illuminated by oral argument*fn4 and the parties' submissions of supplemental authorities they wished to bring to the Court's attention. The Court commends all of the attorneys for their stimulating advocacy.

III. Factual Allegations

Given the complexity of, and level of nuanced detail provided in, the SAC concerning the Defendants' alleged conduct, the industry structure and practices, and market implications, the Court limits the discussion to the SAC's core allegations.*fn5

Plaintiffs articulate their legal theory as follows:

Plaintiffs allege herein a conspiracy among Defendants and certain unnamed co-conspirators where they agreed to fix, raise, maintain and/or stabilize the prices at which shell eggs and egg products (collectively, "eggs") were sold in the United States, including by controlling the aggregate supply of domestic eggs. Each Defendant knew that it could not do this by itself and that supply needed to be "restrained" by collective action. Thus, Defendants entered into an overarching agreement to manage the aggregate supply of eggs in the United States. During the Class Period [from January 1, 2000 to present], Defendants implemented this supply management conspiracy by agreeing to take several coordinated actions.

SAC ¶¶ 1, 481.*fn6

Specifically, Plaintiffs list eight alleged "collective actions" undertaken by Defendants to advance the purported "overarching conspiracy" to manipulate the supply of eggs thereby affecting the price of eggs. See id. ¶¶ 11-18. Those eight actions allegedly enhanced the conspiracy by, in and of themselves, altering the supply and, hence, the price, of eggs.

Plaintiffs claim that the first collective action took place in 1999 and 2000 when Defendants established a "supply adjustment program." Through this program participants agreed to engage in an immediate five-percent flock molt, a five-percent reduction of flock inventory in the ensuing six to twelve months, and the development of a hatch reduction program. Id. at ¶¶ 11, 187-89.

The second collective action allegedly involved the Defendants agreeing to a five-percent emergency flock reduction in 2001. Id. at ¶¶ 12, 195.

The third action occurred in 2002 when Defendants developed and undertook an early molt and hen disposal plan. Id. at ¶¶ 13, 198-200.

The fourth collective action involved Defendants agreeing to adopt guidelines on cage space densities for hens. These guidelines were part of an "animal husbandry" or "animal welfare" program that became known as the "United Egg Producers Certification Program" (hereinafter, the "UEP Certification Program" or the "Program"). Id. ¶ 14. By complying with the guidelines, producers could sell "UEP-certified eggs" and affix a logo on packages to reflect that the eggs were certified under the Program. Id. ¶¶ 82, 310. The Program figures prominently in the Plaintiffs' claims and is discussed in greater detail below.

The fifth alleged collective action involves the execution of an early molt and flock disposal plan in mid-2004. Id. ¶ 15.

For the sixth collective action, Plaintiffs claim that Defendants held an "Egg Industry Economic Summit" to coordinate an immediate supply reduction scheme via a written commitment to reduce supply. See id. ¶¶ 16, 288-93. The SAC appears to quote without citation the purported language on this "commitment sheet": "Option #1 To dispose of hens that are currently scheduled for disposal between January 1 and April 30, 2005 four (4) weeks earlier than previously scheduled;" or "Option #2 To reduce their December 1, 2004 flock size by 5% between the dates of January 1 through April 30, 2005." Id. ¶ 290; see also id. ¶ 293.

As part of the seventh collective action, according to Plaintiffs, Defendants required through the UEP Certification Program "that a company must commit to implementing the welfare guidelines on 100% of all production facilities." Id. ¶ 17. Specifically, the requirement was "that 100% of a producer's egg houses . . . be maintained in accordance with the [UEP Certification Program] guidelines in order for a company to sell 'UEP Certified' eggs." Id. ¶ 222.

Finally, the alleged eighth action was an export program. Plaintiffs claim that Defendants allegedly agreed to export eggs at a loss in order to lower supply in the United States, and they agreed to reimburse each other to cover those losses. Id. ¶¶ 18, 329, 333-34.

As described by Plaintiffs, the Defendants' trade groups, United Egg Producers ("UEP"), United Egg Association ("UEA"), and United States Egg Marketers ("USEM"), who are also named Defendants, were central to this conspiracy. Defendant egg producers' memberships and participation in those trade groups allegedly facilitated the Defendants' "collective actions" that advanced the conspiracy.

Under the Plaintiffs' theory, through their "collective actions" Defendants sought to raise the price of eggs by capitalizing on certain market conditions particular to the domestic egg market. In particular, Plaintiffs charge that Defendants' objective was to take advantage of consumers' relatively inelastic demand for eggs, as well as the fact that eggs are commodities and have no market substitutes. Id. at ¶¶ 6, 152-56, 158. Defendants' actions were supposedly prompted by a desire to stabilize the egg market's volatile prices and supply. Prior to Defendants' coordinated actions, supply allegedly was cyclical, depending on the increase or decrease of prices in the egg market. Id. at ¶ 7. Recognizing the market volatility and its impact on the industry and producers, Defendants allegedly pursued the coordinated actions to increase egg prices.

According to Plaintiffs, the Defendants' conduct purportedly achieved the desired outcome by decreasing egg production, thereby decreasing the supply of eggs and leading to increased egg prices. Plaintiffs point to various increases in egg prices from 2003 to 2009 and attribute those increases to reduced supply, claiming such a result is the ill-gotten product of the Defendants' conspiratorial conduct. See, e.g., id. ¶¶ 162-63, 166-70, 367, 369, 375, 377. Defendants, who were both shell egg and egg products producers, supposedly benefited from the overall reduced supply of eggs. Id. ¶ 408. Those Defendants who were egg products producers allegedly benefited by being able to market their egg products at an artificially increased price, even though they purchased shell eggs at inflated prices. Id. ¶ 409.

The Defendants, of course, have an entirely different take on the events recounted in the SAC, so much so that many of the Defendants challenge the sufficiency of the allegations in the SAC even while tacitly acquiescing in the continuation of the core of Plaintiffs' claim at least beyond the Rule 12(b)(6) stage.

IV. Legal Standards

A. Motion to Dismiss Standard

As is well acknowledged, a Rule 12(b)(6) motion tests the sufficiency of a complaint. Conley v. Gibson, 355 U.S. 41, 45-46 (1957). Rule 8 of the Federal Rules of Civil Procedure requires only "a short and plain statement of the claim showing that the pleader is entitled to relief," in order to "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (alteration in original) (quoting Conley, 355 U.S. at 47). Nonetheless, a plaintiff must provide "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. (citation omitted). Specifically, "[f]actual allegations must be enough to raise a right to relief above the speculative level." Id. The question is not whether the claimant will ultimately prevail but whether the complaint is "sufficient to cross the federal court's threshold." Skinner v. Switzer, 131 S. Ct. 1289, 1296 (2011) (citation omitted).

To survive a motion to dismiss, a civil complaint must allege "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009); see also Matrixx Initiatives, Inc. v. Siracusano, 131 S. Ct. 1309, 1323 (2011). In essence, this is equivalent to the math teacher's admonition to "show your work" to explain the proffered answer. The complaint need allege "only enough facts to state a claim of relief that is plausible on its face" so as to test whether "plaintiffs . . . have . . . nudged their claims across the line from conceivable to plausible." Twombly, 550 U.S. at 570. In other words, there needs to be "enough fact to raise a reasonable expectation that discovery will reveal evidence of illegal[ity]." In re Ins. Brokerage Antitrust Litig., 618 F.3d 300, 319 (3d Cir. 2010) (alteration in original) (quoting Arista Records, LLC v. Doe 3, 604 F.3d 110, 120 (2d Cir. 2010)). Certainly, such an assessment of the sufficiency of a complaint is "a context-dependent exercise" because "[s]ome claims require more factual explication than others to state a plausible claim for relief." W. Penn Allegheny Health Sys., Inc. v. UPMC, 627 F.3d 85, 98 (3d Cir. 2010) (citations omitted).

The applicable pleading standard also requires adherence to certain well-recognized parameters. For one, the Court "must consider only those facts alleged in the complaint and accept all of the allegations as true." ALA, Inc. v. CCAIR, Inc., 29 F.3d 855, 859 (3d Cir. 1994) (citing Hishon v. King & Spalding, 467 U.S. 69, 73 (1984)); see also Twombly, 550 U.S. at 589 (stating that courts must assume that "all the allegations in the complaint are true (even if doubtful in fact)"). Concomitantly, the Court must also accept as true all reasonable inferences that may be drawn from the allegations, and view those facts and inferences in the light most favorable to the non-moving party. Revell v. Port Auth. of N.Y. & N.J., 598 F.3d 128, 134 (3d Cir. 2010), cert. denied, 131 S. Ct. 995 (2011); Rocks v. Philadelphia, 868 F.2d 644, 645 (3d Cir. 1989).

Nonetheless, the Court need not accept as true "unsupported conclusions and unwarranted inferences," Doug Grant, Inc. v. Greate Bay Casino Corp., 232 F.3d 173, 183-84 (3d Cir. 2000) (quoting City of Pittsburgh v. W. Penn Power Co., 147 F.3d 256, 263 n.13 (3d Cir. 1998)), or the plaintiff's "bald assertions" or "legal conclusions," Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997). Finally, in considering a pleading's sufficiency, "a court must consider only the complaint, exhibits attached to the complaint, matters of public record, as well as undisputedly authentic documents if the complainant's claims are based upon these documents." Mayer v. Belichick, 605 F.3d 223, 230 (3d Cir. 2010) (citing Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993)), cert. denied, 131 S. Ct. 1607 (2011).

While the foregoing discussion is familiar enough legal terrain-especially for the accomplished advocates involved in this litigation-given what follows in this opinion, it bears recounting the standards against which the pending motions and the SAC must be judged.

B. Application of Pleading Standard to Sherman Act § 1 Claims

Under § 1 of the Sherman Act, "[e]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal." 15 U.S.C. § 1. The Third Circuit Court of Appeals has held that in order to sufficiently plead a Sherman Act Section 1 claim "two essential requirements" must be satisfied. Ins. Brokerage, 618 F.3d at 315. "First, the plaintiff must show that the defendant was a party to a 'contract, combination . . . or conspiracy,'" and second, "that the conspiracy to which the defendant was party imposed an unreasonable restraint on trade."

Id. (citations omitted).

Ultimately, under the conventional Third Circuit case law, a plaintiff seeking to establish a Section 1 claim must prove: "(1) concerted action by the defendants; (2) that produced anticompetitive effects within the relevant product and geographic markets; (3) that the concerted actions were illegal; and (4) that it was injured as a proximate result of the concerted action." Gordon v. Lewistown Hosp., 423 F.3d 184, 207 (3d Cir. 2005) (citing Petruzzi's IGA Supermarkets, Inc. v. Darling-Delaware Co., 998 F.2d 1224, 1229 (3d Cir. 1993) and Big Apple BMW, Inc. v. BMW of North Am. Inc., 974 F.2d 1358, 1364 (3d Cir. 1992)); see also Ins. Brokerage, 618 F.3d at 315 n.9 (recognizing that in addition to the "two essential requirements" plaintiffs must also prove two other elements relating to antitrust injury).

Considerable focus at the pleadings stage in antitrust suits-and particularly the present suit, given the motions at bar-is directed to the "crucial question" of whether "the challenged anticompetitive conduct stem[s] from independent decision or from an agreement, tacit or express" because Section 1 "does not prohibit [all] unreasonable restraints of trade . . . but only restraints effected by a contract, combination or conspiracy." Twombly, 550 U.S. at 553 (alterations in original) (internal quotation marks omitted); see also Ins. Brokerage, 618 F.3d at 315 (stating that the "existence of an agreement is the hallmark of a Section 1 claim"); Gordon, 423 F.3d at 207 ("The essence of a Section 1 claim is the existence of an agreement." (citing Mathews v. Lancaster Gen. Hosp., 87 F.3d 624, 639 (3d Cir. 1996)). In Sherman Act litigation, an agreement is "sometimes also referred to as a 'conspiracy' or 'concerted action.'" W. Penn Allegheny, 627 F.3d at 99 (citing Twombly, 550 U.S. at 553; Gordon, 423 F.3d at 207 & n.16).

To fend off a motion to dismiss, plaintiffs must plead "enough factual matter (taken as true) to suggest than an agreement was made." Twombly, 550 U.S. at 556. "[I]f a plaintiff expects to rely exclusively on direct evidence of conspiracy, its complaint must plead 'enough fact to raise a reasonable expectation that discovery will reveal' this direct evidence" of illegality. Ins. Brokerage, 618 F.3d at 324 (quoting Twombly, 550 U.S. at 556). "[I]f the plaintiff alternatively expects to rest on the circumstantial evidence of parallel behavior, the complaint's statement of facts must place the alleged behavior in 'a context that raises a suggestion of a preceeding agreement, not merely parallel conduct that could just as well be independent action.'" Id. (quoting Twombly, 550 U.S. at 557).

For example, allegations of merely parallel conduct and a "bare assertion of conspiracy" would be insufficient under the requisite pleading standard, because "[w]ithout more, parallel conduct does not suggest conspiracy, and a conclusory allegation of agreement at some unidentified point does not supply facts adequate to show illegality." Twombly, 550 U.S. at 556-57.*fn7 "Twombly makes clear that a claim of conspiracy predicated on parallel conduct should be dismissed if 'common economic experience,' or the facts alleged in the complaint itself, show that independent self-interest is an 'obvious alternative explanation' for defendants' common behavior." Ins. Brokerage, 618 F.3d at 326. However, when a pleading alleges circumstantial facts, the pleading standard does not require consideration of "whether the circumstantial evidence . . . is sufficient to compel an inference of conspiracy; . . . [instead,] the test for whether to dismiss a case at [the pleading] stage turns on the complaint's 'plausibility.'" Text Messaging, 630 F.3d at 629 (emphasis in original).

The concept of agreement, implicit or explicit, is also central to the inquiry of whether a complaint is sufficient with respect to an individual defendant in an antitrust conspiracy case. Here, as is true in many of these cases, in order to address the meat of a motion to dismiss, the key question is whether the SAC sufficiently alleges that the moving defendant joined the alleged agreement, conspiracy, or concerted action.

To evaluate the articulated allegations as to an individual defendant in the context of a multi-defendant, multi-faceted conspiracy, the conspiracy must not be "compartmentalized." The "character and effect of [the] conspiracy are not to be judged by dismembering it and viewing its separate parts, but only by looking at it as a whole." Continental Ore Co. v. Union Carbide & Carbon Corp., 370 U.S. 690, 699 (1962); see also Jung v. Ass'n of American Med. Colls., 300 F. Supp. 2d 119, 160 (D.D.C. 2004) (recognizing the same and that this "maxim has been applied in a variety of contexts, including in consideration of motions to dismiss"); In re Pressure Sensitive Labelstock Antitrust Litig., 566 F. Supp. 2d 363, 373 (M.D. Pa. 2008) ("[A] district court must consider a complaint in its entirety without isolating each allegation for individualized review."); In re Blood Reagents Antitrust Litig., 756 F. Supp. 2d 623, 630-31 (E.D. Pa. 2010) ("Defendants' briefing attempts to dismember plaintiffs' Complaint in order to show how each allegation, in isolation, fails to sufficiently aver plausibility. However, . . . the allegations in the Complaint must be viewed as a whole. . . . Twombly emphasized context." (citations omitted)); cf. Petruzzi's, 998 F.2d at 1230 ("[A] court should not tightly compartmentalize the evidence put forward by the non-movant, but instead should analyze it as a whole to see if together it supports an inference of concerted action." (citation omitted)). In this regard, the Court is mindful of the parable of the blind men and the elephant in which a group of blind men try to agree on a description of an elephant solely on the basis of their own, individual limited perception, leading one (having felt only the tail) to assert that an elephant is rope-like, another (having felt only an ear) to declare that an elephant is a living fan, another (having felt only a leg) to describe the beast like a tree, another (having felt only a tusk) declaring an elephant to be a smooth, hard cone and so forth.

Similarly, courts have held that antitrust conspiracy allegations need not be detailed on a defendant-by-defendant basis. See, e.g., In re OSB Antitrust Litig., No. 06-826, 2007 WL 2253419, at *5 (E.D. Pa. Aug. 3, 2007) ("Antitrust conspiracy allegations need not be detailed defendant by defendant."); In re TFT-LCD (Flat Panel) Antitrust Litig., 586 F. Supp. 2d 1109, 1117 (N.D. Cal. 2008) (acknowledging that a "complaint need not contain detailed 'defendant by defendant' allegations"). Individual defendants must have reasonable, not exhaustive, notice of the allegations, and such notice is achieved when the plaintiff states a plausible claim for relief against those defendants. See, e.g., OSB, 2007 WL 2253419, at *6 (citing In re Elec. Carbon Prods. Antitrust Litig., 333 F. Supp. 2d 303, 313-14 (D.N.J. 2004)); see generally Twombly, 550 U.S. at 555 (discussing fair notice of a claim to a defendant).

To provide reasonable notice to a specific defendant of the claim(s) against it, a complaint must plausibly suggest that the individual defendant actually joined and participated in the conspiracy. See OSB, 2007 WL 2253419, at *5 ("[T]he plaintiff must allege that each individual defendant joined the conspiracy and played some role in it."); Jung, 300 F. Supp. 2d at 161 (recognizing a plaintiff's "burden of adequately alleging that a conspiracy to restrain trade existed in the first instance and that each defendant knowingly joined or agreed to participate in the conspiracy"); Flat Panel, 586 F. Supp. 2d at 1117 (acknowledging that "the complaint 'must allege that each individual defendant joined the conspiracy and played some role in it because, at the heart of an antitrust conspiracy is an agreement and a conscious decision by each defendant to join it.'" (quoting Elec. Carbon, 333 F. Supp. 2d at 311-12)); In re Static Random Access Memory (SRAM) Antitrust Litig., 580 F. Supp. 2d 896, 904 (N.D. Cal. 2008) ("[Plaintiffs] now [at the motion to dismiss stage] only need to make allegations that plausibly suggest that each Defendant participated in the alleged conspiracy.").

At the same time, plaintiffs need not "plead each defendant's involvement in the alleged conspiracy in elaborate detail." Flat Panel, 586 F. Supp. 2d at 1117. Likewise, "[a]ntitrust law has never required identical motives among conspirators, and even reluctant participants have been held liable for conspiracy." Spectators' Commc'n Network Inc. v. Colonial Country Club, 253 F.3d 215, 221 (5th Cir. 2001) (citing Fineman v. Armstrong World Indus., Inc., 980 F.2d 171, 212 (3d Cir.1992)); see also Petruzzi's, 998 F.2d at 1243 (recognizing that for an antitrust conspiracy, "defendants need not share the same motive. Rather, all that is required is that they each have a motive to conspire").

Instead, a plaintiff's pleading burden is to offer allegations that plausibly suggest that the defendant agreed to the conspiracy, which, in the antitrust context, is a conscious commitment to a common scheme designed to achieve an unlawful objective. See Ins. Brokerage, 618 F.3d at 315 ("[T]he plaintiff must show that the defendant was a party to a 'contract, combination . . . or conspiracy' . . . . in other words, a 'unity of purpose or a common design and understanding or a meeting of minds' or 'a conscious commitment to a common scheme.'" (citations omitted) (internal quotation marks omitted)); Jung, 300 F. Supp. 2d at 158 (recognizing that "plaintiffs must allege 'that the challenged restraint is not the result of independent actions by the defendants,' but rather that 'the defendants consciously committed to a common agreement of an unreasonable restraint on trade'" (citations omitted)). In short, the issue is whether the pleading delineates to some sufficiently specific degree that a defendant purposefully joined and participated in the conspiracy.

The Court properly looks for more than mere repetitive generic reference to "Defendants" tacked on to a conclusory verb form to connect an individual defendant to an actual agreement in an antitrust conspiracy. "Simply using the global term 'defendants' to apply to numerous parties without any specific allegations that would tie each particular defendant to the conspiracy is not sufficient." Elec. Carbon, 333 F. Supp. 2d at 312 (internal quotation marks omitted); see also In re Travel Agent Comm'n Antitrust Litig., 583 F.3d 896, 905 (6th Cir. 2009), cert. denied sub nom., TAM Travel, Inc. v. Am. Airlines, Inc., 131 S.Ct. 896 (2011) (rejecting plaintiffs' "attempt to implicate" certain defendants who are not "mentioned in the body of the Amended Complaint," and with respect to whom plaintiffs fail to "specify how [they] are involved in the alleged conspiracy," by "relying on several vague allegations contained in the Amended Complaint that refer to 'defendants' or 'defendants' executives'"); In re Digital Music Antitrust Litig., No. 06 MD 1780, 2011 WL 2848195, at *20 (S.D.N.Y. July 18, 2011) (recognizing that "generic references to 'defendants'" are "insufficient" in alleging direct involvement of individual defendants in the alleged conspiracy); Jung, 300 F. Supp. 2d at 163 ("Plaintiffs cannot escape their burden of alleging that each defendant participated in or agreed to join the conspiracy by using the term 'defendants' to apply to numerous parties without any specific allegations as to [an individual defendant]." (citing Invamed, Inc. v. Barr Labs., Inc., 22 F. Supp. 2d 210, 221 (S.D.N.Y. 1998)). Conclusory, collective language is too convenient, too undisciplined, and too unfocused in light of exposures to litigation expense and disruption (even without ultimate liability) that are so great in antitrust (and other) cases. Such exposure ought to be limited to those who have been made at least reasonably aware of what they have done or failed to do, lest the litigants be left to wander aimlessly through the wilds and wilderness of discovery to no ultimate destination. See Twombly, 550 U.S. at 565 n.10(recognizing that "a defendant seeking to respond to . . . allegations in the § 1 context would have little idea where to begin" when a complaint fails to give notice of the claims against it); In re Fla. Cement & Concrete Antitrust Litig., 746 F. Supp. 2d 1291, 1318 n.23 (S.D. Fla. 2010) (observing that when allegations are "specific enough," they can "reduce the enormous discovery burden that concerned the Supreme Court in Twombly").

V. Legal Discussion*fn8

For the present motions, because Plaintiffs assert a theory of, in their words, an "overarching conspiracy" to restrict the supply of eggs, the question that each motion raises is8 whether Plaintiffs adequately alleged particularized facts that each Defendant undertook certain acts, or engaged in certain conduct, when viewed in the context of the entire SAC, that plausibly suggest that particular Defendant's embrace of that overarching conspiracy. Thus, the extent to which Plaintiffs have met their burden under Rule 12(b)(6) as to each movant is now addressed.

A. Michael Foods' Motion to Dismiss

Michael Foods, Inc. claims that the SAC's specific allegations are insufficient to plausibly support the claim against it. According to Michael Foods, the "only factual allegations made against it with any degree of specificity" are that the company was a member of two defendant trade groups, UEP and UEA; that Michael Foods attended UEP and UEA meetings; and that Michael Foods partook in only one of the eight "coordinated actions" alleged to have advanced the overarching conspiracy-namely, joining the UEP Certification Program. Michael Foods Mot. at 4.*fn9 These allegations, it contends, are insufficient to suggest that it actually joined the overarching conspiracy to restrict the supply of eggs.

Certainly, pertinent legal authority is clear that participation in a trade group association and/or attending trade group meetings, even those meetings where key facets of the conspiracy allegedly were adopted or advanced, are not enough on their own to give rise to the inference of agreement to the conspiracy. See Ins. Brokerage, 618 F.3d at 349 ("[N]either defendants' membership in the [trade association], nor their common adoption of the trade group's suggestions, plausibly suggest conspiracy. . . . While these allegations [of defendant-brokers' membership in a trade group and their common adoption of the trade group's suggestions], indicate that the brokers had an opportunity to conspire, they do not plausibly imply that each broker acted other than independently . . . ." (citations omitted)); see also Travel Agent, 583 F.3d at 910-11 ("The fact that [defendants] gathered at industry trade association meetings during the seven-year period when defendants reduced commission rates should not weigh heavily in favor of suspecting collusion. . . . Moreover, a mere opportunity to conspire does not, standing alone, plausibly suggest an illegal agreement because [the defendants'] presence at such trade meetings is more likely explained by their lawful, free-market behavior." (citation omitted)); LaFlamme v. Societe Air France, 702 F. Supp. 2d 136 (E.D.N.Y. 2010) ("[M]embership and participation in a trade association alone does not give rise to a plausible inference of illegal agreement." (citing Twombly, 550 U.S. at 567 n.12 and In re Elevator Antitrust Litig., No. 04-CV-1178, 2006 WL 1470994, at *30-31 (S.D.N.Y. May 30, 2006), aff'd, 502 F.3d 47 (2d Cir. 2007)); In re Graphics Processing Units Antitrust Litig., 527 F. Supp. 2d 1011, 1024 (N.D. Cal. 2007) (determining that because "Plaintiffs have not pleaded that defendants ever met and agreed to fix prices; they plead at most that defendants had the opportunity to do so because they attended many of the same meetings.").

Indeed, the SAC alleges that Michael Foods' employees served on UEP or UEA committees, such as UEP's Area #3, Government Relations Committee, Environmental Committee, Quality Assurance/Food Safety Committee, and UEP Producer Committee for Animal Welfare, and the Long Range Planning Committee. SAC ¶ 48. At times, these employees are alleged to have held leadership positions in the trade groups as a whole, such as when Toby Catherman of Michael Foods was elected chairman of UEA in 2004 or when certain Michael Foods' employees served as UEP Board members. Id. ¶¶ 437, 284, 298. Plaintiffs also charge that Michael Foods, as represented by its employees, inter alia, was present at UEP Board meetings where Defendants purportedly "extolled the benefits of decreased supply on the price of eggs, discussing their own companies' participation in these collective schemes, and encouraging other companies to participate in industry supply restriction efforts," id. ¶ 191; attended UEP Animal Welfare Committee meetings where attendees articulated that the "'animal husbandry' program's express purpose was to reduce supply," id. ¶ 211; attended UEP Annual Board meetings where the "100% rule" was approved by a 19-to-1 vote and where the Board approved a schedule for early hen disposal or, alternatively, five-percent flock size reduction, id.

ΒΆΒΆ 220-21, 284-85; and attended a meeting of UEP's Producer Committee for Animal Welfare where a motion that "no new licenses to market Animal Care Certified eggs will be issued or renewed to producers who are not ACC certified" was approved by a 19-to-8 vote and a 26-to-2 vote approved a motion to permit "a license to market ACC eggs [to] be issued to shell egg ...


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