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In re Processed Egg Products Antitrust Litigation

United States District Court, E.D. Pennsylvania

October 4, 2012

In re: PROCESSED EGG PRODUCTS ANTITRUST LITIGATION. This Document Applies to: All Actions. No. 08-md-2002.

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In re Processed Egg Products Antitrust Litigation, pro se.

Sandra A. Jeskie, Philadelphia, PA, pro se.


GENE E.K. PRATTER, District Judge.

I. Introduction

This multidistrict litigation involves allegations that egg producers and trade groups violated Section 1 of the Sherman Act by conspiring to restrict the supply of eggs in this country. The direct action plaintiffs (" Plaintiffs" ) in the litigation are pursuing non-class relief against various defendants (" Defendants" ), including Sparboe Farms, Inc. (" Sparboe" ) and Land O' Lakes, Inc. (" Land O' Lakes" ). Sparboe now moves to dismiss six complaints filed by the Plaintiffs for failure to state a claim.[1] Land O' Lakes seeks to dismiss Giant Eagle's complaint on the same grounds. For the reasons that follow, the Court denies Sparboe's motions to dismiss and grants in part and denies in part the Land O' Lakes motion.

II. Factual Allegations

The six complaints at issue here all contain differently worded versions of the same core allegations. The Plaintiffs claim that, " [s]tarting in at least 1999 and continuing through at least 2008, Defendants unlawfully agreed to and did engage in a conspiracy to control supply and artificially maintain and increase the price of eggs," and that " [a]s direct purchasers of eggs, Plaintiffs were injured by Defendants' ... agreements to control supply and ... increase the price of eggs." Kraft Cmplt., ¶ 3. Specifically, the Plaintiffs allege that each defendant participated in the conspiracy through at least one of approximately eight collective actions.[2] Cf. Kroger Cmplt., ¶ 126.

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The first collective action occurred in 1999 and 2000 when the Defendants allegedly created a " supply adjustment program" and agreed to a five-percent flock molt, a five-percent reduction in flock inventory, and the development of a chick hatch reduction program. Id., ¶¶ 126(a), 132-33.

The second action supposedly began in 2000 and involved the development and implementation of a program that would increase the size of hen cages through chick hatch reduction. This program became known as the " Animal Care Certified Program" and was subsequently called the " UEP Certified Program." Id., ¶¶ 126(b), 138. The program eventually involved a prohibition of the practice of backfilling, which the United Egg Producers (UEP), a trade group, enforced through compliance audits. Id., ¶ 168.

The third collective action occurred in 2001, when the Defendants implemented an " emergency flock reduction." Id., ¶¶ 126(c), 141.

The fourth action occurred in 2002, when the Defendants allegedly carried out another reduction in supply by implementing an early molt and hen disposal plan. Id., ¶¶ 126(d), 150.

The fifth collective action involved an agreement to accelerate hen disposal or implement a five-percent flock reduction in 2004. Id., ¶ 126(e). [3]

The sixth collective action allegedly involved the Defendants implementing the " Animal Care Certified Program" at all of their production facilities. Id., ¶¶ 126(f), 154.

The seventh action occurred in 2004, when the Defendants gathered at an " Egg Industry Economic Summit" and agreed to either an early disposal of hens or a five-percent flock reduction. Id., ¶¶ 126(h), 167.

Finally, the eighth collective action involved an alleged scheme in which the Defendants used a trade group, the United States Egg Marketers (" USEM" ), to export eggs at a loss for the purpose of increasing domestic egg prices. Id., ¶¶ 126(j), 128, 184-85.

As stated above, the Plaintiffs allege that the Defendants coordinated and facilitated their conspiracy through two trade groups, the UEP and the USEM. The Plaintiffs claim that the conspiracy caused the price of eggs to rise, and that they were damaged because they directly purchased eggs from the Defendants at inflated prices. Id., ¶¶ 5, 19, 163, 181-83.

III. Legal Standards

A. Motion to Dismiss for Failure to State a Claim

A motion pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure tests the sufficiency of a complaint. See Bell Atl. Corp. v. Twombly,550 U.S. 544, 554-55, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). To survive a Rule 12(b)(6) motion, 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, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d ...

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