United States District Court, E.D. Pennsylvania
IN RE PROCESSED EGG PRODUCTS ANTITRUST LITIGATION THIS DOCUMENT APPLIES TO ALL DIRECT PURCHASER ACTIONS
E. K. PRATTER United States District Judge
by the Third Circuit Court of Appeals' denial of their
Rule 23(f) petition to appeal the Court's certification
of the Direct Purchaser Plaintiffs' Class, Defendant egg
producers seek to decertify the Direct Purchaser
Plaintiffs' Class. Defendants primarily contend that
"three seminal events"-two of which occurred prior
to the Court's initial ruling-demand decertification. The
Court disagrees. After reviewing the parties' submissions
and hearing oral argument, the Court denies the motion to
decertify the Direct Purchaser Plaintiffs' Class.
summary of the relevant factual background and the class
certification standard under Rule 23 appears, in detail, in
the Court's opinion granting certification for the Direct
Purchaser Plaintiff Shell Egg Class. In re Processed Egg
Products Antitrust Litig., No. 08-MD-2002, 2015 WL
5610834 (E.D. Pa. Sept. 21, 2015), opinion amended and
superseded by In re Processed Egg Products Antitrust
Litig, No. 08-MD-2002, 2015 WL 7067790 (E.D. Pa. Nov.
12, 2015) (hereinafter "Class Cert. I
at"). It is not necessary to rehash that information
here, except to the extent now of challenges to specific
issues addressed, and observations made, in the Class
Cert I opinion.
Class Cert I, the Court granted in part the Direct
Purchaser Plaintiffs' (DPPs) motion for class
certification and certified a class of shell egg direct
purchasers, finding that the shell egg subclass satisfied
Rule 23's requirements. A party seeking class
certification must show that the prerequisites of Rule 23(a)
are met: numerosity, commonality, typicality, adequacy and
ascertainability. Fed.R.Civ.P. 23(a). Of Rule 23(a)'s
requirements, typicality and adequacy were the most hotly
contested. The Court ultimately rejected Defendants'
arguments that differences in pricing or purchasing
arrangements, potential individualized defenses, and
purported insufficiencies with class representatives
precluded a finding of typicality and adequacy. See Class
Cert I at 179-80.
must also show how it satisfies at least one of Rule
23(b)'s standards. The Court concluded in Class Cert
I that the shell egg subclass met Rule 23(b)(3)'s
"predominance" and "superiority"
requirements. The Court expended most of its breath in
Class Cert Ion Rule 23(b)(3)'s predominance
requirement and waded into the evidence put forth by the
Plaintiffs' expert, Dr. Gordon Rausser.
certification stage, Defendants had argued that the Supreme
Court's decision in Comcast Corp. v. Behrend,
133 S.Ct. 1426 (2013), commands that Plaintiffs must first
measure the decrease in supply and then measure the effect on
the price. The Court declined to adopt such a broad view of
Comcast. It distinguished Dr. Rausser's model
from the model at issue in Comcast because this case
was in a different posture. None of the alleged means of
reducing the supply of eggs had been found inappropriate for
class treatment and Defendants had not challenged that
"any disaggregated part of the alleged conspiracy should
be found lawful or otherwise incapable of common proof."
Class Cert I at 192. However, the Court noted at the
time that while not just any adverse ruling would threaten
Dr. Rausser's model, the model could face a
Comcast problem "if (a) certain conduct were
found to have occurred; and (b) that conduct had an impact on
the price of eggs; but (c) that conduct was not legally
cognizable vis-a-vis the class." Class Cert I
at 192 n.15.
the Court expressed some reservations about whether Dr.
Rausser's methodologies were bulletproof, it ultimately
concluded that "Plaintiffs have shown that common
evidence is capable of demonstrating that Defendants engaged
in a series of complementary supply-reducing actions as part
of a conspiracy to increase the price of eggs. Dr. Rausser
has measured whether that conspiracy was successful in
increasing the price of eggs. His model fits the theory of
liability and satisfies Comcast." Class Cert, I
at 193. The Court thus found that common issues predominate
with respect to the antitrust injury to the shell eggs
subclass. See Class Cert, I at 199-200.
to Federal Rule of Civil Procedure 23(f), Defendants then
petitioned the Third Circuit Court of Appeals for permission
to appeal the class certification order. The Court of Appeals
denied their petition.
time the Court certified the Direct Purchaser Plaintiff Shell
Egg Class, it left unresolved the class period determination
and requested that the parties submit additional briefing on
the parties' proposed cutoff dates. After reviewing the
parties' submissions, the Court held that the proper
cut-off date for the class is December 31, 2008. In re:
Processed Egg Prod. Antitrust Litig, No. 08-MD-2002,
2016 WL 410279, at *1 (E.D. Pa. Feb. 3, 2016) (hereinafter
"Class Cert. II at "). The Court certified
the following Direct Purchaser Plaintiff Shell Egg Class:
All individuals and entities that purchased shell eggs
produced from caged birds in the United States directly from
Defendants during the Class Period from September 24, 2004
through December 31, 2008.
Excluded from the Class are the Defendants, their
co-conspirators, and their respective parents, subsidiaries,
and affiliates, as well as any government entities. Also
excluded from the Class are purchasers of
"specialty" shell eggs (such as "organic,
" "certified organic, " "free range,
" "cage free", "nutritionally enhanced,
" or "vegetarian fed") and purchasers of
hatching eggs, which are used by poultry breeders to produce