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In re Processed Egg Products Antitrust Litigation

United States District Court, E.D. Pennsylvania

April 5, 2018



          GENE E.K. PRATTER United States District Judge.

In preparation for the impending trial with the Direct Purchaser Class Plaintiffs and the remaining defendants, the parties altogether filed 21 motions in limine. The Court has ruled on 15 of those motions. This memorandum opinion addresses three of the remaining motions.

         The first motion (Doc. No. 1589) poses the plaintiffs' argument to bar the defendants' reliance on legal theories that were excluded in the course of the summary judgment rulings. Although the defendants make several novel arguments in an attempt to re-visit the summary judgment rulings, the Court finds that these arguments were waived and do not belong in the trial going forward.

         The plaintiffs' second motion (Doc. No. 1592) seeks to preclude the defendants from arguing that their participation in the alleged price-fixing agreement was limited, claiming such arguments are irrelevant under bedrock conspiracy law. Although limited conspiracy participation is irrelevant to determine liability for conspiratorial acts, it is relevant here insofar as it can show whether the parties ever joined the conspiracy in the first place, or perhaps, whether (and when) someone has withdrawn from a conspiracy. Therefore, the Court finds such information, and appropriate arguments based on such information, admissible and tenable.

         Finally, the third motion (Doc. No. 1597) seeks to preclude Dr. Rausser, the plaintiffs' expert economist, from discussing animal welfare standards, arguing that such standards fall outside his area of expertise. Such information is admissible, but only as limited by Federal Rule of Evidence 703. Dr. Rausser may discuss animal welfare standards, but only in the context of having arguably considered them to reach his conclusions as an economist. He may not discuss such standards as if he were an animal welfare expert. This motion is therefore denied, but the plaintiffs are reminded of the strictures of Federal Rule of Evidence 703.


         The defendants in this case are accused of a multi-year, multi-faceted price-fixing scheme to decrease the supply of eggs and drive up prices. The Direct Purchaser Class Plaintiffs (DPPs) allege that beginning in the early 2000s, the defendants conspired to reduce the domestic supply of shell eggs (thereby increasing egg prices) under the auspices of two industry groups, the United Egg Producers (UEP) and the United States Egg Marketers.

         The centerpiece of the scheme is the UEP Animal Care Certified Program. Under the Certified Program, the UEP issued certifications to producers if those producers complied with certain animal husbandry guidelines adopted by the UEP. According to the plaintiffs, these guidelines depressed egg supply by, among other things, establishing a minimum cage space allowance per bird in the defendants' facilities, which reduced flock size.[1]


         I. Motion to Exclude Testimony of Belief of Immunity under Capper-Volstead or Similar Laws

         “Persons engaged in the production of agricultural products” are immune from antitrust liability. 7 U.S.C. § 291. By definition then, an agricultural cooperative that includes non-producers is not immune under Capper-Volstead, and is subject to liability under the Sherman Act. In September 2016, the Court ruled that the UEP could not claim Capper-Volstead protection because it contained one non-producer: Sauder. The presence of Sauder “prevents the cooperative from claiming Capper-Volstead protection.” In re: Processed Egg Products Antitrust Litig., 2016 WL 4922706 at *6 (E.D. Pa. Sep. 13, 2016). The Court's ruling in this regard rested on this one issue.

         The DPPs seek to preclude any testimony regarding immunity under the Capper-Volstead Act as irrelevant in the wake of the summary judgment ruling. The defendants concede that they will not argue against anything antithetical to the summary judgment ruling, [2] but argue that pre-2004 Capper-Volstead protection is an open issue for trial. The defendants now point to the fact that Sauder did not join the UEP until 2004, and Sauder's participation in the UEP was the sole reason for granting summary judgment on this issue. In essence then, this motion in limine asks the Court to determine if pre-2004 Capper-Volstead protection is still an open question for trial. The Court holds that it is not. The defendants' argument, although innovative, was waived at summary judgment.

         In briefing on the summary judgment motion, the DPPs asked the Court to grant summary judgment on any affirmative defense the defendants may bring claiming Capper- Volstead protection. Despite this temporal argument being available, the defendants only argued that “Sauder simply does not fit” into the category of non-producers. Opp. to Affirmative Defenses Summary Judgment at 31 (Doc. No. 1259). That summary judgment argument relied exclusively on the functional aspects of Sauder's business, arguing that Sauder had “intimate involvement in the egg production process.” Id.

         The argument here (which was available at summary judgment) is wholly different. The defendants focus here on the relationship between Sauder and the UEP, arguing that Capper-Volstead immunity hinges on the time when Sauder officially joined the UEP, regardless of its producer or non-producer status. At the summary judgment stage, no party discussed the relationship (temporally or otherwise) between Sauder and the UEP as a basis for Capper-Volstead immunity. Even after the Court's grant of summary judgment, the defendants did not move the Court to reconsider or clarify its ruling. Therefore, the defendants cannot raise this novel argument now as an end-run around the summary judgment deadline. The Court declines to reconsider its ruling at summary ...

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