In Re Processed Egg Products Antitrust Litigation
2011 U.S. Dist. LEXIS 109641
E.D. Pa.2011Background
- This MDL concerns an alleged conspiracy among egg producers and trade groups to restrain the domestic egg supply in violation of Sherman Act §1.
- The SAC supersedes prior complaints and six motions to dismiss are pending addressing individual defendants' liability.
- Plaintiffs allege eight collective actions—including supply adjustment programs, flock reductions, an animal welfare/UEP Certification Program, cage-density guidelines, and an export program—to manipulate supply and prices.
- Trade groups UEP, UEA, and USEM are central to the alleged conspiracy, with Hillandale entities tied through ownership and integrated operations.
- The court applies Rule 12(b)(6) pleading standards (Twombly/Iqbal) and treats the SAC as a whole rather than dissecting for each defendant.
- The court ultimately grants Hillandale Entities and UEA’s dismissals, but denies motions to dismiss Michael Foods, Daybreak, Rose Acre, and Ohio Fresh Eggs, LLC.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does SAC plausibly plead Michael Foods' participation in the conspiracy? | Michael Foods joined the UEP/UEA framework and certified under UEP; attendance at meetings and certification imply agreement. | Merely attending trade group meetings and membership do not plausibly show agreement to conspire; need active participation. | Denied; SAC plausibly alleges joining the conspiracy. |
| Does SAC plausibly plead Daybreak's participation in the conspiracy? | Daybreak adopted UEP Certified guidelines and participated in related actions; independent justification insufficient. | Attendance at meetings and ordinary involvement do not prove agreement; Daybreak could act independently. | Denied; adoption of guidelines plus other conduct supports plausibility. |
| Does SAC plausibly plead Rose Acre's participation in the conspiracy? | Rose Acre was a UEP/UEA/USEM member, certified, and engaged in export and other actions tied to the conspiracy. | Export participation and membership do not by themselves prove conspiracy; could be independent action. | Denied; allegations against Rose Acre are plausible when considering certification and related conduct. |
| Does SAC plausibly plead the Hillandale Entities' participation? | Hillandale entities are vertically integrated and share ownership/control; integrated conduct can support liability. | Subsidiaries/affiliates cannot be imputed with liability absent direct participation; single-enterprise theory lacks support. | Granted; Hillandale motions granted without prejudice to amend. |
| Does SAC plausibly plead UEA's participation? | Overlap among UEP, UEA, and USEM and leadership roles suggest concerted action by UEA. | Joint meetings or shared staff do not prove entity-level conspiracy; apparent authority not shown. | Granted; UEA's motion to dismiss granted without prejudice. |
Key Cases Cited
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (plausibility standard for pleading antitrust claims)
- In re Ins. Brokerage Antitrust Litig., 618 F.3d 300 (3d Cir. 2010) (two essential requirements for §1 claim; pleading plausibility)
- Gordon v. Lewistown Hosp., 423 F.3d 184 (3d Cir. 2005) (elements of Sherman Act §1 claim; concerted action and restraint)
- Petruzzi's IGA Supermarkets, Inc. v. Darling-Delaware Co., 998 F.2d 1224 (3d Cir. 1993) (requires showing of agreement and anti-competitive effect)
- In re Travel Agent Comm'n Antitrust Litig., 583 F.3d 896 (6th Cir. 2010) (circumstantial pleading and plausibility in conspiracy cases)