Processed Eggs Antitrust Class Action
Introduction
On October 16, 2008, Oasis Foods Company, on behalf of itself and other direct purchasers of processed eggs, filed a nationwide class action lawsuit against the nation’s leading producers of processed eggs. The suit alleges that since 2002 the prices paid to defendants for processed eggs were inflated due to a conspiracy among defendants to allocate customers and regional territories. Lieff Cabraser Heimann & Bernstein, LLP, serves as co-counsel for plaintiff. The suite was filed in federal court in New Jersey.
Definition of Processed Eggs
Processed eggs are the eggs which are removed from their shells in a process referred to as "breaking." Once removed from the shell, the egg can be in refrigerated liquid, frozen, or dried form as well as specialty products such as wet-pack and dry-pack pre-peeled hard-cooked eggs, either whole, wedged, sliced, chopped or pickled and long rolls of hard-cooked eggs.
The processed egg products market generates over $2 billion in annual sales and is distinct from the market for shell eggs (eggs still in the shell). Processed eggs are preferred by commercial bakers, food manufacturers and the foodservice industry often due to their superior shelf-life over shell eggs. Convenience foods such as cake and pudding mixes, pasta, ice cream, mayonnaise, candies and bakery goods utilize processed egg products. They are also sold to other food manufacturers, restaurants, supermarkets and foodservice distributors.
List of Defendants
The defendants in the antitrust lawsuit include:
- Michael Foods, Inc., the largest North American producer of processed egg products;
- Papetti's Hygrade Egg Products, Inc.;
- Moark LLC;
- Land O'Lakes Inc.;
- Rose Acre Farms, Inc.;
- Siegel Egg Co, Inc.;
- Newburg Egg Corporation; and
- Sonstegard Foods Company.
Plaintiff’s Allegations
The complaint alleges:
- Processed eggs supplied by one producer may be readily substituted for processed eggs supplied by any other supplier. Therefore, buyers make purchase decisions based largely, if not entirely, on price. However, due to defendants' anticompetitive conduct, defendants have been able to fix, raise, maintain-and stabilize the price of processed eggs at artificially high levels.
- The processed eggs market is highly concentrated. A small number of producers control a major share of the market. This concentration makes the market conducive to price-fixing.
- As a result of defendants' alleged collusive actions, the price for processed eggs increased dramatically in last several years. According to Urner Barry Publications, a leading publication to the egg industry, the price per pound of a broken whole unpasteurized egg sold for between $.44 and $.46 per pound on a less than truckload basis in February 2007. By July 2007, the price for the same product in the same quantity had risen to between $.62 and $.64 per pound. By March 24, 2008, the price for the same product in the same quantity had risen dramatically to $1.08 and $1.10 per pound - a 139% increase from February 2007 prices.
- Following the initiation of the Department of Justice's investigation into the processed egg industry in late March 2008, the price for the same product in the same quantity dropped precipitously. On April 16, 2008, the price dropped to between $.79 and $.81 per pound and by May 30, 2008, the price dropped to between $.63. and $.65 per pound.
- Defendants engaged in a conspiracy in violation of antitrust laws by agreeing not to solicit customers within the geographic areas serviced by the others. Defendants further agreed that, with respect to multistate retailer customers, they would not solicit to supply processed egg to those retailers in areas outside of the areas that were allocated to defendants pursuant to the combination or conspiracy.
Contract Lieff Cabraser
Businesses that purchase processed eggs from any of the defendants listed above are welcome to contact Lieff Cabraser. All information provided will be handled in strict confidence as provided under the law. We wish to learn about your experiences in purchasing processed eggs. We will review any claim promptly and without charge. Please click here to contact a Lieff Cabraser antitrust attorney.
About Lieff Cabraser
Lieff Cabraser Heimann & Bernstein, LLP is a sixty-plus
attorney law firm with offices in San Francisco, New York and Nashville.
We represent businesses, governments and individuals as plaintiffs in class
and group actions as well as in individual lawsuits in cases involving
substantial losses. Since 2003, The National Law Journal has annually
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Lieff Cabraser has played a prominent role in federal
litigation under the Sherman Act on behalf of businesses in numerous markets
including computer components, prescription drugs, polypropylene carpets,
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litigated antitrust claims against Microsoft Corporation for monopolistic
practices, and achieved record recoveries against El Paso Gas Co. and wholesale
electric companies for allegedly manipulating the price of energy in California. Learn
more about our firm.
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