Briefing Begins in Egg Price-Fixing Appeal

Appellant food retailers, including Kroger, Safeway, HyVee, and others, have filed their brief in a Third Circuit appeal of their loss in an antitrust trial alleging the manipulation of prices of eggs. The underlying case dates back to 2008 when the plaintiff food retailers first alleged a conspiracy in restraint of trade in violation of the Sherman Antitrust Act on the part of Rose Acre Farms, the second-largest egg producer in the country. In December, a jury rejected the allegations of a conspiracy.

United Egg Producers and United States Egg Marketers were also brought as defendants. Both are trade groups that boast substantial membership among the egg-producing industry.

The grocery chains alleged that the plaintiffs “conspired to and did curtail the production of eggs as well as control and reduce the supply of eggs in order to artificially increase the price of eggs above competitive levels. They did so by engaging in various acts in furtherance of their unlawful agreement….” The measures taken include temporary supply reductions, a “pretextual” certification program, and a coordinated export program. The plaintiffs alleged that the certification program increased space requirements for hens over time in an attempt to curb production.

The plaintiffs, on appeal, argue that the district court committed two errors in the way it instructed the jury. First, they allege that the instruction that all three elements of the conspiracy must be proven was incorrect. They argue that proof only one element of the alleged conspiracy would consist of a Sherman Act violation. Second, they argue that the jury should have been instructed that “an agreement among competitors that was both (1) for the purpose and (2) with the effect of reducing output or increasing prices is per se unlawful.”

The appellants seek for the underlying verdict to be vacated and the institution of a new trial.