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Wednesday, May 22, 2024 | Back issues
Courthouse News Service Courthouse News Service

Judge Fries Egg-Conspiracy Complaint

(CN) - More than four years after U.S. egg producers were accused of fixing prices, a federal judge dismissed individual consumers' fourth amended complaint.

Attorneys who won a $25 million settlement for the alleged conspiracy in November 2012 were awarded $7.5 million - 30 percent of the settlement fund approved in July by U.S. District Judge Gene Pratter.

That deal required Land O' Lakes, its subsidiary Moark LLC, and Moark subsidiary Norco Ranch to help advance the case against the alleged co-conspirators.

Plaintiffs in the consolidated case include direct purchasers - grocery stores, food manufacturers, restaurants and other businesses that bought eggs from some of the nation's largest egg suppliers - and indirect purchasers, the individual consumers who bought eggs through other channels.

They claimed egg producers and trade groups engineered a supply-management conspiracy to reduce U.S. egg production and keep prices high. As part of that conspiracy, the producers allegedly coordinated the disposal of hens and exported eggs abroad at a loss.

The court approved the award, noting that no class members came forward to oppose the settlement, which marked a deal with direct purchasers only, while other claims remained pending .

The court partially dismissed the indirect purchaser plaintiffs' second amended consolidated class action complaint, finding the claims for damages were barred by statutes of limitations. Consumers then filed third and fourth amended complaints.

Pratter, in Philadelphia, last week granted the egg producers' motion to partially dismiss the fourth amended complaint: 41 state claims invoking the laws of 21 jurisdictions.

Certain counts in the fourth amended complaint remain pending - a Sherman Act claim and West Virginia unjust enrichment claim, which the defendants have not moved to dismiss.

Pratter tossed the consumers' argument that the discovery rules of 16 states, including Arizona, should toll their claims.

"The plaintiffs miss the mark by emphasizing that some of the 534 paragraphs in the

[indirect purchasers' fourth amended complaint] suggest that it was difficult for them to uncover the alleged conspiracy," Pratter wrote. "Assuming arguendo that the plaintiffs undertook a Herculean task to discover their claims, they presumably achieved this feat at some point, as they have now filed suit. The applicability of Arizona's discovery rule hinges not merely on whether it was difficult for the plaintiffs to learn of the facts underlying their causes of action, but also on when the plaintiffs learned of those facts. In the absence of a tolling date, the [indirect purchasers' fourth amended complaint] fails to suggest plausibly that such discovery did not occur until a time within the limitations period."

The plaintiffs' reliance on the fraudulent concealment doctrines of 17 states also failed.

"[E]very fraudulent concealment rule cited by the plaintiffs only tolls the statute of limitations until the date of discovery," Pratter wrote. "Therefore, given the [indirect purchasers' fourth amended complaint's] failure to allege a tolling date or otherwise plead facts which plausibly suggest when the plaintiffs discovered their claims, the court must dismiss the portions of those claims that fall outside the applicable statutes of limitations."

The court refused to let the plaintiffs file a fifth amended complaint.

"[T]he plaintiffs filed their consolidated amended class action complaint on February 27, 2009, at which point they presumably already knew the date or dates when they discovered their claims," Pratter wrote. "Yet after more than four years of litigating this action, as well as the filing of second, third, and fourth amended complaints, the plaintiffs have still failed to allege a tolling date. In light of this procedural history, the court will not permit the plaintiffs to file a fifth amended complaint."

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