Food Manufacturers Awarded $53 Million in Damages in Egg Conspiracy Case
A federal jury in Illinois ordered $17.7 million in damages — an amount tripled to more than $53 million under federal law — to several food manufacturing companies who had sued major egg producers over a conspiracy to limit the egg supply in the United States.
The jury ruled last week that the egg producers used various means to limit the domestic supply of eggs to increase the price of products during the 2000s. The time frame of the conspiracy was an issue throughout the case; jurors ultimately determined damages occurred between 2004 and 2008.
The damages verdict was reached Friday in the Northern District of Illinois. According to federal antitrust law, the damages are automatically tripled, bringing the total to over $53 million. Court documents on the verdict were not readily available Friday evening, but statements from the manufacturers' attorney and one of the egg producers confirmed a total of about $17.7 million.
Brandon Fox, an attorney representing the food manufacturers, said in a statement, "We are extremely grateful for the jury's service and findings. This was an important case for many reasons, and the jury's award recognizes its significance."
Court documents show the defendants have denied the claims.
Egg Suppliers Found Guilty of Conspiracy to Limit Supply and Fix Prices
A group of egg suppliers, including the family company of former Chair John Rust, has been found guilty of conspiring to limit the supply of eggs and fix prices in the domestic market. The verdict was announced in a recent court case, and Rust has stated that the decision will be appealed.
According to court documents, the egg suppliers exported eggs abroad in order to reduce the overall supply in the domestic market. They also employed various methods to limit the number of chickens, such as reducing cage space, early slaughter, and flock reduction.
The jury was specifically instructed not to consider recent changes in egg pricing during their deliberations. However, several food manufacturers, including Kraft Foods Global, Inc., The Kellogg Company, General Mills, Inc., and Nestle USA, Inc., joined as plaintiffs in the lawsuit against the egg producers.
The jury found that the egg suppliers involved in the conspiracy were Cal-Maine Foods, Inc., United Egg Producers, Inc., United States Egg Marketers, Inc., and Rose Acre Farms, Inc., a southern Indiana-based company previously chaired by Rust.
Rose Acre Farms Disagrees with Verdict in Egg Price-Fixing Case
Rose Acre Farms, the second-largest egg producer in the U.S., has expressed its disagreement with the jury's verdict in a written statement. The company denies being part of any anticompetitive egg price-fixing conspiracy and intends to explore all legal options, including post-trial relief and appeal.
Cal-Maine Foods, Inc. has filed a petition with the court and will consider its options, including a possible appeal, following a recent jury verdict.
The company acknowledges the jury's decision and the relatively modest damages awarded, but remains disappointed as it maintains its belief that it did nothing wrong.
Efforts to reach representatives from the United Egg Producers and United States Egg Marketers for comment have been unsuccessful.
In a statement, Rust criticized U.S. Rep. Jim Banks, accusing him of favoring "mega corporations" over American farmers in light of the jury's ruling.
Rust also mentioned his ongoing legal battle with Indiana's Secretary of State, where he is challenging a state law that could hinder his candidacy in the upcoming primary election.
Banks responded to Rust's comments, stating, "Hoosiers will not support a dishonest individual."
Rust's lawsuit against the Secretary of State revolves around his claim that the law is unconstitutional and lacks clarity.
Rust Faces Uphill Battle for GOP Nomination
Banks has received the endorsement of the Indiana Republican Party and former President Donald Trump, putting him in a strong position for the GOP nomination. However, the seat is currently held by Republican Mike Braun, who is choosing to run for governor next year. This sets up a challenging race for Rust as he seeks to secure the nomination.
