Saturday, September 27, 2008

Class Action Filed Against Egg Trade Association

A class action antitrust lawsuit was filed on Thursday against United Egg Producers ("UEP") and other egg producers for alleged price-fixing.

The Wall Street Journal wrote about collusion by the egg producers two days earlier, explaining that the producers defended their actions as being protected by the Capper Volstead Act. The 71-page complaint, available here, asserts that Capper Volstead does not apply to UEP, citing numerous reasons why the Act may not apply. For example, the complaint alleges that UEP is a trade group that does not market the eggs, some members are not producers, many members are vertically integrated, and UEP does not grow, ship, or sell the eggs.

Even though UEP may have legitimately thought that their actions were protected by Capper Volstead Act, and the courts may eventually find that their actions are protected, UEP was pushing the limits of the Act, which have not been clearly defined by case law.

In making business decisions, trade associations and other businesses should take into account the likelihood and potential costs of litigation, even if they believe that they will ultimately prevail on the merits.

The lawsuit is captioned T.K. Ribbing's Family Restaurant v. United Egg Producers, Inc., et al., No. 2:2008cv04653 (E.D. Penn. Sept. 25, 2008).

Related post: Trade Associations Investigated for Possible Antitrust Violations.

 

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