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Rose Acre Farms Settles with Unilever

09/01/2019

According to the legal-reporting newsletter Law360, Rose Acre Farms has settled an antitrust suit initiated by Unilever a major multinational food manufacturer.  The action arose from allegations of collusion among egg producers to limit egg production in 2008.

Unilever along with other plaintiffs have brought suit against most corporate and large egg producers although there is no substantiation that overt or even indirect collusion occurred among producers to limit production and hence influence the market for eggs. The fact that prices as recorded by a national benchmark system have indicated strong fluctuation and prolonged periods of suboptimal profitability suggest that even if collusion had occurred it was totally ineffective.

As with many class action lawsuits, individual defendants choose to settle to avoid the costs and time required to mount a defense.  Predatory class-action lawsuits are becoming more common.  The round of lawsuits against the egg industry was initiated in 2008 following the adoption of welfare rules that allowed greater floor area in cages.  Virtually all large egg producers and the major industry producers’ association were sued with litigation proceeding for more than seven years and resulting in substantial settlements. Cal-Maine Foods settled for $28 million in July 2013 without admitting wrongdoing. This action followed similar settlements by Sparboe Farms in 2009 andLand O’ Lakes subsidiary Moark LLC in 2012.