The District Court of Eastern Pennsylvania recently certified the shell egg sub-class in a case brought on behalf of direct purchasers who alleged that the nation’s major egg producers conspired to artificially increase the price of shell eggs in the United States. In the September 18th memorandum in In Re: Processed Egg Products Antitrust Litigation, Judge Gene Pratter concludes that “common issues predominate with respect to the antitrust injury to the shell egg subclass.” Judge Pratter’s class certification decision relied extensively on the testimony and analyses of OnPoint expert Dr. Gordon Rausser, who examined the economics of U.S. egg production and pricing and testified on behalf of the Direct Purchaser Class. Judge Pratter found that Dr. Rausser’s analysis of the shell egg industry “highly probative of the extent to which the alleged conspiracy, if shown to be successful, would have affected virtually every member of the proposed shell eggs subclass.” Judge Pratter also found:
- “Plaintiffs have shown that common evidence is capable of demonstrating that Defendants engaged in a series of complementary supply-reducing actions as part of a conspiracy to increase the price of eggs. Dr. Rausser has measured whether that conspiracy was successful in increasing the price of eggs. His model fits the theory of liability and satisfies ” (p. 38)
- “Plaintiffs have shown that Dr. Rausser’s model is reliable enough in attributing the damages found in Dr. Rausser’s model to the conspiracy.” (p. 38)
- “Defendants’ attempts to decouple the observed price increases from the alleged output restriction do not convince the Court that Dr. Rausser’ s model is incapable of demonstrating antitrust impact using classwide evidence.” (p. 39)
- “Defendants have not identified any variables materially affecting the price of eggs that were not included in Dr. Rausser’s models.” (p. 44)
- “Defendants argue that Dr. Rausser’s regression is flawed because the benchmark period (i.e. the “normal” years against which he compares the conspiracy years to see if the price of eggs was inflated-here, 1997-2000 is the benchmark) is allegedly also tainted by some anticompetitive conduct. As Plaintiffs point out, however, if anything, any anticompetitive activity during the benchmark period would make Dr. Rausser’s results conservative.” (p. 41)
The Judge declined to certify the much smaller subclass of egg products, which includes frozen, dried or liquid egg products.
To read the memorandum, click here.