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Land O’Lakes settles price-fixing suit

One of more than 10 egg producers a group of restaurants and food processing companies claims conspired to fix egg prices nationwide has agreed to a $25 million settlement.
/ Source: The Associated Press

One of more than 10 egg producers that a group of restaurants and food processing companies claims conspired to fix egg prices nationwide has agreed to a $25 million settlement, according to a court filing.

The restaurants and processors claim egg prices skyrocketed between 2004 and 2008 because industry officials conspired to reduce production — not because feed costs rose, as egg industry leaders said.

The restaurants' and processors' lawsuit against the egg producers was filed in 2008 in U.S. District Court in Philadelphia, and the court still must approve the settlement, which the plaintiffs announced Monday.

Land O'Lakes, its egg-producing subsidiary Moark and Moark's Norco Ranch Inc., are participating in the settlement. Claims remain active against more than 10 of the biggest producers in the egg industry, including Cal-Maine Foods Inc., Michael Foods Inc. and Rose Acre Farms Inc.

The plaintiffs include restaurants such as T.K. Ribbing's Family Restaurant in Falconer, N.Y., and Lisciandro's Restaurant in Jamestown, N.Y., among others. Other plaintiffs are food processors including Solovy Foods Inc. in Vernon, Calif., and Karetas Foods Inc. in Reading, Pa.

The lawsuit alleges that egg producers reduced supply in a number of ways, such as cutting the number of hens at laying farms and delaying or reducing chick hatching, in order to raise prices.

The $25 million settlement payment would be the first monetary compensation for direct purchasers of eggs, according to Hausfeld LLP, one of four main law firms representing the restaurants and food processors that sued the egg producers. The other firms are Bernstein Liebhard LLP, Susman Godfrey LLP, and Weinstein, Kitchenoff & Asher LLC.

Hausfeld said in a statement that the Land O'Lakes defendants have agreed to provide documents and testimony supporting the case against the other defendants.

"Settling the case avoids the expense and distraction of protracted litigation," said Land O' Lakes spokeswoman Jeanne Forbis in an e-mail response to an Associated Press query.

Cal-Main could not immediately be reached, and Michael Foods had no immediate comment.

Joe Miller, general counsel for Rose Acre Farms, said the company denies the allegations and is "defending them vigorously."