Insurers Need Not Defend Egg Producer Embroiled in Antitrust Litigation

The Seventh Circuit Court of Appeals has determined that liability insurers
of a major U.S. egg producer have no obligation to defend it in class action
lawsuits alleging that the egg producer conspired with others to keep the
price of eggs artificially high. Rose Acre Farms, Inc. v. Columbia Cas. Co., No.
11-1599 (7th Cir., decided November 1, 2011).

Rose Acre Farms claimed that the antitrust actions sought damages falling
under what the policies call “personal and advertising injury.” The court
disagreed, noting that the company tried to “connect its advertising to the
antitrust suit in [a] convoluted manner.” Because the antitrust complaints had
nothing to do with trademark infringement, i.e., using another’s advertising
idea without permission, which is the conduct covered by the “advertising
injury” provision, the court affirmed the lower court’s ruling denying coverage