A coalition of food wholesalers and retailers has filed an antitrust lawsuit in a Kansas state court against egg producers and industry trade groups alleging that, by reducing the number of hens, increasing egg exports and decreasing hen lifecycles, the defendants conspired to manipulate egg prices, which have more than doubled in recent years. Associated Wholesale Grocers, Inc. v. United Egg Producers, No. 10 2181 (Kan. Dist. Ct., Wyandotte Cty., filed December 23, 2010). Similar class-action lawsuits nationwide were consolidated in multidistrict litigation (MDL) proceedings in a Pennsylvania federal court; the Kansas plaintiffs apparently opted out of class to file their own claims. The petition, alleging violations of the Kansas Restraint of Trade Act, discusses the U.S. Department of Justice investigation into industry practices and relies on some documents produced during the MDL proceedings. Several settlements have apparently been reached in the MDL, and one of the defendants apparently agreed to…
Tag Archives price-fixing
Northeast dairy farmers have reportedly settled their price-fixing claims against Dean Foods Co. for $30 million and injunctive relief requiring the company to buy a portion of its raw milk from multiple sources. Allen v. Dairy Farmers of America, No. __ (D. Vt., settlement reached December 24, 2010). While the agreement requires court approval, it would reportedly allow some 5,000 to 10,000 farmers to file claims for monetary damages over allegations that Dean Foods would buy milk only through Dairy Farmers of America (DFA) and its affiliates in the region. According to counsel for the plaintiffs, the case will continue against DFA, to resolve claims that “the nation’s largest cooperative monopolized a level of distribution of fluid milk in the Northeast and forced dairy farmers to join DFA or its marketing affiliate [Dairy Marketing Services] to survive.” See DairyLine.com, December 24, 2010; Worcester Business Journal, December 27, 2010; and Burlington…
On behalf of a putative nationwide class of indirect potato purchasers, a San Francisco restaurateur has sued a number of potato industry participants, including co-operatives, growers, packers, and distributors, alleging that they have conspired since 2006 to control and reduce the supply of potatoes in an effort to keep crop prices high. Florez v. Idahoan Foods, LLC, No. 10-3984 (N.D. Cal., filed September 3, 2010). The complaint refers to specific meetings of “cartel” members and discusses newspaper articles comparing the cooperative venture to OPEC, the oil-producing country organization that controls output and pricing in that industry. Member growers purportedly reduced their acreage, in some instances plowing under crops already grown, and submitted to audits to confirm that they were complying with production limits. Alleging that class members were harmed by paying “supracompetitive prices for potato products during the class period, higher than that which they would have paid in the…
A federal court in Pennsylvania has certified for immediate appeal its denial of the defendants’ motion to dismiss in multidistrict litigation (MDL) alleging price-fixing by chocolate manufacturers. In re Chocolate Confectionary Antitrust Litig., MDL No. 1935 (M.D. Pa., April 8, 2009). The defendants in these 87 consolidated lawsuits reportedly supply 75 percent of the chocolate candy consumed by Americans each year. The lawsuits allege that the companies conspired to raise prices in 2002, 2004 and 2007 by as much as 10 percent and rely on information generated by government investigations in the United States and Canada to bolster their conspiracy allegations. At least one company spokesperson has been quoted as saying, “You can’t just infer the existence of a price-fixing conspiracy from the fact that independent competitors in concentrated industries independently choose to raise their prices.” The question certified to the Third Circuit Court of Appeals is whether the U.S.…
Federal investigators seeking to crack down on corruption in California’s tomato-processing sector have apparently secured guilty pleas from two industry employees, one with a tomato paste supplier and the other with a processed tomato purchaser. Jennifer Dahlman, who worked for a California company under investigation for alleged bribery, price-fixing and mislabeling, reportedly pleaded guilty to causing the introduction of adulterated and misbranded food into interstate commerce with intent to defraud. Dahlman apparently mislabeled products that should have been discarded because of high mold content, purportedly at the direction of company managers, thus giving her company an unfair advantage over competitors and leading to increased consumer prices for processed tomato products, such as sauces, soups and salsas. While she is cooperating with authorities, Dahlman faces up to three years in prison. According to U.S. attorneys involved in the investigation, the mislabeled products posed no health hazard to consumers. James Wahl, who formerly…
