In re Processed Egg Products Antitrust Litigation Website
www.eggproductssettlement.com

Frequently Asked Questions

Cal-Maine Settlement and First Sparboe Amendment

  1. What is this lawsuit about?
  2. Who is included in the Cal-Maine Settlement?
  3. What does the Cal-Maine Settlement provide?
  4. How will the Cal-Maine Settlement Fund be distributed?
  5. How could I have filed a Claim Form in the Cal-Maine Settlement?
  6. What is the effect of the Court's final approval of the Cal-Maine Settlement?
  7. Who is included in the Sparboe Settlement as Amended?
  8. What does the Sparboe Settlement Provide?
  9. What is the effect of the Court’s final approval of the First Sparboe Amendment?
  10. Who represents the Cal-Maine and Sparboe Settlement Classes?
  11. How will the lawyers be paid?
  12. When and where did the Court hold a hearing on the fairness of the Cal-Maine Settlement and the First Sparboe Amendment?
  13. How could I have objected to the Cal-Maine Settlement or the First Sparboe Amendment?
  14. How could I have excluded myself from the Settlements?
  15. What happens if I did nothing?


1. What is this lawsuit about?

In this lawsuit, Plaintiffs allege that Defendants, certain Producers of Shell Eggs and Egg Products, conspired to decrease the supply of eggs. Plaintiffs allege that this supply conspiracy limited, fixed, raised, stabilized, or maintained the price of eggs, which caused direct purchasers to pay more for eggs than they would have otherwise paid. The term "eggs" refers to both Shell Eggs and Egg Products (which are eggs removed from their shells for further processing into a dried, frozen, or liquid form), but do not include specialty Shell Eggs, such as cage-free, organic, or nutritionally enhanced eggs, eggs used for growing, or Egg Products produced from such eggs.

In the fall and winter of 2008, lawsuits were filed in several federal courts generally alleging this conspiracy to depress egg supply. On December 2, 2008, the Judicial Panel on Multidistrict Litigation transferred those cases for coordinated proceedings before the Honorable Gene E. K. Pratter, United States District Judge in the United States District Court for the Eastern District of Pennsylvania. On January 30, 2009, Plaintiffs filed their first consolidated amended complaint alleging a wide-ranging conspiracy to fix egg prices that injured direct egg purchasers. In December 2009, Plaintiffs filed their second consolidated amended complaint adding new allegations against the Defendants. On September 26, 2011, the Court dismissed claims against certain defendants, but permitted Plaintiffs to proceed against all other Defendants. Plaintiffs filed their third consolidated amended class action complaint on January 4, 2013. On August 23, 2013, the Court dismissed claims under the third amended complaint for damages incurred by the class prior to September 24, 2004. Claims for damages incurred after that date are proceeding.

On June 8, 2009, Plaintiffs and Defendant Sparboe Farms Inc. ("Sparboe") reached a settlement. Notice of the Sparboe Settlement was sent to potential Class Members in September 2010. The original Sparboe Settlement Agreement released all claims arising from this action between January 1, 2000 and June 8, 2009 in exchange for cooperation that substantially assisted Plaintiffs in prosecuting the claims in this Action. The Sparboe Agreement was finally approved by the Court on July 16, 2012. Since that time, Plaintiffs and Sparboe have amended the Sparboe Agreement to expand the Class Period from January 1, 2000 to October 23, 2009, to include claims arising from this action between October 24, 2009 and February 28, 2014.

This lawsuit alleges injuries to direct egg purchasers only, that is, entities or individuals who bought eggs directly from egg Producers. A separate case is pending wherein the plaintiffs allege a wide-ranging conspiracy to fix egg prices that injured indirect egg purchasers. An indirect egg purchaser buys eggs from a direct purchaser of eggs or another indirect purchaser.

Plaintiffs and Defendants Moark, LLC, Norco Ranch, Inc., and Land O'Lakes, Inc. ("Moark Defendants") entered into a settlement on May 21, 2010 providing $25 million to a fund to compensate Class Members and substantial cooperation to assist Plaintiffs in pursuing their claims against the remaining Defendants. Notice of the Moark Agreement was sent to potential Class Members in September 2010. The Court approved the Moark Settlement on July 16, 2012, and checks were mailed to eligible Moark Settlement Class Members on July 3, 2013.

Plaintiffs and Defendant Cal-Maine entered into settlement discussions beginning in March 2012, and those discussions continued into 2013. After extensive arm's-length negotiations, on August 2, 2013, Plaintiffs and Cal-Maine reached a settlement providing $28 million to a fund to compensate Class Members and factual information and a witness to testify at trial that will materially assist Plaintiffs in further analyzing and prosecuting this Action against the remaining Defendants.

Plaintiffs represent both themselves (the named plaintiffs) and the entire Class of direct egg purchasers across the United States. Plaintiffs brought this lawsuit as a class action because they believe, among other things, that a class action is superior to filing individual cases and that the claims of each member of the class present and share common questions of law and fact. Plaintiffs claim that Defendants' actions violated the Sherman Antitrust Act, a federal statute that prohibits any agreement that unreasonably restrains competition. The alleged agreement was to reduce the overall supply of eggs in the United States from the year 2000 to the present. Plaintiffs allege that Defendants and unnamed co-conspirators controlled the egg supply through various methods that were all part of a wide-ranging conspiracy. These methods alleged include, but are not limited to, agreements to limit or dispose of hen flocks, a pre-textual animal welfare program that was a cover to further reduce egg supply, agreements to export eggs in order to remove eggs from the domestic supply, and the unlawful coercion of producers and customers to ensure compliance with the conspiracy. Plaintiffs allege that by collectively agreeing to lower the supply of eggs, Defendants caused Shell Egg and Egg Product prices to be higher than they otherwise would have been. Cal-Maine and the other Defendants deny all of Plaintiffs' allegations.

The Defendants remaining in this case include: Michael Foods, Inc.; Rose Acre Farms, Inc.; Ohio Fresh Eggs, LLC; Daybreak Foods, Inc.; and R.W. Sauder, Inc.

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2. Who is included in the Cal-Maine Settlement?

Plaintiffs and Cal-Maine have agreed that, for purposes of the Cal-Maine Settlement, the Settlement Class is defined as follows:

All persons and entities that purchased Shell Eggs and Egg Products in the United States directly from any Producer, including any Defendant, during the Class Period from January 1, 2000 through February 28, 2014.

Excluded from the Settlement Class are:

  1. Cal-Maine, the Defendants that remain in the case, prior Settling Defendants (Moark Defendants and Sparboe), and their respective parents, subsidiaries and affiliates;
  2. Egg Producers, defined as any person or entity that owns, contracts for the use of, leases, or otherwise controls hens for the purpose of producing eggs for sale, and the parents, subsidiaries, and affiliated companies of such Producers;
  3. All government entities, as well as the Court and staff to whom this case is assigned, and any member of the Court's or staff's immediate family.
  4. Purchases of "specialty" Shell Eggs (certified organic, nutritionally enhanced, cage-free, free-range, and vegetarian-fed types), purchases of Egg Products produced from specialty Shell Eggs, and purchases of "hatching"Shell Eggs (used by poultry breeders to produce breeder stock or growing stock for laying hens or meat), and any person or entity that purchased exclusively specialty or hatching eggs.

Persons or entities that fall within the definition of the Settlement Class and do not exclude themselves will be bound by the results of this litigation.

The Settlement Class consists of two subclasses. The first subclass, called the "Shell Egg Subclass," is made up of “[a]ll individuals and entities that purchased Shell Eggs in the United States directly from any Producer, including any Defendant, during the Class Period from January 1, 2000 through February 28, 2014." The second subclass, called the "Egg Products Subclass," is comprised of "[a]ll individuals and entities that purchased Egg Products produced from Shell Eggs in the United States directly from any Producer, including any Defendant, during the Class Period from January 1, 2000 through February 28, 2014."

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3. What does the Cal-Maine Settlement provide?

After engaging in settlement discussions over the course of more than a year and a half, Plaintiffs and Cal-Maine reached a Settlement on August 2, 2013. The Cal-Maine Settlement is between Plaintiffs and Cal-Maine only; it does not affect any of the remaining non-settling Defendants, against whom this case continues. Pursuant to the terms of the Cal-Maine Settlement, Plaintiffs will release Cal-Maine from all pending claims. In exchange, Cal-Maine has agreed to pay $28,000,000 to a fund to compensate Class Members, to provide information concerning Cal-Maine's knowledge of the facts relating to documents, witnesses, meetings, communications, conduct and events at issue in the Action, and to provide a witness to testify at trial regarding facts or issues in this Action. If Class Members whose combined purchases equal or exceed a threshold percentage of Cal-Maine's Total Sales, agreed to by Plaintiffs and Cal-Maine under a separate agreement provided to the Court for review, choose to exclude themselves from the Settlement Agreement, Cal-Maine has the right to terminate the Settlement. It is the opinion of Plaintiffs' attorneys that the factual information and witness that Cal-Maine must provide will significantly benefit Plaintiffs and will materially assist Class Counsel in further analyzing their claims and in the further prosecution of this Action.

On February 28, 2014, the Court granted preliminary approval of Cal-Maine Settlement, finding it sufficiently fair, reasonable, and adequate to warrant notifying the Settlement Class.

The Cal-Maine Settlement should not be taken as an admission by Cal-Maine of any allegation by Plaintiffs or of wrongdoing of any kind. The Court ordered that Plaintiffs shall provide notice of the Cal-Maine Settlement to all members of the Settlement Class who can be identified through reasonable effort. The Court granted final approval to the Cal-Maine Settlement on October 10, 2014.

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4. How will the Cal-Maine Settlement Fund be distributed?

The $28 million paid by Cal-Maine may be reduced by court-ordered attorneys' fees and reimbursement of litigation expenses, including administration of the Settlement, as approved by the Court. The Settlement Fund will also be reduced by the expense of providing notice to the Class. The remainder of the Cal-Maine Settlement will be distributed on a pro rata basis among the members of the Class who timely and properly submitted a valid Claim Form. Your pro rata share will be based on the dollar amount of your direct purchases of Shell Eggs and Egg Products in the United States compared to the total purchases of Shell Eggs and Egg Products by all Class Members who submitted a timely and valid Claim Form. The Court retains the power to approve or reject, in part or in full, any individual claim of a Class Member based on equitable grounds. Because the alleged overcharge resulting from the conspiracy alleged by Plaintiffs is only a portion of the price paid for Shell Eggs and Egg Products, your recovery will be less than the total amount you paid.

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5. How could I have filed a Claim Form in the Cal-Maine Settlement?

Claim Forms must have been sent by first-class mail postmarked by, or pre-paid delivery service to be hand-delivered by, August 1, 2014, to be considered for distribution.

Any Class Member who did not complete and timely return the Claim Form will not be entitled to share in the Cal-Maine Settlement.

Where records were available to calculate and document the dollar amount of your relevant purchases, you must have used those records to complete the Claim Form.

Where adequate records were not available to calculate your purchases to be listed on the Claim Form, you could have submitted purchase information based on verifiable estimates as directed in the Claim Form.

NOTE: If you filed a valid and timely Claim Form for your Shell Egg or Egg Products purchases in the Settlement with the Moark Defendants, you need not have submitted a new Claim Form in the Cal-Maine Settlement for those same purchases. If you wish to receive an award for purchases that post-date those included in your valid Moark Claim Form, you must have submitted a Claim Form in the Cal-Maine Settlement, but it needed to include only those purchases that post-dated or supplemented those provided in your Moark Claim Form. You will still receive an award based on all of your eligible purchases over the entire Class Period. If you do not wish to receive an award for purchases that were not included in your Moark Claim Form, you need not have submitted a new Claim Form to receive an award from the Cal-Maine Settlement for purchases identified in your Moark Claim Form.

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6. What is the effect of the Court's final approval of the Cal-Maine Settlement?

The Court granted final approval to the Cal-Maine Settlement on October 10, 2014. The Cal-Maine Settlement is binding to all members of the Settlement Class. By remaining part of the Cal-Maine Settlement, you gave up any claims against the Moark Defendants relating to the claims made or which could have been made in this lawsuit.

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7. Who is included in the Sparboe Settlement as Amended?

The original Sparboe Settlement executed on June 8, 2009 defined the Sparboe Settlement Class substantially the same as the Class under the Cal-Maine Settlement, as described above, except that the original Sparboe Class Period included only those persons or entities that purchased Shell Eggs or Egg Products directly from any Producer between January 1, 2000 and October 23, 2009. On August 28, 2013, Plaintiffs and Sparboe amended the Class Period of the Sparboe Settlement to also include purchases of Shell Eggs and Egg Products from October 24, 2009 through February 28, 2014 (the "First Sparboe Amendment"), providing for an extended Class Period. On February 28, 2014, the Court granted preliminary approval to the Sparboe Amendment. All other provisions of the Sparboe Agreement are unchanged and remain binding on the Plaintiffs.

The Sparboe Settlement now has been amended a second time to include direct purchases of Shell Eggs and Egg Products between March 1, 2014 and July 30, 2014 (“Second Sparboe Amendment”).

A copy of the First and Second Sparboe Amendments are available on the Court Documents page of this website.

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8. What does the Sparboe Settlement Provide?

The Sparboe Settlement is between Plaintiffs and Defendant Sparboe only; it does not affect any of the remaining non-settling Defendants, against whom this case continues. Under the Sparboe Settlement, Plaintiffs released Sparboe from all claims arising from the facts in Plaintiffs’ complaint. In exchange, Sparboe agreed to provide substantial and immediate cooperation with Plaintiffs, which the Court determined, in granting final approval to the Sparboe Settlement, conferred real and substantial benefits upon the Class. Plaintiffs included details obtained from Sparboe’s cooperation and relating to the conspiracy in their second amended consolidated complaint filed in December 2009. The Sparboe Settlement is based entirely on cooperation; there is no financial compensation component to the Sparboe Settlement.

Notice of the original Sparboe Settlement was sent to potential Class Members in September 2010. Objections to and exclusions from the Sparboe Settlement were due on November 16, 2010. The Court granted final approval to the Sparboe Settlement on July 16, 2012, finding the Settlement to be sufficiently fair, reasonable, and adequate to the Sparboe Settlement Class.

On August 28, 2013, Plaintiffs and Sparboe amended the Class Period of the Sparboe Settlement to also include purchases of Shell Eggs and Egg Products from October 24, 2009 through February 28, 2014 (the "First Sparboe Amendment"), providing for an extended Class Period.

The Sparboe Settlement now has been amended a second time to include direct purchases of Shell Eggs and Egg Products between March 1, 2014 and July 30, 2014 (“Second Sparboe Amendment”).

The Original Sparboe Settlement, the Class Notice of that Settlement, and the Order granting final approval of the Settlement are available on the Court Documents page of this website.

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9. What is the effect of the Court’s final approval of the First Sparboe Amendment?

If you became a member of the Sparboe Settlement Class solely because of the extended Class Period under the First Sparboe Amendment (i.e., you made no purchases of Shell Eggs or Egg Products directly from any Producer between January 1, 2000 and October 23, 2009, but purchased Shell Eggs or Egg Products from October 24, 2009 to February 28, 2014), and if you did not exclude yourself from the Class, you will be bound by the Sparboe Settlement. By remaining part of the Sparboe Settlement Class as amended you give up any claims against Sparboe relating to the claims made or which could have been made in this lawsuit as provided in the Settlement Agreement, but you retain all claims against all other non-settling Defendants.

If you were included in the Settlement Class as originally defined under the Sparboe Settlement and did not previously exclude yourself, you were already bound by the terms of the Sparboe Agreement and have given up any claims you may have had against Sparboe relating to the claims made or which could have been made in this lawsuit as provided in the Settlement Agreement. You may not now exclude yourself.

The Sparboe Settlement now has been amended a second time to include direct purchases of Shell Eggs and Egg Products between March 1, 2014 and July 30, 2014 (“Second Sparboe Amendment”).

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10. Who represents the Cal-Maine and Sparboe Settlement Classes?

The Cal-Maine and Sparboe Settlement Classes are represented by the following attorneys:

Steven A. Asher
WEINSTEIN KITCHENOFF & ASHER LLC
1845 Walnut Street, Suite 1100
Philadelphia, PA 19103
Michael D. Hausfeld
HAUSFELD LLP
1700 K Street NW, Suite 650
Washington, DC 20006

Stanley D. Bernstein
BERNSTEIN LIEBHARD LLP
10 East 40th Street, 22nd Floor
New York, NY 10016

Stephen D. Susman
SUSMAN GODFREY LLP
560 Lexington Avenue, 15th Floor
New York, NY 10022-6828

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11. How will the lawyers be paid?

The above attorneys and their respective firms are referred to as Class Counsel. Class Counsel, in compensation for their time and risk in prosecuting the litigation on a wholly contingent fee basis, applied to the Court for an award, from the Cal-Maine Settlement Fund, of attorneys’ fees in an amount not to exceed thirty percent of $28 million, as well as the costs and expenses incurred (the “Fee Petition”), including fees and costs expended while providing notice to the Class and while administering the Settlement Fund (including the plan of allocation).

Class Counsel filed their Fee Petition on June 20, 2014. On October 10, 2014, the Court awarded attorney’s fees in the amount of $8,400,000.00 with accrued interest and reimbursement of expenses in the amount of $1,043,551.07 with accrued interest. The Order regarding attorney’s fees and expenses is available on the Court Documents page.

If you are a Class Member and you wished to object to the Fee Petition, you could have filed with the Court an objection to the Petition in writing. In order for the Court to have considered your objection, your objection must have been sent according the instructions provided in the Notice.

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12. When and where did the Court hold a hearing on the fairness of the Cal-Maine Settlement and the First Sparboe Amendment?

The Court held a "Fairness Hearing" at 2:00 p.m. on September 18, 2014 at the following address:

United States District Court
James A. Byrne Federal Courthouse
601 Market Street
Philadelphia, PA 19106-1797

The purpose of the Fairness Hearing was to: (a) determine whether the Cal-Maine Settlement is fair, reasonable, and adequate and whether the Court should enter judgment granting final approval of it; and (b) determine whether the Court should grant final approval to the Sparboe Amendment. The Cal-Maine Settlement was approved on October 10, 2014. The First Sparboe Amendment was approved on October 10, 2014.

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13. How could I have objected to the Cal-Maine Settlement or the First Sparboe Amendment?

The deadline to object to the First Sparboe Amendment and/or the Cal-Maine Settlement (including the Fee Petition) was August 1, 2014. Additional details are available in the Notice.

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14. How could I have excluded myself from the Settlements?

The deadline to request exclusion from the Cal-Maine Settlement was August 1, 2014. If your only purchases of Shell Eggs or Egg Products from any Producer were made on or after October 24, 2009, such that you became a member of the Sparboe Settlement Class solely because of the First Sparboe Amendment, you could have requested exclusion from the Sparboe Settlement only if you submitted an exclusion by August 1, 2014. Additional details are available in the Notice.

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15. What happens if I did nothing?

If you did nothing, you remained a member of both the Cal-Maine Settlement Class and the Sparboe Settlement Class as amended. As a member of these Settlement Classes, you are represented by the law firms listed above in Question No. 10, and you will not be charged a fee for the services of such counsel and any other class counsel. Rather, counsel will be paid, if at all, as allowed by the Court from some portion of whatever money they may ultimately recover for you and other members of the Settlement Class. If you want to be represented by your own lawyer, you may hire one at your own expense.

However, if you did not file a timely and valid Claim Form in the Moark Settlement, you must have submitted a valid Claim Form (see Question No. 5) in order to be considered for any monetary benefit from the Cal-Maine Settlement Fund. If you submitted a Claim Form in the Moark Settlement, you need not have submitted another Claim Form in order to receive an award based on the purchases identified in your Moark Claim Form, but you must have submitted a timely Claim Form in the Cal-Maine Settlement to receive an award based on any purchases not included in the Moark Claim Form.

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