Justia U.S. 3rd Circuit Court of Appeals Opinion Summaries

Articles Posted in Agriculture Law
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In a purported class action, egg purchasers claimed that egg producers conspired to inflate prices by early slaughtering of hens and similar supply-reducing steps; creation of an animal welfare certification program that was actually designed to reduce the egg supply; and coordinated exports of eggs, all as part of a single overarching conspiracy that was anti-competitive per se and unlawful under the Sherman Act, 15 U.S.C. 1. The defendants countered that the court should look at each alleged stratagem of the conspiracy separately and determine whether to apply the per se standard for antitrust liability or the more commonly-applied rule of reason. In summary judgment briefing, the parties focused on the Certification Program, which the court evaluated under the rule of reason. The case proceeded to trial with all three stratagems being evaluated under that standard. Following the jury’s verdict, the court entered judgment for the defendants. The Third Circuit affirmed. Courts can consider the different components of an alleged conspiracy separately when determining which mode of antitrust analysis to apply. The Certification Program was not an express horizontal agreement to reduce the supply of eggs, much less to fix prices and it is not clear that the Program would “have manifestly anticompetitive effects and lack any redeeming virtue.” It was properly analyzed under the rule of reason. View "In re: Processed Egg Products Antitrust Litigation" on Justia Law

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Purchasers of egg products accused suppliers of conspiring to reduce the supply of eggs and increase the price for egg products in violation of the Sherman Act, 15 U.S.C. 1. Plaintiffs alleged that the producers conspired to reduce the population of egg-laying hens, resulting in a reduced supply of eggs and, given the inelasticity of demand, supra-competitive prices. A trade association coordinated a certification program under which participants had to increase their cage sizes and not replace hens that died. Plaintiffs alleged that the proffered animal welfare rationale was a pretext to reduce supply. The district court, citing a bar on indirect purchaser actions, concluded that the purchaser-plaintiffs lacked standing. The Third Circuit reversed. As a matter of first impression, a direct purchaser of a product that includes a price-fixed input has antitrust standing to pursue a claim against the party that sold the product to the purchaser, where the seller is a participant in the price-fixing conspiracy, but the product also includes some price-fixed input supplied by a third-party non-conspirator. The direct relationship between the purchasers and their suppliers and the fact that the suppliers are alleged price-fixing conspirators, not merely competitors of those conspirators, are key factors. Regardless of who collected the overcharge, the purchasers’ econometric analysis purports to show the “difference between the actual [supracompetitive] price and the presumed competitive price” of the egg products they purchased. This purported difference, and the purchasers’ resulting injury, was allegedly a direct and intended result of the suppliers’ conspiracy. View "In Re: Processed Egg Products Antitrust Litigation" on Justia Law

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In 2000, mushroom farmers and related entities formed a cooperative (EMMC) and established minimum pricing policies and programs to improve their market position. EMMC purchased properties and resold them with deed restrictions that prohibited mushroom farming. The Department of Justice invesigated and concluded that EMMC was an agricultural cooperative organized pursuant to the Capper- Volstead Act, 7 U.S.C. 291-92. In 2005, EMMC and DOJ entered into a consent judgment that required EMMC to nullify deed restrictions and prohibited it from imposing restrictions for 10 years. Soon after the consent judgment, private parties brought suits, alleging conspiracy in violation of the Sherman Act and Clayton Act. (15 U.S.C. 1, 2, 18). Unlike the DOJ action, the consolidated class action involved both the property purchase program and minimum pricing policies. The district court held that EMMC was not a proper agricultural cooperative under the Act because one member was not technically a grower of agricultural produce and that the uncontested facts revealed an impermissible price-fixing conspiracy with a non-member mushroom distribution company. The Third Circuit dismissed an appeal, holding that it lacked jurisdiction to hear the question on interlocutory appeal.