In the latest deal to resolve claims that U.S. egg producers stifled supply and gouged customers, Cal-Maine Foods Inc. announced Tuesday that it will pay $28 million to a putative class of direct egg purchasers. The settlement — which must be approved by U.S. District Judge Gene Pratter of the Eastern District of Pennsylvania — still leaves Cal-Maine and its lawyers at Gibson, Dunn & Crutcher fighting price-fixing claims from indirect purchasers and opt-out direct action plaintiffs.
Jackson, Miss.-based Cal-Maine, the country's largest producer and distributor of fresh eggs, is one of about a dozen companies targeted by class-action antitrust lawyers after big spikes in egg prices in 2007 and 2008. Most of the claims were brought on behalf of direct purchasers, including food distributors and large retailers. They alleged that egg producers adopted anti-competitive methods for limiting egg supply, like culling hen populations and adopting mandatory cage-space programs. The dozen or so original defendants included Michael Foods Inc., Daybreak Foods Inc. and Sparboe Foods LLC.
