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June 08, 2010

The Chickens Come Home to Roost

There is big news concerning an ongoing class action lawsuit accusing the nation’s major battery cage egg producers of conspiring to use questionable animal welfare standards to both squeeze birds into tiny cages and squeeze American consumers by illegally fixing prices.

Egg-laying hens in battery cages
The HSUS

In what is looking like a domino effect, Land O’Lakes and its subsidiaries Moark and Norco have become the second set of defendants to wave the white flag in the case—agreeing to pay a whopping $25 million to egg purchasers allegedly defrauded by a price-fixing scheme that drove the price of eggs (and industry profits) to historic highs over the last several years.

As part of the settlement, which still requires court approval, Land O’Lakes, Moark, and Norco must also turn over potentially incriminating documents, and help plaintiffs hold the remaining defendants accountable for their actions.

As I noted back in April, the evidence of egg industry misconduct amassed so far in the case is damning, including this shocking excerpt from a 2003 letter to the United Egg Producers from egg producer Sparboe:

[W]hat concerns us is the “hidden agenda” of the Animal Welfare Program. In short, we believe that if not carried forward properly a strong case could be made that the Animal Welfare Program is, in essence, a program being offered by our trade association and its members to reduce outputs in an effort to increase prices. Naturally that strikes of price fixing to us and we have concerns about future claims of this sort being made against the association and/or its members.

The lawyers for Land O’Lakes, Moark, Norco, and Sparboe all apparently agree.

The only remaining question is what will happen with the companies that have not settled yet—United Egg Producers, Rose Acre, Ohio Fresh Eggs, and Cal-Maine. We’ll be keeping a watchful eye.

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