2008-10-02 / Local & State

Pa. Lawsuit Alleges Price- Fixing By Egg Producers


PHILADELPHIA (AP) - A New York restaurant has filed a potential class-action suit over alleged pricefixing in the egg industry, days after the Justice Department confirmed a related probe.

The suit, filed Thursday in federal court in Philadelphia, alleges that egg producers conspired to limit domestic egg supplies in order to raise prices - and profits. The suit names more than a dozen egg producers, food companies and trade groups as defendants.

"We've seen the prices just soar in the last couple of years,'' plaintiff's lawyer James Pizzirusso said. "And it can't be explained by increases in fuel or feed.''

The suit was filed on behalf of T.K. Ribbings Family Restaurant in Falconer, N.Y., and involves only the wholesale marketplace, not consumers who buy eggs from retailers.

Gene Gregory, president of United Egg Producers, one of the trade group defendants, did not immediately return a call for comment from The Associated Press late Friday.

Egg prices are at historic highs. The average wholesale price of a dozen eggs rose to $1.14 in the New York area last year - up 43 percent from a year earlier - and continue to climb this year, according to a government economist cited in the suit.

The suit charges that the industry reacted to new animal-husbandry regulations that lowered the number of hens allowed per cage by conspiring to limit egg production and boost exports to manipulate domestic supplies.

"You see this repeatedly in their internal (documents and) newsletters,'' said Pizzirusso, who said some of the plaintiff's evidence comes from whistleblowers.

The other defendants include Hillandale Farms of Gettysburg, Pa.; Golden Oval Eggs of Renvill, Minn.; and Pilgrim's Pride Corp. of Pittsburg, Texas, the nation's largest chicken producer.

The Justice Department's egg probe is also based in Philadelphia.

Golden Oval Eggs and Michael Foods, both Minnesota egg producers, that noted in SEC filings this spring that they had been subpoenaed by the U.S. Attorney's Office in the Eastern District of Pennsylvania.

The subpoenas requested documents for the period between Jan. 1, 2002 through March 27, 2008 relating "primarily to the pricing, marketing, and sales of our egg products,'' both companies wrote in their 10-Q filings.

Both companies noted their intent to cooperate.

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