Kraft Foods Glob. v. United Egg Producers, Inc.

1

KRAFT FOODS GLOBAL, INC., et al., Plaintiffs, v. UNITED EGG PRODUCERS, INC., et al., Defendants.

No. 11-cv-8808

United States District Court, N.D. Illinois, Eastern Division

August 31, 2023

MEMORANDUM OPINION AND ORDER

Steven C. Seeger, United States District Judge

A group of food manufacturers filed this federal antitrust lawsuit about the production of eggs. Relevant here, Plaintiffs allege that egg producers adopted animal-welfare guidelines known as the UEP Certified Program to reduce the supply of eggs. The guidelines increased the size of the enclosures housing egg-laying hens. Bigger henhouses meant fewer hens. Fewer hens meant fewer eggs, and fewer eggs meant higher prices.

Plaintiffs claim that Defendants did not adopt the UEP Certified Program because of animal-welfare concerns. Instead, they agreed to the measures as part of a conspiracy to reduce the supply of eggs.

Defendants respond that everything was on the up-and-up. In fact, they received pressure from grocers to adopt animal-welfare guidelines, not the other way around. According to them consumers demanded humanely raised eggs from the grocers, and the grocers then passed along that pressure to the egg producers. To prove the point, they seek to introduce evidence showing that certain grocers (like Safeway, Publix and Kroger) demanded eggs that complied with the UEP Certified Program.

Plaintiffs seek to exclude evidence about the grocers' preferences at trial. They believe that this evidence is irrelevant and prejudicial, and that certain depositions of non-party witnesses designated under Rule 30(b)(6) are not admissible. Defendants oppose the motion.

For the following reasons, the Court denies in part Plaintiffs' motion in limine to exclude evidence about grocers and certain Rule 30(b)(6) witness testimony. The testimony is relevant and not prejudicial. But the deposition testimony is admissible only if the Rule 30(b)(6) witnesses had personal knowledge as required by Rule 602 of the Federal Rules of Evidence.

Background

This case is about an alleged conspiracy to limit the supply of eggs. Plaintiffs Kraft Foods Global, Inc., The Kellogg Co. General Mills, Inc., and Nestle USA, Inc. are global food processing companies. They purchase eggs for use as ingredients in the foods that they manufacture. They're big egg buyers.

Plaintiffs allege that Defendants United Egg Producers, Inc., United States Egg Marketers, Inc., Cal-Maine Foods, Inc., and Rose Acre Farms, Inc. conspired to limit egg production. See Joint Status Report, at 2 (Dckt. No. 234). From a supply-and-demand perspective, less production meant higher prices.

Plaintiffs are purchasers of egg products, meaning “eggs either whole or separated, that have been removed from their shells and are then processed into dried, frozen, or liquid forms.” In re Processed Egg Prods. Antitrust Litig., 392 F.Supp.3d 498, 502 (E.D. Pa. 2019). They allege that Defendants' conspiracy to reduce the supply of eggs raised the price of egg products. Id. at 506.

Plaintiffs filed suit in December 2011, and then amended the complaint twice. See Cplt. (Dckt. No. 1). The second amended complaint alleges that Defendants conspired to limit the supply of eggs and increase egg prices from at least 1999 through 2008. See Second Am. Cplt., at ¶ 119 (Dckt. No. 73-17). Specifically, Plaintiffs alleged that Defendants agreed to limit egg supply through three anticompetitive practices.

First, Defendants allegedly agreed to adopt animal-welfare guidelines (known as the UEP Certified Program) that increased the size of the enclosures housing egg-laying hens. Id. at ¶¶ 120-39. According to Plaintiffs, the agreement was not based on animal welfare. Instead, it was a ruse to reduce the total space available to house egg-laying hens.

The animal-welfare guidelines allegedly reduced the total supply of eggs. Id. at ¶¶ 12122. Less space for hens meant fewer hens. Fewer hens meant fewer eggs. And fewer eggs meant higher egg prices.

Second, Defendants allegedly agreed to increase egg exports, leaving fewer eggs for the domestic market. Id. at ¶¶ 140-45. The exported eggs were sold at prices lower than the then-current prices in the United States. Id. at ¶ 142. Needless to say, selling at lower prices is not usually the first preference of sellers. But Defendants allegedly made up for the lost revenue with the higher prices in the supply-constrained U.S. market. Id.

Third, Defendants allegedly agreed to “use short-term measures to control supply and artificially maintain and increase the price of eggs.” Id. at ¶ 146. For example, Defendants allegedly agreed “to reduce the national flock by seven million hens in an effort to increase prices.” Id. at ¶ 148. Again, fewer hens leads to fewer eggs, and fewer eggs leads to higher egg prices.

The complaint alleges that Defendants used all three anticompetitive tactics to restrict the supply of eggs and successfully increase egg prices. Id. at ¶ 167. In sum, Plaintiffs allege that Defendants artificially reduced the supply and increased the prices of eggs in violation of the federal antitrust laws. Id. at ¶¶ 194-96.

Soon after Plaintiffs filed their complaint, the case was transferred to the Eastern District of Pennsylvania by the Judicial Panel on Multidistrict Litigation. See 1/3/12 Transfer Order (Dckt. No. 13). While the case was part of the MDL proceedings, the parties completed discovery and filed dispositive pretrial motions. See Joint Status Report, at 2 (Dckt. No. 234). After the MDL court denied Defendants' second motion for summary judgment, the case was transferred back to this district for trial. See In re Processed Egg Prods. Antitrust Litig., 392 F.Supp.3d 498; Conditional Remand Order (Dckt. No. 14).

Meanwhile, back in the Eastern District of Pennsylvania, Judge Pratter presided over two trials in cases brought by different plaintiffs in the MDL proceedings. This Court summarized the history of these trials in more depth in its Opinion granting Defendants' motion to bifurcate the trial. See 8/11/23 Mem. Opin. & Order, at 7-9 (Dckt. No. 272). So, the Court will be brief.

The first trial was brought by a class of wholesale egg and egg products purchasers. The second trial was brought by wholesale purchasers who opted out of the class (known as Direct Action Plaintiffs) and originally filed their case in the Eastern District of Pennsylvania. During pretrial proceedings, Judge Pratter grouped the Plaintiffs here with the Direct Action Plaintiffs. Id. at 5.

Some of the Direct Action Plaintiffs in the second trial were grocery stores who purchased both eggs and egg products. See Joint Status Report, at 3 (Dckt. No. 234) (“The second trial began in October 2019. It involved supermarket Direct Action Plaintiffs ....”); In re Processed Egg Prods. Antitrust Litig., 392 F.Supp.3d at 501-02 (“The DAPs are purchasers of egg products who claim that they paid more for those egg products than they should have because of the defendants' alleged conspiracy.”) (footnote omitted). Both trials ended in defense verdicts. Id. at 7-8.

During discovery, the parties developed evidence about certain grocers' preferences for the animal-welfare guidelines in the UEP Certified Program. For example, the parties took the depositions of representatives from grocery stores and developed evidence about whether the grocers “supported or required UEP certified eggs.” See Pls.' Mtn. to Exclude, at 6 (Dckt. No. 180); see also id. at 5 nn.2-5, 6 n.6. Documents produced in discovery showed that certain grocers “required that their egg suppliers meet the UEP Guidelines.” See Defs.' Resp., at 7 (Dckt. No. 194).

Plaintiffs at both trials filed motions before Judge Pratter to exclude evidence that the defendants joined the UEP Certified Program because of customer demand. See 3/22/18 Order, In re Processed Egg Prods. Antitrust Litig., No. 08-md-2002 (E.D. Pa. 2018) (Dckt. No. 1658); 9/24/19 Order, In re Processed Egg Prods. Antitrust Litig., No. 08-md-2002 (E.D. Pa. 2019) (Dckt. No. 1982). Judge Pratter denied both motions and permitted the defendants to introduce evidence of grocer demand for UEP-certified eggs. Id.

Following in the footsteps of the other plaintiffs in the MDL, Plaintiffs here moved to exclude or limit evidence about the grocers' views on the UEP Certified Program. See Pls.' Mtn. to Exclude (Dckt. No. 180). Defendants oppose the motion. See Defs.' Resp., at 9 (Dckt. No. 194).

Legal Standard

Trial courts have broad discretion in ruling on evidentiary issues before and during trial. See Bridgeview Health Care Ctr Ltd. v. Clark, 816 F.3d 935, 939 (7th Cir. 2016); Whitfieldv. Int'l Truck & Engine Corp., 755 F.3d 438, 447 (7th Cir. 2014). “Although the Federal Rules of Evidence do not explicitly authorize in limine rulings, the practice has developed pursuant to the district court's inherent authority to manage the course of trials.” Luce v. United States, 469 U.S. 38, 41 n.4 (1984); see also Dietz v. Bouldin, 579 U.S. 40, 45 (2016) (“The Federal Rules of Civil Procedure set out many of the specific powers of a federal district court,” but “they are not all encompassing,” for example, they make no provision “for the power of a judge to hear a motion in limine.”).

“Trial courts issue rulings on motions in limine to guide the parties on what evidence it will admit later in trial. As a trial progresses, the presiding judge remains free to alter earlier rulings.” Perry v. City of Chicago, 733 F.3d 248, 252 (7th Cir. 2013). Regardless of the Court's initial ruling on a motion in limine, the Court may adjust its ruling during the course of trial. See Farfaras v. Citizens Bank & Tr. of Chicago, 433 F.3d 558, 565 (7th Cir. 2006).

A motion in limine “is an...