The Joplin Globe, Joplin, MO

Local News

Discussion

October 8, 2008

Fourth lawsuit filed against Moark LLC

From staff reports

news@joplinglobe.com

NEOSHO, Mo. — An egg-production company with an operation in rural Neosho is now a co-defendant in four federal lawsuits accusing egg producers of conspiring to fix prices in violation of antitrust laws.

Moark LLC was among 13 major U.S. egg producers and three egg-trade groups that were sued Oct. 3 in Pennsylvania federal court by Bemus Point Inn, a restaurant in Bemus Point, N.Y. Moark already was a co-defendant in three other similar suits — two in Pennsylvania, one in Minnesota — filed in late September.

The latest suit levels accusations similar to those raised in the other three: that U.S. egg producers conspired to “artificially control and reduce the supply of eggs” in hopes of creating “artificially high, supracompetitive prices for eggs” in recent years.

Moark, a subsidiary of Land O’Lakes Inc., based in Minnesota, has operations in California, Connecticut and Neosho.

Efforts to obtain comment from a spokeswoman for Land O’Lakes on Tuesday and Wednesday were unsuccessful.

The suit filed last week in Pennsylvania alleges that egg producers lowered the supply of eggs first by reducing the number of hens allowed in a given cage and then by agreeing not to increase the total number of cages to compensate. This change, the suit alleges, was advanced in the guise of animal-welfare concerns but had “absolutely nothing to do with humane practices.”

The suit also alleges that egg producers shrank the domestic supply by exporting eggs first to Europe and the Middle East, and then to Japan and Iraq. In both cases, the producers allegedly exported the eggs at prices below the prevailing U.S. market prices to trigger an increase in domestic prices.

Moark now is the subject of three cases in Pennsylvania alone, all of which have at least five defendants in common.

Somerset Industries, a Pennsylvania-based food processing, packaging and distribution company, sued Moark, two other egg producers and two major egg-trade groups on Sept. 26.

A New York-based restaurant, T.K. Ribbing’s Family Restaurant, filed suit against Moark, 12 other major U.S. egg producers and three egg-trade groups on Sept. 25. The 16 defendants are the same as those in the action filed Oct. 3, although by different plaintiffs represented by different law firms.

ZAZA Inc., a Florida-based bakery, filed suit Sept. 24 in Minnesota against Moark, Golden Oval Eggs LLC and industry giant Michael Foods. The three companies also are co-defendants in the three Pennsylvania lawsuits, although Golden Oval Eggs was dismissed from the Minnesota suit last week by ZAZA.

The U.S. Department of Justice told the Globe last month that it was “investigating the possibility of anti-competitive practices in the egg-products industry” but would not provide any further information.

A spokeswoman for Land O’Lakes previously said the company was cooperating with a Justice Department request for documents pertaining to Moark’s “pricing, marketing and sales” of egg products between January 2002 and late March 2008. Similar documents also have been requested from Golden Oval Eggs and Michael Foods.

Early in 2008, Moark noted, while demonstrating steps to control odor that it had taken at its egg-production operation just outside Neosho, that it had constructed five new confinement houses at a total cost of $15.3 million over the past year.

Moark was still using nine older houses along with the five new ones at the time. Company officials said the five new houses together contained a total of a million hens. The nine older houses had a total of 400,000 hens.





Damages



The four lawsuits in Minnesota and Pennsylvania are seeking triple damages, as well as attorneys’ fees and costs.

Text Only
Local News