The 3rd Circuit revived a lawsuit filed by Kraft, General Mills, Kellogg and Nestle against several egg producers in an opinion issued on Jan. 22.
In 2016, District Judge Gene Pratter of the Eastern District of Pennsylvania dismissed the case. He found that, because not all of the egg products purchased by the plaintiffs as ingredients for goods like mayonnaise or waffles were from the alleged conspirators, the plaintiffs were seeking “umbrella damages.” The central allegation of the case contended that the egg producers had intentionally reduced the population of egg-laying hens, thereby reducing the supply of eggs and driving up prices, for nearly a decade.
The 3rd Circuit ultimately reversed the District Court’s grant of summary judgement, concluding that the food manufacturers did have standing, but remanded the case to the District Court for further proceedings.
Relying on the U.S. Supreme Court’s 1983 opinion in Assoc. Gen. Contractors, the 3rd Circuit articulated the following five-factor framework for determining whether direct purchasers can sue when they purchase from multiple suppliers:
(1) the connection between the antitrust violation and the harm to the plaintiff (together with the intent of the defendant to cause that harm);
(2) whether antitrust laws were intended to provide redress to the type of injury the plaintiff alleges;
(3) the directness of the injury;
(4) the existence of more direct victims of the alleged antitrust violations; and
(5) the potential for duplicative recovery or complex apportionment of damages.