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

• Docket Number: 11-cv-8808
• Decision Date: 31 August 2023
• Citation: Kraft Foods Glob. v. United Egg Producers, Inc., 11-cv-8808 (N.D. Ill. Aug 31, 2023)
• Parties: KRAFT FOODS GLOBAL, INC., et al., Plaintiffs, v. UNITED EGG PRODUCERS, INC., et al., Defendants.
• Court: U.S. District Court — Northern District of Illinois

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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

The Court grants in part and denies in part Plaintiffs' motion in limine to exclude evidence about state statutes enacted after 2008(Dckt. No. 174).The admissibility of evidence about state statutes enacted after 2008 depends in large part on the purpose for offering the evidence.

The parties may offer evidence of post-2008 state statutes to prove or disprove Plaintiffs' antitrust injury or damages.But Defendants may not offer the post-2008 state statutes as evidence that their pre-2008 adoption of the UEP Certified Program was not pretextual.Decisions by state legislatures after 2008 do not shed much light on why Defendants did what they did before 2008.

Background

This case is about an alleged conspiracy to limit the supply of eggs.PlaintiffsKraft 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 DefendantsUnited Egg Producers, Inc.(“UEP”), United States Egg Marketers, Inc.Cal-Maine Foods, Inc., and Rose Acre Farms, Inc. conspired to limit egg production.SeeJoint Status Report, at 2(Dckt. No. 234).From a supply-and-demand perspective, less production meant higher prices.

The Court has summarized the procedural history and Plaintiffs' allegations in greater depth in its Orders resolving other pretrial motions.See, e.g., 8/21/23 Mem. Opin. & Order, at 2-5(Dckt. No. 277);8/11/23Mem Order & Order, at 2-9(Dckt. No. 272).So, the Court will be brief.

The second amended complaint alleges that Defendants conspired to limit the supply of eggs and increase egg prices from at least 1999 through 2008.SeeSecond Am. Cplt., at¶ 119 (Dckt. No. 73-17).For the motion at hand, the timing is especially important.Plaintiffs allege that the conspiracy ended in 2008.But the effects of the conspiracy lasted until 2012.

Plaintiffs allege that Defendants agreed to limit egg supply through three anticompetitive practices.One of those practices involved the size of enclosures for hens, ostensibly for animalwelfare reasons.

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.

During the two trials held in the MDL court, the defendants introduced evidence of state animal-welfare laws enacted after 2008 that adopted aspects of the UEP Certified Program.Both sets of plaintiffs filed motions in limine to exclude“any reference to state laws enacted after 2008 that adopt the UEP Guidelines on Animal Husbandry, UEP Certified Program, or similar requirements.”See9/24/19 Order, In re Processed Eggs Antitrust Litig., 08-md-2002(E.D. Pa.2019)(Dckt. No 1981);see also3/29/18 Order, In re Processed Eggs Antitrust Litig., 08-md-2002(E.D. Pa.2018)(Dckt. No. 1672)(“The DPPs argue that the existence of state laws enacted after the conspiracy period should be excluded as irrelevant and prejudicial ....”).

Judge Pratter denied both motions.She found that evidence of state laws enacted after 2008 was relevant for two reasons.

First, “[w]hile the mere existence of the laws may not be relevant to the [plaintiffs'] prima facie case, the laws are relevant to the defendants' claim that they created this animal welfare program under intense outside pressure from animal rights groups.In that type of environment, it could possibly make sense for companies to coordinate some kind of ‘selflegislation' rather than wait for lawmakers to do so.These laws then could be evidence of the supposed pressure that animal rights groups were applying to egg producers and lawmakers regarding hen welfare.”See3/29/18 Order, In re Processed Eggs Antitrust Litig., 08-md-2002(E.D. Pa.2018)(Dckt. No. 1672);see also9/24/19 Order, In re Processed Eggs Antitrust Litig., 08-md-2002(E.D. Pa.2019)(Dckt. No. 1981)(“The defendants intend to argue that they were under intense pressure from animal welfare groups and undertook the animal welfare guidelines as a way to combat that pressure.These later-enacted laws may be probative on that point.”).

Judge Pratter recognized that evidence of the state laws might support multiple inferences.So, plaintiffs would “be well within their right to counter-argue that the laws are solely the result of the defendants' own lobbying efforts.”See9/24/19 Order, In re Processed Eggs Antitrust Litig., 08-md-2002(E.D. Pa.2019)(Dckt. No. 1981).But the jury would decide “which side to believe and how much they believe.”Id.

Second, evidence of post-2008 state laws was relevant to the testimony of the plaintiffs' economics experts.The experts opined that the conspiracy reduced the supply of eggs.SeeIn re Processed Eggs Antitrust Litig., 392 F.Supp.3d 498, 504(E.D. Pa.2019)(“Dr. Baye concluded that the conspiracy - in particular, the cage-size restrictions and ban on backfilling - was statistically significant in reducing the overall flock size and egg production.”).

To reach this conclusion, the experts needed to control for other factors that reduced the supply of eggs.Id.That is, other factors might have caused a reduction in egg supply, too.The experts needed to account for those factors, so that the alleged conspiracy was not to blame for a reduction in supply caused by something else.State laws were one such factor, because state laws might have reduced the supply of eggs.

For example, in the Direct Action Plaintiff trial, the plaintiffs offered the analysis of their expert, Dr. Baye (he is Plaintiffs' expert in this case, too).They argued that Dr. Baye “adequately controlled for the impact of state laws in his analysis.”Id.The defendants disagreed.

“To attack his modeling,” Judge Pratter permitted the defendants to discuss whether Dr. Baye “disentangled the production effects of the alleged conspiracy from these laws in several states.”See9/24/19 Order, In re Processed Eggs Antitrust Litig., 08-md-2002(E.D. Pa.2019)(Dckt. No. 1981).To do so, the defendants needed to introduce evidence of the state laws, including what they enacted, and when.

Judge Pratter concluded that “[t]he probative value in evaluating the defendants' alleged response to animal welfare groups and the legitimacy of Dr. Baye's analysis is not outweighed by any danger of unfair prejudice, confusing the issues, or misleading the jury.”Id.

Following in the footsteps of the plaintiffs in the MDL court, Plaintiffs in the case at hand moved to exclude evidence of laws enacted after 2008 when it comes to liability.See Pls.'Mtn. to Exclude State Laws (Dckt. No. 174).Defendants oppose the motion.See Defs.'Resp.(Dckt. No. 193).

Legal Standard

Trial courts have broad discretion in ruling on evidentiary issues before and during trial.SeeBridgeview 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 alsoDietz 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.SeeFarfaras v. Citizens Bank & Tr. of Chicago, 433 F.3d 558, 565(7th Cir.2006).

A motion in limine“is an important tool available to the trial judge to ensure the expeditious and evenhanded management of the trial proceedings.”Jonasson v. Lutheran Child & Fam. Servs., 115 F.3d 436, 440(7th Cir.1997).It “permits the trial judge to eliminate from further consideration evidentiary submissions that clearly ought not be presented to the jury because they clearly would be inadmissible for any purpose.”Id.

So, from the get-go, this Court underscores that the following rulings are preliminary.This Court might learn more as the case unfolds, and that additional information may change this Court's assessment of the admissibility of the evidence.But in the meantime, this Court makes the following rulings so that the parties can plan ahead and prepare for trial accordingly.

Under Federal Rule of Evidence 401, evidence is relevant if “it has any tendency to make a fact more or less probable than it would be without the evidence” and “the fact is of consequence in determining the action.”SeeFed.R.Evid. 401;United States v. Boros, 668 F.3d 901, 907(7th Cir.2012)....