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US jury awards $17.7 mln to Kraft, other producers in egg price-fixing case

Credit: REUTERS/Jim Young

By Mike Scarcella

Dec 1 (Reuters) - Food giants Kraft , General Mills , Kellogg and Nestle on Friday won a $17.7 million damages verdict after persuading a Chicago federal jury that they were overcharged for egg products in a price-fixing conspiracy by the biggest U.S. egg producers and industry trade groups.

The damages award could be tripled under U.S. antitrust law to more than $53 million. It capped the second phase of a two-part trial against Cal-Maine Foods , which is the country's largest egg producer and distributor, and Rose Acre Farms, the second-largest, over claims that they artificially inflated prices.

The same jury on Nov. 21 found the egg producers liable for the alleged antitrust conspiracy after a more than five-week trial. Ridgeland, Mississippi-based Cal-Maine and the other defendants had denied any wrongdoing.

Cal-Maine in a statement on Friday called the damages amount "modest" compared to what the plaintiffs sought. The company said it will "continue to evaluate its options, including, if necessary, an appeal." Lawyers for other defendants did not immediately respond to requests for comment.

The damages award was limited to alleged overpayments during a four-year window in the mid-2000s. The plaintiffs had said in a filing they were seeking $31 million in damages.

"We are extremely grateful for the jury's service and findings. This was an important case for many reasons, and the jury's award recognizes its significance," said Brandon Fox of law firm Jenner & Block, a lead lawyer for the food plaintiffs.

The jury's liability decision held Cal-Maine accountable with other defendants, including trade associations United Egg Producers and United States Egg Marketers.

Cal-Maine would share responsibility for the damages award with the other three defendants.

Attorneys for the defendants argued during the trial that consumer demand and independent corporate interests drove their business decisions.

Cal-Maine has asked U.S. District Judge Steven Seeger to enter judgment in the company's favor, which would moot the jury's verdict, arguing that the plaintiffs presented insufficient evidence on both liability and damages. That request is pending.

The case is Kraft Foods Global Inc v. United Egg Producers Inc, U.S. District Court for the Northern District of Illinois, No. 11-cv-8808.

For plaintiffs: Brandon Fox of Jenner & Block

For United Egg Producers and United States Egg Marketers: Robin Sumner of Troutman Pepper Hamilton Sanders

For Cal-Maine: Patrick Collins of King & Spalding

For Rose Acre: James King of Porter Wright Morris & Arthur (Reporting by Mike Scarcella) ((Mike.Scarcella@thomsonreuters.com;)) Keywords: FOOD ANTITRUST/TRIAL

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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