A.A. Poultry Farms, Inc. v. Rose Acre Farms, Inc.

Rose Acre Farms, Inc. (Rose Acre) (defendant) was an egg producer and processor. Between 1977 and 1982, Rose Acre doubled its egg production, taking business away from competitors. In the egg industry, which was largely unconcentrated, it was typical for producers to sell their surplus eggs directly to companies that used the eggs to produce finished products. Rose Acre, however, sold its surplus eggs directly to supermarkets at reduced prices. A group of rival egg processors (collectively, the processors) (plaintiffs) sued Rose Acre in federal district court, alleging that Rose Acre’s pricing for its surplus eggs was discriminatory and violated the Robinson-Patman Act. At trial, the processors produced evidence that Rose Acre’s surplus-egg pricing to supermarkets was below the cost of production and was done with intent to harm its competitors. The jury found in favor of the processors. Rose Acre moved for judgment notwithstanding the verdict. Rose Acre presented evidence that the price of its surplus eggs was falling and that it was unlikely to recoup losses caused by its low prices. The district court found that the egg market was competitive, that the evidence presented by the processors did not establish a predatory intent, and that the price Rose Acre charged for its surplus eggs was not below the cost of production. The district court granted Rose Acre’s motion. The processors appealed.