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Cal-Maine lawsuit dismissed in Texas

TAGS: Business
Shutterstock/iStock/Thinkstock Gavel court decision
Company says COVID-19 caused massive disruption in every sector of economy, including egg industry.

A lawsuit alleging that Cal-Maine Foods price gouged during the COVID-19 pandemic has been dismissed by a district court in Texas.

Texas attorney general Ken Paxton filed the lawsuit in April, alleging that the largest U.S. egg producer took unfair advantage of the Texas governor’s COVID-19 disaster declaration by raising the price of eggs by around 300%. This was done without any supply issues or significant disruptions, the lawsuit alleged.

The filing stated that Cal-Maine’s prices for generic eggs before COVID-19 had been hovering at around $1/doz., but during the pandemic, generic egg market prices were driven to more than $3/doz.

“As recently as April 9, 2020, Cal-Maine delivered a batch of generic eggs to a Texas mom-and-pop business, charging $3.32 for a dozen generic jumbo eggs and $3.44 for a dozen generic large brown eggs. This was a huge jump from Cal-Maine’s average generic egg price from December 2019 to February 2020, which was $1.02,” the filing said.

At the time, Cal-Maine explained that the COVID-19 pandemic had caused a massive disruption in every sector of the economy, including the egg industry.

“Retail demand for eggs reached historically high levels, and egg prices increased significantly in line with those demand trends. However, egg prices have since declined quickly to pre-COVID-19 levels.”

Additionally, the company said the domestic egg market is intensely competitive and highly volatile, even under normal market circumstances.

Cal-Maine filed a motion to dismiss the lawsuit, which was granted, with prejudice, on Aug. 13 in the District Court of Harris County, Texas.

“We are grateful the court dismissed with prejudice all claims brought by the state of Texas against Cal-Maine Foods. As we demonstrated to the court in our court filings and during oral argument, Cal-Maine Foods has never engaged in price gouging,” the company said in a statement. “Since 1957, we have strived to operate with honesty and integrity and will continue to do so going forward.”

The company further stated that it will continue its efforts to help those affected by COVID-19 by having employees follow applicable government health guidelines and supporting the communities it serves through humanitarian efforts.

Headquartered in Jackson, Miss., Cal-Maine sells the majority of its shell eggs in states across the southwestern, southeastern, midwestern and mid-Atlantic regions of the U.S.

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