`
`PRECEDENTIAL
`UNITED STATES COURT OF APPEALS
`FOR THE THIRD CIRCUIT
`_____________
`
`No. 19-1088
`_____________
`
`IN RE: PROCESSED EGG PRODUCTS ANTITRUST
`LITIGATION
`
` T.K. RIBBINGS FAMILY RESTAURANT, LLC;
`JOHN A. LISCIANDRO, DBA Lisciandro’s Restaurant
` EBY-BROWN COMPANY LLC; KARETAS
`FOODS INC.,
` Appellants
`_____________
`
`No. 19-1188
`_____________
`
`IN RE: PROCESSED EGG PRODUCTS ANTITRUST
`LITIGATION
`
` Rose Acre Farms, Inc,
` Appellant
`_______________
`
`On Appeal from the United States District Court
`for the Eastern District of Pennsylvania
` (D.C. No. 2-08-md-02002)
`District Judge: Hon. Gene E.K. Pratter
`
`
`
`_______________
`
`Argued
`March 25, 2020
`
`
`Before: JORDAN, RESTREPO, and FUENTES, Circuit
`Judges.
`
`(Filed: June 22, 2020)
`_______________
`
`
`Ronald J. Aranoff, Esq.
`Wollmuth Maher & Deutsch
`500 Fifth Avenue
`12th Floor
`New York, NY 10110
`
`Stanley D. Bernstein, Esq.
`Bernstein Liebhard
`10 East 40th Street
`22nd Floor
`New York, NY 1001
`
`Michael D. Hausfeld, Esq.
`Hausfeld
`1700 K Street, N.W.
`Suite 650
`Washington, DC 20006
`
`
`
`
`
`
`
`
`2
`
`
`
`Stephen R. Neuwirth, Esq.
`Kathleen M. Sullivan, Esq. [ARGUED]
`Quinn Emanuel Urquhart & Sullivan
`51 Madison Avenue
`22nd Floor
`New York, NY 10010
`
`Mindee J. Reuben, Esq.
`Lite DePalma Greenberg
`1835 Market Street
`Suite 2700
`Philadelphia, PA 19103
`
`Stephen D. Susman, Esq.
`Susman Godfrey
`1301 Avenue of the Americas
`32nd Floor
`New York, NY 10019
` Counsel for Appellants T.K. Ribbings Family
`Restaurant, LLC;
` John A. Lisciandro, DBA Lisciandro’s Restaurant;
` Eby-Brown Company LLC; Karetas Foods Inc.
`
`Donald M. Barnes, Esq.
`Jay L. Levine, Esq. [ARGUED]
`Porter Wright Morris & Arthur
`2020 K Street, N.W.
`Suite 600
`Washington, DC 20006
`
`
`
`
`
`
`
`
`3
`
`
`
`James A. King, Esq.
`Porter Wright Morris & Arthur
`41 South High Street
`Suite 2900
`Columbus, OH 43215
`
`Leah A. Mintz, Esq.
`Robert M. Palumbos, Esq.
`Duane Morris
`30 South 17th Street
`United Plaza
`Philadelphia, PA 19103
` Counsel for Appellee Rose Acre Farms, Inc.
`
`Michael A. Lindsay
`Dorsey & Whitney
`50 South Sixth Street – Ste. 1500
`Minneapolis, MN 55402
` Counsel for Amicus National Council of Farmer
`Cooperatives
`
`_______________
`
`OPINION OF THE COURT
`_______________
`
`
`
`JORDAN, Circuit Judge.
`
`In this antitrust class action brought by egg purchasers,1
`
`the plaintiffs claim that egg producers conspired to inflate
`
`1 Claims were also brought by the purchasers of egg
`products, but those claims are not now at issue.
`
`
`
`4
`
`
`
`prices through three stratagems: (1) early slaughtering of hens
`and similar supply-reducing steps; (2) creation of an animal-
`welfare program that was actually designed to reduce the egg
`supply; and (3) coordinated exports of eggs. Before the
`District Court, the plaintiffs argued that all three of those
`contrivances were part of a single overarching conspiracy that
`was anticompetitive per se and therefore unlawful under the
`Sherman Act, 15 U.S.C. § 1 et seq. The defendants countered
`that the District Court should look at each alleged stratagem of
`the conspiracy separately and determine whether to apply the
`per se standard for antitrust liability or, instead, the more
`commonly applied rule of reason. In summary judgment
`briefing, the parties focused on one of the three alleged
`stratagems, and the District Court decided to evaluate it under
`the rule of reason. The case then proceeded to trial with all
`three stratagems being evaluated under
`that standard.
`Following the jury’s verdict, the District Court entered
`judgment for the defendants.
`
`The plaintiffs’ primary argument on appeal is that,
`contrary
`to
`the District Court’s approach,
`the alleged
`conspiracy should have been evaluated under the standard of
`per se illegality rather than the rule of reason. We conclude
`that the District Court was right and, accordingly, will affirm.
`
`BACKGROUND
`
`The plaintiffs represent a class of “[a]ll individuals and
`entities that purchased shell eggs produced from caged birds in
`the United States directly from Defendants during the Class
`Period from September 24, 2004 through December 31,
`
`I.
`
`
`
`
`5
`
`
`
`2008.”2 (J.A. 125.) Defendant Rose Acre Farms, Inc. (“Rose
`Acre”), the only defendant left in the case,3 sells shell eggs and
`egg products for the food service industry. Rose Acre is a
`member of both the United Egg Producers (“UEP”) and the
`United States Egg Marketers (“USEM”), which are trade
`groups representing egg producers.
`
`that Rose Acre
`the plaintiffs allege
`As noted,
`participated in a conspiracy to reduce the supply of eggs by a
`variety of means. First, they say that, during the class period,
`UEP told its members to follow short-term supply-reducing
`recommendations, including slaughtering hens earlier than had
`previously been done, causing hens to molt early,4 and
`reducing the hatching of chickens. The plaintiffs argue that
`
`2 The plaintiffs representing the class are: T.K.
`Ribbing’s Family Restaurant, LLC, a restaurant in Falconer,
`New York; John A. Lisciandro d/b/a Lisciandro’s Restaurant,
`a restaurant in Jamestown, New York; Eby-Brown Company
`LLC, a convenience store supplier and wholesale food
`distributor based in Naperville, Illinois; and Karetas Foods
`Inc., a Reading, Pennsylvania-based food distributor to
`institutions, restaurants, and retailers.
`
` 3
`
` The plaintiffs originally sued several other defendants
`with whom they have since settled. Rose Acre and two other
`defendants went to trial. The plaintiffs only appeal the verdict
`as to Rose Acre.
`
` 4
`
` “Molting is the process whereby hens lose their
`feathers and regrow them—hens lay no eggs when molting.”
`In re Processed Egg Prods. Antitrust Litig., 312 F.R.D. 124,
`130 n.2 (E.D. Pa. 2015) (“Processed Egg Prods. I”).
`
`
`
`6
`
`
`
`those recommendations were explicit production restrictions,
`the purpose of which was to reduce the supply of eggs. Rose
`Acre does not explain why UEP made those recommendations
`but does emphasize that they were nothing more than
`recommendations. And, according to Rose Acre, it is unclear
`whether the suggested practices actually did reduce the supply
`of eggs. For example, Rose Acre contends that early molting
`of a hen would temporarily halt the hen’s egg production for a
`few weeks but should thereafter have increased egg production
`and the life span of the hen.
`
`Second, the plaintiffs allege that a UEP certification
`program (“the Certification Program” or “the Program”) that
`was promoted as a set of measures for animal welfare was
`actually intended to reduce the supply of eggs. The Program
`required egg producers to put fewer chickens in each cage to
`give the chickens more space. It also prohibited producers
`from backfilling, that is, replacing caged hens that had died.
`Under the Program, eggs would be labeled as “UEP Certified”
`only if 100% of a producer’s eggs were produced in
`compliance with the Program’s rules. In response to the charge
`that the Certification Program was designed to drive down
`supply and so drive up prices, Rose Acre says that the Program
`was developed by animal welfare scientists for humane
`purposes and that it did not limit the production of eggs. Rose
`Acre emphasizes that the Program’s guidelines did not limit
`the number of hens a producer could own, the number of hen
`houses a producer could use, or the number of eggs a producer
`could sell. Additionally, Rose Acre asserts that the prohibition
`on backfilling did not necessarily reduce the supply of eggs
`because it tends to prevent disease, social competition, and
`stress within a flock – all of which lead to increased mortality
`and decreased egg production.
`
`
`
`7
`
`
`
`
`Third, the plaintiffs contend that UEP conspired with its
`members, through USEM, to collectively export eggs at below-
`market prices in order to inflate domestic egg prices. Rose
`Acre responds that the eggs it exported were surplus eggs not
`ordered by regular customers, and that any price effects were
`transitory because the exports represented such a small
`proportion of the eggs produced.
`
`The plaintiffs’ appeal centers on the standard for
`evaluating the lawfulness of actions taken by Rose Acre and its
`co-defendants. As more fully described herein, restraints on
`trade are typically judged under what is called the “rule of
`reason,” which basically asks whether, in light of all the
`circumstances in a case, the restraint in question is an
`unreasonable burden on competition. See infra pp. 13-14.
`Some restraints, however, are so manifestly anticompetitive
`that they do not require extensive analysis and are treated as
`illegal per se. Whether to apply the rule of reason or the per se
`standard has been one of the hotly-contested issues throughout
`this case.
`
`It first arose, though, in companion cases when certain
`defendants filed a motion for summary judgment. A separate
`set of plaintiffs – the so-called Direct Action Plaintiffs or
`“DAPs” – had decided to file their own antitrust suits rather
`than participate in this class action. Their cases were then
`consolidated with this one for pre-trial proceedings. In
`litigating a summary judgment motion in the DAP cases, the
`defendants attacked the allegations related to the Certification
`Program, contending that the Program could not possibly
`constitute a per se violation of the Sherman Act. They argued
`that “[t]he Program and its components are not a naked
`
`
`
`8
`
`
`
`least plausible
`they produce at
`restriction on supply,
`procompetitive benefits, and they make up a quality standard,
`which itself provides procompetitive benefits to consumers and
`producers.” (J.A. 2172-73.) Although that motion for
`summary judgment was filed in the DAP cases, not this one,
`the District Court permitted the representative plaintiffs here to
`file briefing to argue that the per se rule should apply, since the
`same issue was in play in this case. In their brief, the plaintiffs
`said that the per se rule ought to apply because the defendants
`engaged in a horizontal conspiracy to reduce the supply of eggs
`in order to raise prices. The plaintiffs also argued that the
`alleged conspiracy had to be looked at as a whole, so it was
`inappropriate to consider the different contrivances of the
`conspiracy separately.
`
`individual
`that each
`The District Court decided
`component of the alleged conspiracy could be considered
`separately and that the rule of reason should apply to the
`Certification Program, the only component on which the Court
`was asked to rule. The Court emphasized that the rule of
`reason
`is
`the usual standard
`for
`judging allegedly
`anticompetitive actions, and it explained that “[a]llowing the
`plaintiffs’ characterization of the defendant’s conduct as
`comprising a single conspiracy as dispositive for purposes of
`application of per se or rule of reason analysis would
`completely subsume the rule of reason in most, if not all
`circumstances.” In re Processed Egg Prods. Antitrust Litig.,
`206 F. Supp. 3d 1033, 1040 (E.D. Pa. 2016) (“Processed Egg
`Prods. II”).
`
`In rejecting the per se standard, the Court said that the
`“UEP Certifi[cation] Program does not involve an express
`agreement among competitors to restrain supply and … the
`
`
`
`9
`
`
`
`record contains evidence indicating that the certifi[cation]
`program provided certain procompetitive benefits.” Id. at
`1045. The Court indicated that the plaintiffs, despite their
`allegations, had not provided any evidence that the Program
`was an effort to hike prices by restricting the supply of eggs.
`Accepting several defense arguments, the Court declared that
`there were some plausible procompetitive benefits to the
`Program, including that increased cage space, although
`limiting the number of hens, could increase the hens’
`productivity because they would be healthier and less stressed,
`and that the prohibition on backfilling could reduce disease and
`lead to the production of more eggs. The Court also observed
`that the Program did not limit the number of hens a producer
`could own or the number of eggs a producer could produce.
`Finally, the Court noted that the supply of eggs went up during
`the class period, and thus the plaintiffs would need to present
`some econometric analysis to explain their contention that the
`national egg supply would have increased more rapidly but for
`the defendants’ conduct. In light of all that, the District Court
`concluded that the rule of reason, not the per se standard,
`should apply to the Certification Program.
`
`When it came time to try the present case, neither side
`contested the decision that the rule of reason would be used to
`judge the Program, and neither filed a pre-trial motion asking
`the Court to rule on the standard to be applied to the other
`components of the alleged conspiracy.5 Instead, before trial
`
`5 A few months before trial in this case, the plaintiffs
`filed a motion that they styled as a “Motion to Confirm” that
`the per se rule would apply to the claim of an overarching
`conspiracy to reduce supply. In that motion, they said simply
`that it would be unfair to apply the rule of reason in this case
`
`
`
`10
`
`
`
`and in response to the Court’s inquiry about whether the
`plaintiffs would ask the jury to find three conspiracies or one
`overarching conspiracy, the plaintiffs said that they were
`
`prepared to try the case under the Rule of Reason
`on the single question of whether there was a
`single conspiracy to reduce the supply of eggs
`and thereby raise prices. So that it would be just
`a one-question case, whether there was a single
`conspiracy. Plaintiffs would preserve their right
`to appeal the Court’s earlier determinations on
`the Rule of Reason[.]
`
`(J.A. 1283-84.) The plaintiffs filed proposed jury instructions
`based on the rule of reason standard. Their proposed verdict
`form required the jury to determine whether “the conspiracy
`unreasonably restrained trade[.]” (J.A. 756.)
`
`
`because they had alleged from the beginning that the
`defendants had engaged in a single conspiracy to reduce the
`supply of eggs, and that, by not filing a motion for summary
`judgment, the defendants had forfeited their chance to argue
`that the rule of reason should apply. The District Court denied
`the plaintiffs’ motion. It rejected the forfeiture argument and
`also saw no reason to deviate from its prior determination in
`the DAP cases that the rule of reason applies in assessing the
`UEP Certification Program. The Court did not rule on whether
`the rule of reason or the per se rule should apply to the
`components besides the Certification Program but rather
`requested that the parties file separate motions on what
`standard should apply to those other components, if the parties
`wanted a ruling. No party submitted any such motion.
`
`
`
`11
`
`
`
`After a five-week trial, the District Court told the jury,
`
`among other things, that, in order to rule for the plaintiffs, it
`had to find, “[f]irst, the existence of a contract, combination,
`or a conspiracy between or among at least two separate
`entities[, and s]econd, that the contract, combination, or
`conspiracy unreasonably restrains trade.” (J.A. 1021.) The
`Court asked whether the parties had any objection to the
`instructions, and no one objected. The verdict form asked:
`
`
`1. Do you find, by a preponderance of the
`evidence, that there was a single overarching
`conspiracy to reduce supply comprised of all
`three of (1) short term supply recommendations,
`(2)
`the United Egg Producers
`(UEP)
`Certifi[cation] Program, and (3) United States
`Egg Marketers (USEM) exports?
`
`2. Do you find, by a preponderance of the
`evidence, that [the defendants] participated in the
`conspiracy to reduce supply?
`
`3. Do you find, by a preponderance of the
`evidence,
`that
`the conspiracy
`imposed an
`unreasonable restraint on supply?
`
`
`(J.A. 760.) The jury answered: “Yes” to question 1 and “Yes”
`as to Rose Acre for question 2. It answered “No” to question
`3. Because it found that the conspiracy did not unreasonably
`restrain supply, the jury did not reach the issue of injury. No
`one objected to the verdict or otherwise voiced concern about
`the consistency of the jury’s answers, and the District Court
`entered judgment for the defendants.
`
`
`
`
`12
`
`
`
`The plaintiffs later filed a motion under Federal Rule of
`Civil Procedure 59(e) to alter or amend the judgment. They
`argued that the jury’s finding of the existence of an overarching
`conspiracy to reduce supply was “new evidence” and that it
`mandated the application of the per se rule and entry of
`judgment for them. The Court was unpersuaded. It rejected
`the notion that the jury’s verdict constituted evidence. And it
`again rejected the plaintiffs’ argument that the per se standard
`should apply, stating that “the Court’s legal analysis does not
`have to conform to the subsequent jury’s verdict; the jury’s
`verdict is instead an outgrowth of the Court’s legal rulings
`because those rulings create the universe in which the jury
`makes its decisions.” In re Processed Egg Prods. Antitrust
`Litig., No. 08-md-2002, 2018 WL 6592990, at *4 (E.D. Pa.
`Dec. 14, 2018) (“Processed Egg Prods. III”). The Court also
`noted that the plaintiffs “opted to try the case under the rule of
`reason as one overarching conspiracy[,]” after the ruling on the
`applicability of the rule of reason, and that the jury’s verdict
`was “entirely consistent with the rule of reason.” Id.
`
`This appeal followed.6
`
`
`
`6 Rose Acre cross-appealed, with its appeal being
`expressly contingent on a decision to vacate the judgment in its
`favor. Because we will affirm, we need not address the cross-
`appeal.
`
`
`
`
`13
`
`
`
`II.
`
`DISCUSSION7
`
`The plaintiffs’ fundamental position is that the District
`Court erred in determining the rule of reason, rather than the
`per se standard, should guide the antitrust analysis in this case.
`They argue, first, that the Court should not have looked at the
`components of the alleged conspiracy separately, but rather
`was required to look at the defendants’ actions as a single,
`overarching conspiracy, as the plaintiffs alleged. They next
`argue that, because the alleged conspiracy was a horizontal
`combination to reduce supply and raise prices, the per se
`standard applied. Finally, they say that, even if the District
`Court did not err in determining before trial that the rule of
`reason was the correct standard, the jury’s finding that Rose
`Acre participated in a single, overarching conspiracy to reduce
`the supply of eggs mandates application of the per se rule and
`judgment in their favor. We will address each of those three
`
`
`7 The District Court had jurisdiction under 28 U.S.C.
`§ 1331, and we have jurisdiction under 28 U.S.C. § 1291. “The
`selection of a mode of antitrust analysis is a question of law
`over which we exercise plenary review.” Deutscher Tennis
`Bund v. ATP Tour, Inc., 610 F.3d 820, 829 n.7 (3d Cir. 2010).
`“We review a District Court’s denial of a Rule 59(e) motion
`for relief from judgment for abuse of discretion (except for
`questions of law, which are subject to plenary review).” United
`States ex rel. Customs Fraud Investigations, LLC v. Victaulic
`Co., 839 F.3d 242, 248 (3d Cir. 2016).
`
`
`
`
`14
`
`
`
`arguments in turn, all of which are flawed in one way or
`another.8
`
`Before that, however, we highlight the distinction
`between the two modes of analysis at issue, the rule of reason
`and the per se standard of liability. Section 1 of the Sherman
`Act prohibits “[e]very contract, combination in the form of
`trust or otherwise, or conspiracy, in restraint of trade or
`commerce among the several States[.]” 15 U.S.C. § 1. The
`Supreme Court “has never taken a literal approach to [§ 1’s]
`language. Rather the Court has repeated time and again that
`§ 1 outlaw[s] only unreasonable restraints.” Leegin Creative
`Leather Prods., Inc., v. PSKS, Inc., 551 U.S. 877, 884 (2007)
`(citations and internal quotation marks omitted) (emphasis
`added). The general analytical approach, then, is to evaluate
`alleged violations of § 1 under the rule of reason. Id. That rule
`
`8 Rose Acre argues that the plaintiffs failed to preserve
`their argument that the per se standard applies to the alleged
`conspiracy. Not so. The plaintiffs’ briefing in response to the
`motion for summary judgment in the DAP cases – cases
`consolidated for a time with this one – preserved the issue. The
`District Court expressly allowed the plaintiffs to file a brief in
`which they made the same arguments that they make here: that
`the per se standard applies to the alleged conspiracy and that
`the court must look at the conspiracy as a whole. The plaintiffs
`also made abundantly clear in numerous filings in this case that
`they believed the defendants’ practices were part of one
`overarching conspiracy that was subject to the per se standard.
`There is no fair basis for finding forfeiture of that argument.
`See Tri-M Grp., LLC v. Sharp, 638 F.3d 406, 416 (3d Cir.
`2011) (explaining the criteria for a finding of forfeiture of an
`argument).
`
`
`
`15
`
`
`
`tells “the factfinder [to] weigh[] all of the circumstances of a
`case in deciding whether a restrictive practice should be
`prohibited as
`imposing an unreasonable
`restraint on
`competition.” Id. at 885. Circumstances to consider include
`information about the business, the restraint’s history and
`effect, and the business’s market power. Id. at 885-86.
`
`Although the rule of reason is the default mode of
`
`analysis, some practices so clearly violate § 1 that they are
`deemed unreasonable per se. “Restraints that are per se
`unlawful include horizontal agreements among competitors to
`fix prices[.]” Id. at 886. “To justify a per se prohibition a
`restraint must have manifestly anticompetitive effects and lack
`any redeeming virtue.” Id. (citations, internal quotation marks,
`and alteration omitted). Courts have “expressed reluctance to
`adopt per se rules with regard to restraints imposed in the
`context of business relationships where the economic impact
`of certain practices is not immediately obvious.” Id. at 887.
`Rather, “the per se rule is appropriate only after courts have
`had considerable experience with the type of restraint at issue,
`and only if courts can predict with confidence that it would be
`invalidated in all or almost all instances under the rule of
`reason[.]” Id. at 886-87 (citations and internal quotation marks
`omitted).
`
`
`Evaluating the Separate Components of the
`Conspiracy
`
`A.
`
`
`With that in mind, we consider first whether the District
`Court erred in looking at each of the individual components of
`the conspiracy separately. In arguing that there was error, the
`plaintiffs rely on Continental Ore Co. v. Union Carbide &
`Carbon Corp., in which the Supreme Court criticized the court
`
`
`
`16
`
`
`
`of appeals because it had “approached Continental’s claims as
`if they were five completely separate and unrelated lawsuits,”
`rather than all parts of the “basic plan to monopolize the …
`market[.]’” 370 U.S. 690, 698 (1962). But, as the District
`Court correctly concluded here, Continental Ore does not
`require analysis of the distinct components of a conspiracy as
`if they were an undifferentiated and indistinguishable bunch of
`behaviors.
`
`against
`admonition
`Court’s
`Supreme
`The
`“compartmentalizing … various factual components” was
`given in relation to a lower court’s assessment of the
`sufficiency of evidence at a trial, and the direction given was
`definitely not that the various stratagems of an alleged
`conspiracy must be evaluated under a single standard. Id. at
`699. Quite the contrary. As our late colleague Judge Edward
`R. Becker (then serving as a District Court Judge) cogently
`explained:
`
`In Continental Ore itself, the Supreme Court
`engaged in a detailed analysis of the record with
`respect to three of the four ventures which the
`Court of Appeals had addressed on their facts,
`concluding with respect to each of the three
`considered separately that there was enough
`evidence of causation to preclude a directed
`verdict.
`
`If
`the warning
`against
`“compartmentalizing” an antitrust conspiracy
`case were meant to prevent a court from breaking
`down a plaintiff’s allegation of a “unitary”
`conspiracy into its component parts for purposes
`of analysis, the Court would not have engaged in
`
`
`
`17
`
`
`
`the “forbidden” analysis in the very same
`opinion in which it issued the warning.
`
`
`Zenith Radio Corp. v. Matsushita Elec. Indus. Co., 513 F.
`Supp. 1100, 1167-68 (E.D. Pa. 1981) (Becker, J.) (citation
`omitted).
`
`The plaintiffs in the present case nevertheless contend
`that, because they alleged the defendants engaged in a single,
`overarching conspiracy, all of the defendants’ conduct must be
`evaluated under a single standard and, given their allegations,
`it must be the per se standard. The plaintiffs evidently believe
`that, because they are masters of their complaint, they are also
`masters of the District Court in deciding the analytical
`approach to be taken in the case. Their power to dictate
`analysis and outcome is not what they wish it were.
`
`When determining what standard to apply, courts are
`required to look at the “economic effect rather than [rely] upon
`formalistic line drawing.” Leegin, 551 U.S. at 887. The
`plaintiffs’ characterization of the defendants’ conduct –
`whether as a single overarching conspiracy or as three separate
`conspiracies – does not determine how a court is to assess
`differing actions that the defendants are accused of taking.
`When different stratagems are alleged to have furthered an
`antitrust conspiracy, the court is free to determine which
`analytical standard should apply to each. It is possible that
`different aspects of an alleged conspiracy can have very
`different economic consequences, and that, accordingly,
`different standards should apply when assessing whether each
`has an unlawful anticompetitive effect. Cf. id. at 893 (applying
`different analytical standards to different parts of an alleged
`conspiracy, where one part of the alleged conspiracy was
`
`
`
`18
`
`
`
`horizontal and one was vertical). Were it otherwise, the rule of
`reason, which is supposed to be the widely applicable standard,
`could be relegated to the margins. A plaintiff with a bucket
`full of allegations about behavior rightly subject to the rule of
`reason could easily, by adding a single allegation of behavior
`that is anticompetitive per se, demand per se analysis of the
`whole.
`
`The District Court did not err in rejecting that kind of
`approach. Courts can consider the differing components of an
`alleged conspiracy separately when determining which mode
`of antitrust analysis to apply.
`
`B.
`
`Turning to the UEP Certification Program – the one part
`of the alleged conspiracy that the plaintiffs have consistently
`argued should be subject to the per se mode of analysis9 – we
`
`The Certification Program
`
`
`9 The plaintiffs never asked the District Court to
`determine whether the rule of reason or the per se standard
`applied to the other two components of the alleged conspiracy,
`namely: (i) the short-term supply-reducing recommendations,
`including early slaughter, early molting, and reduced hatch;
`and (ii) egg exports. The plaintiffs’ argument has always been
`that the conspiracy was a single overarching conspiracy and
`that the per se standard applied to it as a whole. Once the
`District Court rejected that theory and determined that the rule
`of reason applied to the Certification Program, the plaintiffs
`never moved to have the Court consider whether the per se
`standard should apply to the other two alleged stratagems.
`Instead, the plaintiffs opted to try the case under the theory that
`
`
`
`19
`
`
`
`conclude that the District Court properly applied the rule of
`reason.
`
`The Certification Program was not an express
`agreement to reduce the supply of eggs, much less to fix prices.
`And, notwithstanding the plaintiffs’ protestations, it is not clear
`that the Program would “have manifestly anticompetitive
`effects and lack any redeeming virtue[,]” id. at 886 (citation
`omitted), as must be the case for the per se rule to apply.
`Although the Program required increased cage space and so
`would lead to fewer hens in existing structures, the Program
`did not limit the number of hens or structures a producer could
`have, so producers could increase the number of hen houses
`and add more hens. And Rose Acre provided evidence that
`hens with more cage space produce more eggs. Similarly, the
`impact on the supply of eggs of a prohibition on backfilling is
`less than clear, as there is evidence that the prohibition prevents
`disease and social competition and allows hens to live longer
`and produce more eggs.
`
`Moreover, as the District Court said, “while the
`plaintiffs argue that the supply reducing effects of the
`conspiracy are essentially undisputable, the record includes
`evidence that egg supply actually increased during the
`conspiracy period.” Processed Egg Prods. II, 206 F. Supp. 3d
`at 1047. Although the plaintiffs assert that the egg supply
`would have increased even more if not for the Certification
`Program, the economic impact of the actions at issue cannot be
`predicted with a high degree of certainty, which is a
`prerequisite for application of the per se standard. See United
`
`there was one overarching conspiracy subject to rule of reason
`analysis.
`
`
`
`20
`
`
`
`States v. Brown Univ. in Providence in State of R.I., 5 F.3d 658,
`670 (3d Cir. 1993) (citation omitted) (“Per se rules of illegality
`are judicial constructs, and are based in large part on economic
`predictions that certain types of activity will more often than
`not unreasonably restrain competition[.]”).
`
`Despite that, the plaintiffs argue for that standard,
`relying heavily on the rule that horizontal agreements among
`competitors to fix prices are illegal per se. Leegin, 551 U.S. at
`886. According to the plaintiffs, because they allege that the
`defendants engaged in a conspiracy to reduce the supply of
`eggs, the per se standard has to apply. But, as already
`indicated, the plaintiffs’ choice of labels does not dictate the
`mode for assessing allegations and evidence. Brown Univ., 5
`F.3d at 670 (“[T]he test for determining what constitutes per se
`unlawful price-fixing is one of substance, not semantics.”).
`The District Court thoroughly considered the plaintiffs’
`complaint and the record and determined that there was not a
`horizontal agreement to reduce supply and fix prices. The
`Court was confronted with practices having far less certain
`motives and far more complicated economic consequences,
`and that quite rightly led to application of the rule of reason.
`That choice was correct.
`
`C.
`
`The District Court also did not err in denying the
`plaintiffs’ Rule 59(e) motion. Federal Rule of Civil Procedure
`59(e) allows for “[a] motion to alter or amend the judgment.”
`“[A] proper Rule 59(e) motion . . . must rely on one of three
`grounds: (1) an intervening change in controlling law; (2) the
`availability of new evidence; or (3) the need to correct clear
`error of law or prevent manifest injustice.” Wiest v. Lynch, 710
`
`The Rule 59 (e) Motion
`
`
`
`21
`
`
`
`F.3d 121, 128 (3d Cir. 2013) (quotation marks omitted). The
`plaintiffs do not claim that their motion is supported by a
`change in the law. They do, however, argue that it is justified
`by new evidence and the need to correct a clear error of law
`and an injustice.
`
`They say first that the jury’s verdict constituted “new
`evidence” that effectively supersedes the District Court’s prior
`determination that the rule of reason is the proper mode for
`analyzing the conspiracy. As the plaintiffs see it, because the
`jury “found that there was, in fact, a single, overarching
`conspiracy to reduce supply,” the verdict cannot be squared
`with application of the rule of reason and instead demands per
`se liability. (J.A. 771.) Accordingly, the plaintiffs argue, the
`District Court should have entered judgment in their favor and
`should not have let the jury consider whether the restraint
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