Attorney General Ellison reaches settlement in price-gouging lawsuit against Sparboe Farms
Minnesota company agrees to donate more than 1M eggs to Minnesota nonprofits to feed hungry Minnesotans
October 25, 2021 (SAINT PAUL) — Minnesota Attorney General Keith Ellison today announced the resolution of a lawsuit against Sparboe Farms, a Minnesota-based egg producer, related to its excessive pricing of eggs in March and April 2020.
Under the terms of a Consent Judgment filed with the Hennepin County District Court, Sparboe will donate 90,000 dozen eggs — more than 1,000,000 eggs in total — to Minnesota nonprofit organizations for the purpose of combatting hunger and food insecurity throughout Minnesota. Sparboe must complete its egg donation within 18 months. Sparboe must ensure that the eggs are of the same quality as the eggs it sells at retail to Minnesota consumers. It must also assume all costs related to the donation and not pass them on to the nonprofits. The Attorney General’s Office may request information regarding the progress of the donations from Sparboe, and the company must provide a certification of the donations once they are complete.
“During the COVID-19 crisis, I used the authority granted to me by executive order to ensure that Minnesotans were protected from pandemic profiteering on food and other essential items. We are committed to holding accountable those that sought to take advantage of consumer demand for essential goods during the pandemic. This resolution both holds Sparboe accountable and serves the public interest by ensuring that one million eggs are provided to Minnesotans who need them most,” Attorney General Ellison said.
Under Executive Order 20-10, price gouging on essential items, like food, was illegal for the duration of the COVID-19 peacetime emergency from March 21, 2020 until the termination of the emergency by the Legislature on July 1, 2021. In its September 3, 2021 lawsuit against Sparboe, the Attorney General’s Office alleged that Sparboe tripled its egg prices in March 2020 as consumer demand for eggs skyrocketed in the early days of the COVID-19 pandemic. The suit alleged that Sparboe increased its prices despite Executive Order 20-10, and that Sparboe was unable to point to increased costs that would have justified the massive price increases.
Price-gouging during the pandemic
As part of the authority of the Attorney General’s Office to enforce Executive Order 20-10, the Office received and investigated 2,600 complaints of price-gouging during the peacetime emergency. In addition to resolving the lawsuit against Sparboe, the office entered into six Assurances of Discontinuance with businesses that the Office alleged violated the Executive Order.
Today’s settlement with Sparboe marks the second resolution of actions taken against Minnesota egg producers by Attorney General Ellison’s office related to egg pricing during the COVID-19 pandemic. On April 27, 2020, the Attorney General entered into an Assurance of Discontinuance with Forsman Farms, another Minnesota egg producer, related to its imposition of similar egg price increases in March and April 2020. Forsman Farms resolved the Attorney General’s investigation by agreeing to re-invoice its past orders that violated Executive Order 20-10 at legal prices and to cap its pricing within the limits of the order moving forward.
Minnesota one of only 11 states without law banning price-gouging
According to the National Council of State Legislatures, Minnesota is one of only 11 states to lack any law banning price-gouging. Attorney General Ellison has been a staunch advocate of HF844, a bill to ban price-gouging authored by Rep. Zack Stephenson, which passed the House of Representatives in March 2021 but received no action in the Senate.
“Affording your life is hard enough: when companies engage in unconscionable price-gouging, it’s even harder,” Attorney General Ellison said. “The only recent protection Minnesotans have had against price-gouging was Governor Walz’s executive order banning it during the COVID-19 peacetime emergency — but it’s a problem Minnesotans in any part of the state can face at any time and they have no protection from it under current law. It’s unacceptable that Minnesota is one of only 11 states with no protection for consumers against price-gouging. I thank the House for passing a strong bill to ban it and I call on the Senate to take action as soon as possible,” Attorney General Ellison added.