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7th Circuit rejects egg farm's arguments

November 1, 2011

The insurers of a large-scale egg producer in southern Indiana accused of fixing the price of eggs don’t have to defend the farm on the antitrust complaint because the farm had not raised a defense that would be covered under the policies.

Rose Acre Farms wants Columbia Casualty Co. and National Fire Insurance Co. of Hartford to defend it in the antitrust and other suits pending against it and other egg farms in federal court in the Eastern District of Pennsylvania. Rose Acre claims the complaints seek damages for what would fall under “personal and advertising injury” in the farm’s insurance policies. The District Court in the Southern District of Indiana granted summary judgment in favor of the insurers, who refused to defend the company on the grounds that the complaints alleged nothing that could be regarded as “personal and advertising injury.”

The insurance policies are identical and define “personal and advertising injury” as “injury … arising out of one or more of the following offenses,” which includes “the use of another’s advertising idea in your ‘advertisement.’” The 7th Circuit found Rose Acre’s attempt to connect its advertising to the antitrust suit to be convoluted, and found the farm’s suit would fail even if one could tease out of the antitrust complaint a charge that Rose Acre’s advertising was in furtherance of the alleged antitrust conspiracy, wrote Judge Richard Posner in Rose Acre Farms Inc. v. Columbia Casualty Co. and National Fire Insurance Co. of Hartford, No. 11-1599.

The antitrust suit for which Rose Acre wants a defense doesn’t make any claim that could possibly be covered by its insurance policies, the court held. Posner also noted that the 11th Circuit, a week before the oral arguments in this case, rejected an identical claim by a firm represented by Rose Acre’s counsel in this case.
 

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