Note 10
- Commitments
and Contingencies
In re Shell
Eggs Litigation
Since
November
2025,
the
Company
has
been
named
as
a
defendant
in
several
lawsuits
filed
in
federal
courts
alleging
substantially
identical
claims,
including: (1)
the
following lawsuits
in the
Southern
District of Indiana:
(a) King Kullen
Grocery
Co., Inc.
v.
Cal
-Maine
Foods,
Inc.,
et
al., Case
No. 1:25
-cv-2274,
(b) Nineteenseventynine
LLC d/b/a
The Breakfast
Joynt
v.
Cal
-Maine
Foods,
Inc.,
et
al., Case
No. 1:25
-cv-2301,
(c) Taylor
Egg Products,
Inc.
v.
Cal
-Maine
Foods,
Inc., et al., Case
No.
1:25-cv-2554,
(d) Hudson
v.
Cal
-Maine
Foods,
Inc.
et
al., Case
No. 1:25
-cv-02573,
(e) Brandon
Huyler v.
Cal
-Maine Foods,
Inc.,
et
al., Case
No. 1:26
-cv-00135,
and
(f) Gloria Emery, Carol
Goldberg, and
Casey
Whalen v.
Cal
-Maine Foods,
Inc., et al.,
Case
No.
1:26
-cv-00193;
(2)
the
following lawsuits
in
the
Northern
District of
Illinois: (a)
Birchmans
Parisian,
LLC
(d/b/a
Lisciandro's
Restaurant)
v.
Cal
-Maine
Foods,
Inc., et al., Case
No. 1:25-cv-14030,
(b) Phil-N-Cindy's Lunch, Inc. v.
Cal
-Maine
Foods,
Inc.,
et
al.,
Case
No. 1:25
-cv-14082,
(c) Yell-O-Glow Corporation
v.
Cal
-Maine
Foods,
Inc.,
et
al., Case
No. 1:25
-cv-
15084,
and
(d) Tariq
Habash,
Delia Govea,
Andrew Phillips, and
Catalina
Torres v.
Urner Barry Publications,
Inc., Cal
-Maine
Foods,
Inc.,
et
al., Case
No. 1:25
-cv-14112;
(3) the
following lawsuits
in the
Western
District of Wisconsin: (a) Matthew
Edlin
v.
Cal
-Maine
Foods, Inc.,
et al., Case
No. 3:25-cv-946,
(b) India
Price, Lakia Session, and
Karen Solomon
v. Cal
-Maine Foods,
Inc., et al.,
Case No. 3:25
-cv-1016; (c) Cheesecake
Funk LLC d/b/a
Cheesecake
Funk v. Cal
-Maine Foods,
Inc., et al., Case
No.
3:26-cv-00400,
(d) Philly Phlava
Original Steaks
and
Hoagies,
Inc.
v.
Cal
-Maine
Foods,
Inc.,
et
al., Case
No. 3:26-cv-00417;
(e) LPJJ
LLC
v.
Cal
-Maine
Foods,
Inc.
et
al., Case
No. 3:26
-cv-00425;
(f) C&L,
LLC, et
al. v.
Cal
-Maine
Foods,
Inc.
et
al.,
Case
No.
3:26
-cv-00454;
(g)
Angelica
Allison, et
al.
v.
Cal
-Maine
Foods,
Inc.,
et
al.,
Case
No.
3:26
-cv-00702;
and
(h)
Gutierrez Family
LLC, et
al. v.
Cal
-Maine
Foods,
Inc.
,
et
al., Case
No. 3:26-md-03175;
(4) a lawsuit in the Western
District of
Missouri: Ryan
v.
Cal
-Maine
Foods,
Inc.,
et
al., Case
No. 4:25
-cv-00999;
and
(5) the following lawsuits in the Central
District
of
California:
(a) DenWest
Restaurants,
Inc.,
et
al. v.
Cal
-Maine
Foods,
Inc.,
et
al., Case
No. 8:26
-cv-00949,
and
(b) DMSD
Restaurants,
Inc.,
et
al.
v.
Cal
-Maine
Foods,
Inc.,
et
al.,
Case
No.
2:26
-cv-04204.
The
lawsuits
generally
allege
that
the
Company,
along
with other
egg producers
and
industry
associations,
conspired to
artificially inflate
the prices of
conventional
shell eggs nationwide,
primarily
through
manipulation
of
industry
price benchmarks
(such
as
the
Urner Barry
Egg Index
and
Eggs Clearinghouse, Inc.
spot market),
coordinated
reporting and
supply restrictions, particularly
during the calendar
year
2022
highly pathogenic
avian
influenza
(\u201cHPAI\u201d)
outbreak.
In each
case, the
plaintiff
seeks certification
of a
putative
class of
either
direct or
indirect purchasers,
monetary
damages,
injunctive
relief, attorneys\u2019
fees, and,
in some cases,
restitution under
Section
1 of the
Sherman
Act, 15 U.S.C. \u00a7 1 (the \u201cSherman
Act\u201d) and
various
state
antitrust
and
consumer
protection
statutes.
The
above
actions
have
been
transferred
to
the
Western
District of
Wisconsin
for
multidistrict proceedings.
An initial judicial
management
conference
took
place
on
May
8, 2026,
where the
court
entered
an
initial case management
order, setting forth
deadlines
for
the
consolidated
complaints
and
initial briefing to
be
filed.
No discovery
has
taken
place in any
of the
actions.
The Company
disputes plaintiffs\u2019
allegations
in each
of these
actions
and
intends to
vigorously defend
itself in these action
s.
Civil Investigative
Demand
In
March
2025,
the
Company
received
a
Civil Investigative
Demand
(\u201cCID\u201d) from
the U.S. Department
of Justice (\u201cDOJ\u201d) in
connection
with
an
antitrust
investigation
to
determine
whether
there
was
a
violation
of
the
antitrust
laws
through
alleged
anticompetitive
conduct
by
and
among
egg producers.
In
August 2025,
the
Company
received a
subpoena
from
the State
of
New York
requesting
information
and
documents
related
to
its investigation of
anticompetitive
conduct
and
high egg
prices in
the
egg industry,
and
in March
2026,
the
Company
received
a
similar subpoena
from
the
State
of
Washington
related
to
its
investigation
of
anticompetitive
conduct
and
high egg prices in the egg industry. Additionally,
various
states\u2019
attorneys
general
sought to
join the
DOJ\u2019s investigation
or requested
access
to the
confidential
disclosures by the
Company
to the
DOJ.
On or about
June 25, 2026, the
Company
entered into an agreement
with the DOJ
and 17 states\u2019
attorneys
general to resolve
the
investigation,
subject to applicable
court approvals
and
procedures.
On June 29, 2026,
the United
States
and
certain
states
filed
a civil antitrust
complaint
against
the Company
alleging that the Company
and
certain
other defendants
coordinated
bidding to
manipulate
whole
benchmark
prices
and
simultaneously
filed
the
proposed
settlement
and
proposed
final
judgments.
The
settlement
with
the
United
States
is proceeding
through
the
Antitrust
Procedures
and
Penalties
Act, commonly
known
as
the
Tunney
Act, process
that includes
publication
of the proposed
judgment,
competitive
impact
statement,
public comment
period,
and
eventual
court
review before entry
of the
final judgment.
The Company
denied all wrongdoing or violations
of law and
no
fines
or penalties
were assessed
against
the
Company.
In
connection
with the
agreement,
the
Company
agreed to
implement
certain
antitrust
compliance
and
reporting measures,
to
donate
30
million eggs to
food
banks
and
non-profits,
and
paid
$
1.5
million to
the settling
states
to resolve the
matter.