Proposed class-action lawsuit filed against Nellie's eggs over 'free range' label

When Michelle Lugones and her husband, Marcus Siezing, shopped for eggs at their local Whole Foods in TriBeCa, New York, they say they sought a product consistent with their values about the humane treatment of animals and were drawn to the images of happy hens luxuriating in green fields seen on cartons of Nellie's Free Range Eggs.

Encouraged by the packaging, Lugones and Siezing say they thought they bought eggs sourced from small farms providing all hens with space to move around both indoors and outdoors.

Now, in a proposed class-action lawsuit filed in U.S. District Court in New York, the couple, along with fellow plaintiffs Tricia Rizzi and Claudia Vassallo, say "nothing could be further from the truth."

Their lawsuit, backed by People for the Ethical Treatment of Animals, accused Nellie's and parent company Pete and Gerry's Organics LLC of violating consumer trust and cruel treatment of laying hens.

"The harsh reality is that Nellie's crams and stuffs hens—sensitive, intelligent animals, who feel pain acutely and who in natural environments will form complex social bonds—into sheds up to 20,000 at a time," the lawsuit claims. "This overcrowding prevents them from extending their wings, foraging, or making their way to the outdoor space Nellie's advertises so prominently."

Nellie's pushed back, insisting the company goes "far beyond" best practices where it concerns animal welfare.

"The Nellie's brand was named after a pet hen I had when I was four years old," CEO Jesse Laflamme told ABC News by phone from New Hampshire, where he is based. "There's 300 million egg laying hens in terrible conditions nationally, and we're one of the few companies that does not keep a single hen in a cage."

The lawsuit seeks damages and a court order to stop the practices alleged in the lawsuit, including providing hens "cramped, stressful environments, lacking meaningful access to the outdoors or to sunlight."

Laflamme denies it.

"Our hens are raised on family farms. The hens get outside when the weather is nice. They have plenty of space to roam. We work with certified humane farm animal care to make sure we're doing what we say we're doing," he said.

Laflamme also accused PETA of backing the lawsuit as a publicity stunt.

"What's particularly insulting from a common sense standpoint is that PETA has chosen to attack a family business that is doing things right," Laflamme said. "They're apparently deciding to ignore the larger egg industry. What's happening on those factory farms is so egregious. For them to ignore the caged egg industry and come after us is mind-blowing to me."

The plaintiffs are seeking class-action status for their lawsuit.

"Consumers pay a premium for eggs they believe come from laying hens subjected to humane treatment with labels such as 'free-range' and 'cage-free,'" plaintiff's attorney Jeanne Christensen of Wigdor LLP said. "This proposed class action lawsuit is against the largest producers of advertised 'free-range' eggs in the country -- Pete and Gerry's Organics and Nellie's Free Range Eggs -- that advertise that their laying hens are treated humanely. As the allegations show, consumers are buying eggs from an egg producer that subjects its laying hens to horrific conditions."