In re Fresh & Process Potatoes Antitrust Litigation
2011 U.S. Dist. LEXIS 138777
D. Idaho2011Background
- Plaintiffs include direct and indirect potato purchasers alleging Defendants conspired to restrain potato supply and raise prices.
- Alleged scheme centers on Idaho growers forming UPGI and UPGA as umbrella cooperatives to manage supply and fix prices.
- Defendants allegedly used production controls: acreage reductions, bid-buy-downs, shipping holidays, flow-control, and offloading surplus to dehydration plants.
- Capper-Volstead Act immunizes certain agricultural cooperatives; plaintiffs contend it may not apply to all participants or to pre-production restrictions.
- Court analyzes Capper-Volstead applicability, Twombly/Iqbal plausibility standards, and various defense theories (Capper-Volstead, CMA, FSIA, agency theories).
- Court issues numerous rulings granting/denying motions to dismiss with leave to amend and schedules amended pleadings due by January 13, 2012.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Capper-Volstead applicability to alleged pre-production cartel | Capper-Volstead exemption may cover cooperatives including members; non-members/foreign conspiracies may negate | Cooperatives with non-members or pre-production restraints fall outside exemption | Capper-Volstead issue requires fact-intensive inquiry; denial of dismissal warranted pending discovery |
| Whether acreage reductions and production constraints are Capper-Volstead-protected | Capper-Volstead protects collective marketing; production limits should be covered | Capper-Volstead does not permit pre-production production limitations | Acreage reductions and production controls are not Antitrust immunity under Capper-Volstead; dispute requires fact-finding |
| Adequacy of pleading who-what-where-when against individual growers | Plaintiffs allege meetings, attendance, and agreements with specific growers | Membership in association alone insufficient; need precise participation | Plaintiffs’ evidentiary allegations connect some growers to the conspiracy; some motions granted with leave to amend; others dismissed or require amendment |
| Dole/licensor and marketing defendant agency liability | Licensor relationships can create agency liability for conspiracy; Wada-Dole interactions support control | Conclusive agency relationship not pleaded; Dole not shown to direct Wada growers | Direct participation insufficient; agency theory insufficiently pleaded; dismissal with prejudice of Dole claims; leave to amend possible for direct participation theory |
| Indirect purchasers’ standing and preemption | IP plaintiffs seek antitrust relief; stand to amend to fit state standing rules | Standing required; preemption/adequacy unresolved | IP standing dismissed with leave to amend to plead causation/remoteness/injury; repleading allowed |
Key Cases Cited
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (plausibility standard for pleading required; not just labels)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (plausibility as a context-specific task; legal conclusions not accepted as true)
- Monsanto Co. v. Spray-Rite Corp., 465 U.S. 752 (U.S. 1984) (conscious commitment to a common scheme required for liability)
- Les Shockley Racing, Inc. v. Nat’l Hot Rod Ass’n, 884 F.2d 504 (9th Cir. 1989) (elements for Sherman Act §1 claim; conspiracy requires agreement and injury)
- Kendall v. Visa U.S.A., Inc., 518 F.3d 1042 (9th Cir. 2008) (membership in a trade association alone not sufficient for liability; must connect to conspiracy)
- In re Packaged Ice Antitrust Litig., 723 F.Supp.2d 987 (E.D. Mich. 2010) (pleading parallel conduct requires context to plausibly show an agreement)