The instant matter consists of two actions transferred to this Court by the Judicial Panel on Multidistrict Litigation for coordinated pretrial proceedings with five other actions filed in this district. Pending before the Court is defendants’ Motion to Dismiss Pursuant to Rule 12(b)(6) in the Baisley, Sweetwater and Scott cases. Defendants now rely on the motions to dismiss in all cases except Breto and the plaintiffs in all cases except Breto have agreed to be bound by the motion to dismiss briefing previously filed by the plaintiffs in Baisley, Sweetwater and Scott. The motions have been fully briefed and are now ripe for disposition. Pursuant to the Court’s local rules, the motion will be decided without oral argument.
I. Background
All plaintiffs are present or former dairy farmers in the Southeastern United States who raise cows and produce milk. Defendants are entities and/or individuals involved in either the marketing and sale of milk on behalf of dairy farmers or the purchase and processing of that milk.
For the purpose of its ruling on these Rule 12(b)(6) motions, the Court accepts as true the facts alleged in the complaint. Defendants have “conspir[ed] to operate an unlawful cartel that refuses to compete for the purchase of Grade A milk, forecloses access to fluid Grade A milk bottling plants and processors, and fixes prices for Grade A milk paid to Southeast dairy farmers.” Together with certain co-conspirators who are not sued in these actions, defendants have carried out their conspiracy through a series of “unlawful” acts, including implementing long-term full-supply agreements between defendant Dean Foods Company (“Dean”), National Dairy Holdings, L.P. (“NDH”) and Dairy Farmers of America, Inc., (“DFA”) in order to control access of Southeast dairy farmers to fluid Grade A milk bottling plants; requiring independent dairy farmers, individuals and entities that were previously free of DFA’s control to market their milk through DFA-controiled marketing entities such as Dairy Marketing Services, Inc. (“DMS”) in order to gain access to fluid Grade A milk bottling plants; requiring dairy farmer members of the Maryland and Virginia Producers Cooperative Association, Inc. (“Maryland and Virgina Co-op”), a cooperative that was previously independent of DFA, to market their Grade A milk through DFA-controlled Southern Marketing Agency, Inc. (“SMA”) to gain access to fluid Grade A milk bottling plants; threatening to cut off and cutting off independent cooperatives’ and independent dairy farmers’ access to fluid Grade A milk bottling plants; boycotting independent dairy farmers, cooperatives, and fluid Grade A milk bottlers; fixing, depressing and/or stabilizing prices for Grade A milk paid to Southeast dairy farmers; “flooding” the Southeast milk market to further depress prices for Grade A milk paid to Southeast dairy farmers; utilizing DMS and SMA to monitor prices for Grade A milk paid to independent dairy farmers and independent cooperative members; “punishing” independent cooperatives and fluid Grade A milk bottlers that do not comply with defendants’ conspiracy in an effort to eliminate or control these entities as competitive outlets for Southeast dairy farmers’ Grade A milk; and purchasing fluid Grade A milk bottling plants with the purpose and intent of further stifling competition from independent dairy farmers, cooperatives, and fluid
DFA is a cooperative that controls ninety percent of the Grade A milk produced in the Southeast. DFA owns and operates its own hauling companies, processing plants and distribution centers that are necessary to deliver Grade A milk from farmer producers to grocery stores. Defendant DMS is a marketing agency which performs milk marketing services for milk processors. With a few exceptions, independent dairy farmers are not permitted to sell Grade A milk directly to Dean and Dean forces farmers to market their Grade A milk through DMS. Defendant SMA is a marketing agency which markets milk on behalf of its member dairy cooperatives, including DFA. Dairy cooperatives that have previously acted independently of each other have been required to join SMA to market their Grade A milk. DFA is the controlling member of SMA.
Dean controls 60 percent of the fluid Grade A milk bottling capacity in the Southeast. The defendants collectively own at least 33 of the approximately 51 Grade A milk bottling plants currently operating in the Southeast, representing 77 percent of the fluid Grade A milk bottling capacity in the Southeast. DFA, through full supply agreements discussed below, controls access to these 33 plants and, because of full supply agreements with other milk bottlers and supermarkets, controls access to at least 41 of the 51 Grade A milk bottling plants in the Southeast. Through its full supply agreements and its control of SMA or DMS, DFA controls 90 percent of the Grade A milk produced in the Southeast and more than 80 percent of the Grade A milk processed by fluid Grade A milk bottlers in the Southeast. Dean, DFA and NDH also control most of the balancing plants in the Southeast, plants which hold Grade A milk produced during weekends and holidays when fluid Grade A milk bottling plants are generally closed.
Central to the alleged conspiracy of defendants are certain full supply agreements between certain bottlers, including Dean and NDH, and DFA in which DFA agreed to supply all of the fluid Grade A milk needed by those bottlers’ plants, despite the fact that DFA did not have the production of milk necessary to satisfy the agreements. These agreements were structured to avoid the prohibition of a Department of Justice consent decree
2
against full supply agreements in excess of one year. DFA’s full supply agreements consist of a series of 20 successive one
Defendants have used these full supply agreements to force independent dairy cooperatives needed to fulfill the agreements to join DFA, or to market their Grade A milk through SMA, and to force independent dairy farmers to market their Grade A milk through DMS in order to have access to fluid Grade A bottling plants in the Southeast. As part of the alleged conspiracy, Dean and DFA informed Maryland and Virginia Co-op that Dean would no longer accept Grade A milk from Co-op members unless the Maryland and Virginia Co-op agreed to join SMA. Maryland and Virginia Co-op joined SMA because it had no other choice. DFA, of course, controls SMA. Similar demands were made of other small dairy cooperatives operating in the Southeast. Access to bottling plants is essential to dairy cooperatives and diary farmers because it is their only means to qualify to participate in the United States Department of Agriculture’s (“USDA”) Federal Milk Market Orders (“FMMO”), receive FMMO minimum blend prices and to be eligible for over order premiums for Class 1 sales of Grade A milk. 3
Because of “threats” made to other small dairy farmer cooperatives operating in the Southeast, all joined SMA to gain access to fluid Grade A milk bottling plants in the Southeast. Because DFA controls access to the market, DFA members have no choice but to pay inappropriate fees and charges for the services performed by SMA. DFA has utilized its control of SMA to flood the Southeast market with Grade A milk from the Southwest, which has the effect of reducing the minimum price paid to dairy farmers under USDA regulations. Dean refuses to deal directly with independent dairy farmers and forces all independents to market their Grade A milk through DMS. A few independent farmers have gained access to Dean directly, though these independent dairy farmers have accepted prices jointly fixed by the Defendants. Dean, NDH and DFA have agreed that all Grade A milk supplied to Dean, NDH and DFA’s fluid Grade A milk bottling plants must be marketed by DFA or through either SMA or DMS, both of which were formed by, and are controlled by, DFA. DMS and SMA thus market nearly all the Grade A milk produced and processed in the Southeast, permitting them to monitor the prices paid to all dairy farmers by each of the processing defendants — Dean, NDH and DFA. The defendants use this information to fix and stabilize over-order premiums at levels lower than what would have prevailed in a competitive market, thus depressing over-order premium prices paid to Southeast dairy farmers and cooperative members. Southeast dairy farmers have also been subjected to anti-competitive and unlawful fees and dues charged by SMA for the sole benefit of the Defendants’ cartel.
Defendants have, therefore, obtained control over and foreclosed access to the bottling market and have used that control to fix prices, eliminate competition and make sure farmers have no alternative other than to deal with them. By requiring Grade A milk to flow through either SMA or DMS to gain access to bottling plants, the defendants have created a mechanism by which they exchange and monitor price information. The defendants further require that DFA receive, process and account for DFA controlled marketing agencies’ member cooperatives’ monies from Grade A milk sales. This allows DFA to monitor Grade A milk sales by other Southeast cooperatives and independent farmers. The defendants have also used common employees to enforce compliance with the terms of their conspiracy and have agreed to use trucking companies owned by Baird, an individual defendant, to haul Grade A milk produced by SMA’s member co-ops. Defendants are thus aware of the amounts, origins and destinations of nearly all Grade A milk shipped in the Southeast. All of this allows the defendants to monitor and enforce compliance with their conspiracy.
II. Analysis and Discussion
Defendants have moved, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, that the Court dismiss the claims against them and they advance four general grounds as bases for their motion. First of all, the defendants allege that plaintiffs have failed to state a claim for which relief can be granted under the recent Supreme Court decision in
Bell Atlantic Corporation v. Twombly,
— U.S. -,
Failure to State a Claim, Under Twom-bly
Federal Rules of Civil Procedure 8(a)(2) requires only “a short and plain statement of the claim showing that the pleader is entitled to relief,” in order to “give the defendant fair notice of what the ... claim is and the grounds upon which it rests.” Fed.R.Civ.P. 8(a)(2). The issue raised by the defendants here turns on whether or not the plaintiffs have pled sufficient facts to state a claim to relief that is plausible following the Supreme Court’s recent pronouncement in Bell Atlantic v. Twombly (hereinafter referred to as “Twombly”).
Section 1 of the Sherman Act prohibits “[e]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several states, or with foreign nations.” 15 U.S.C. § 1. In the Twombly decision, the Supreme Court specifically addressed the antecedent question of what a plaintiff must plead in order to state a claim under § 1 of the Sherman Act. In answer to that question the Supreme Court stated:
[A] plaintiffs’ obligation to provide the “grounds” of his “entitle[ment] for relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do, see Papasan v. Allain,478 U.S. 265 , 286,106 S.Ct. 2932 ,92 L.Ed.2d 209 (1986) (on a motion to dismiss, courts “are not bound to accept as true a legal conclusion couched as a factual allegation”). Factual allegations must be enough to raise a right to relief above the speculative level, ... In applying these general standards to a section 1 claim, we hold that stating such a claim requires a complaint with enough factual matter (taken as true) to suggest that an agreement was made. Asking for plausible grounds to infer an agreement does not impose a probability requirement at the pleading stage; it simply calls for enough fact[s] to raise a reasonable expectation that discovery will reveal evidence of illegal agreement ... [A]n allegation of parallel conduct and a bare assertion of conspiracy will not suffice.
Twombly,
“[T]erms like ‘conspiracy,’ or even ‘agreement,’ are borderline: they might
“ ‘[T]he crucial question’ is whether the challenged anticompetitive conduct stem[s] from independent decision or from an agreement ...”
Id.
at 1964(quoting
Theatre Enterprises, Inc. v. Paramount Film Distributing Corp.,
While acknowledging that the complaints do contain other substantive allegations that are not related to the full supply or outsourcing agreements, they describe these allegations as mere coincidental parallel conduct undertaken by each of these defendants on its own. They argue that “the mere fact that more than one bottler has chosen to engage in certain similar business conduct, such as entering into a full supply agreement with DFA, is
not sufficient
to render plausible the allegation that they have done so pursuant to an unlawful, horizontal agreement.” See
Baisley
Memo., pg. 12. They then address each fact alleged individually and suggest a valid business justification for the action taken. For instance, while appearing to concede that the defendants have closed down bottling plants and/or have refused to operate bottling plants with the effect of decreasing capacity by eliminating sources of access, they argue that no facts are
Plaintiffs, on the other hand, point to allegations contained in their complaints of “a series of unlawful activities” which include the implementation of . full supply agreements between defendants Dean, NDH and other bottlers, forcing independent dairy farmers, individuals and entities to market their milk through DFA controlled marketing entities, forcing dairy farmer members of the Maryland and Virginia Producers Co-op to market their milk through DFA controlled SMA in order to gain access to fluid Grade A milk bottling plants, using various DFA controlled entities to monitor prices, threatening to cut off and cutting off access to bottling plants, boycotting independent farmers, cooperatives and bottlers, fixing, depressing and/or stabilizing prices, “flooding” the Southeast milk market with milk from other regions, “punishing” independent cooperatives and bottlers in an effort to eliminate or control those entities as competitive outlets for milk and purchasing bottling plants with the purpose and intent to further suppress competition. Plaintiffs argue that all of these acts were committed with the intent to monopolize, monopsonize or restrain trade and had adverse effects on competition. They further argue that all these facts, taken together, support a plausible inference of horizontal conspiracy and accuse the defendants of “dismembering) the complaints and re-characterizing their allegations of an illegal conspiracy.”
This Court is constrained to agree with the plaintiffs. These complaints, while not answering all specific questions about “who, what, when and where,” do put defendants on notice concerning the basic nature of their complaints against the defendants and the grounds upon which their claims exist. While viewing each of these factual allegations in isolation may lead one to the conclusion drawn by the defendants, i.e., that there is a legitimate business justification for each of the acts, a view of the complaint as a whole, which this Court must take, and accepting all of the factual allegations as true, does support a plausible inference of a conspiracy or agreement made illegal under § 1 of the Sherman Act. As an initial matter, it is interesting to note that defendants acknowledge that the vertical full supply and outsourcing agreements referenced in plaintiffs’ complaints could be challenged under the antitrust laws as agreements that unreasonably restrain trade. Defendants assert, however, that this is not the focus of plaintiffs’ attack here. Plaintiffs, on the other hand, do not concede defendants’ point. They argue, and it appears rightfully, so to this Court, that rather than simply alleging facts from which an inference of an agreement can be drawn, they allege, and defendants concede, that actual agreements exist. Beyond that, plaintiffs allege that defendants agreed to commit, and actually did commit numerous other acts, many through the use of these full supply agreements, which are illegal under the Sherman Act. While defendants’ assert the conclusion that these full supply agreements are “legitimate”, that issue appears to remain open and this Court cannot conclude, accepting all allegations of the complaints as true, that these agreements do not foreclose competition and violate § 1 of the Sherman Act.
Moreover, defendants attempt to parse and dismember the complaints, contrary to the Supreme Court’s admonition that “[t]he character and effect of a [Sherman Act] conspiracy are not to be judged by
Antitrust Standing
Next, defendants argue that plaintiffs are not the proper parties to bring this private antitrust action and therefore lack “antitrust standing”. Section 4 of the Clayton Act affords a private right of action to “any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws.” 15 U.S.C. § 15. The Sixth Circuit has established a two part test to determine whether a plaintiff has adequately alleged antitrust standing: (1) has the plaintiff asserted a cognizable “antitrust injury,” and (2) is the plaintiff a proper plaintiff to assert a violation of the antitrust laws.
Indeck Energy Sews. v. Consumers Energy Co.,
It is the first requirement, antitrust injury, upon which the defendants focus here. Antitrust standing is a threshold, pleading stage inquiry and a complaint must be dismissed if it fails to establish this requirement.
NicSand, Inc. v. 3M Company,
The Sixth Circuit has also applied the
Twombly
standard to the requirement for pleading antitrust injury and has held that a naked assertion of antitrust injury, without factual allegations plausibly suggesting (not merely consistent with) the same, are insufficient to meet the threshold requirement of Rule 8(a)(2).
Id.
at 451. This is not to say, however, as the Sixth Circuit has observed, that one competitor may never sue another under the antitrust laws. However, “courts typically
The defendants argue that their actions depress, rather than raise, the prices paid to plaintiffs and cannot be said to cause antitrust injury. Citing the general rule that the purpose of the antitrust laws is to protect consumers and competition — not competitors, defendants argue that plaintiffs allege no ultimate harm to consumers. Citing
Indeck,
defendants argue that “[although antitrust actions may, of course, be initiated by marketplace competitors, those actors in the economic forum must at least allege that the exclusion of the competitor from the marketplace results in the elimination of a superior product or a lower cost alternative.”
Indeck,
Plaintiffs, on the other hand, argue that they are sellers who are victimized by the actions of a monopsonist or buyers’ conspiracy who always have standing to sue. Plaintiffs further argue that the defendants mischaracterize their relative positions in the market as that of competitors, rather than as a buyer seller relationship. Plaintiffs characterize themselves as “underpaid sellers” and argue that they suffer antitrust injury because they are the victims of an agreement by the defendants to illegally pay them less than the prices that would otherwise prevail in a competitive market.
While the claim made by the defendants, i.e., that consumers ultimately benefit from lower prices paid to sellers has some logical appeal, this Court is not convinced, at this stage of these proceedings, that the plaintiffs have not adequately alleged antitrust injury and recognizes that “[ijnjury to competition can occur by mon-opsony just as it may result from monopoly.”
In re NCAA I-A Walk-On Football Players Litigation,
Although the Court finds that plaintiffs have sufficiently pleaded antitrust injury, the specific allegations that members of the Maryland and Virginia Co-op and of DFA have no standing is more troublesome. Defendants argue that members of the Maryland and Virginia Co-op have suffered injuries “too indirect” for them to have standing to sue and they liken the situation to that of stockholders who cannot sue on behalf of their corporation. They further argue that DFA members would, by recovering damages, benefit from the alleged wrongdoing of their own cooperative. It appears, however, that these claims cannot properly be resolved on the pleadings and this Court will permit
Relevant Market
“To establish a claim under § 1, the plaintiff must establish that [a] ... combination or conspiracy produced adverse, anti-competitive effects within relevant product and geographic markets ....”
Davis-Watkins Co. v. Service Merchandise,
While acknowledging that plaintiffs define their proposed relevant geographic market as USDA Federal Milk Marketing Orders 5 and 7 (referred to by as plaintiffs as “the Southeast”), defendants argue that this legal conclusion as to the relevant geographic market fails as a matter of law because of factual allegations contained in plaintiffs’ complaints that defendants purchase milk from daily farmers outside the Southeast to supply processing plants in the Southeast, i.e., the “flooding” allegation, thus making the geographic market broader than the Southeast. Secondly, they argue that while the plaintiffs generally describe the relevant product market as either “fluid Grade A milk,” or “the market for the purchase of fluid Grade A milk”, they offer no factual allegations to show that any defendant possesses monop-sony or monopoly power in such a market. For these reasons, defendants argue that plaintiffs’ complaints and claims should be dismissed.
Plaintiffs, on the other hand, respond that they define two relevant product markets: (1) the market for the purchase of fluid Grade A milk for bottling in the Southeast and (2) the market for the sale and marketing of fluid Grade A milk for bottling in the Southeast. They also allege, as defendants concede, that the relevant geographic market is the Southeast, i.e., the area covered by FMMO’s 5 and 7. Because definition of the relevant market is a highly fact based inquiry and because plaintiffs clearly allege relevant product and geographic markets, this Court will spend very little time on this issue. The fact that defendants suggest, at this stage of the litigation, that other relevant markets may likewise exist is of no consequence. Likewise, plaintiffs allege DFA and Dean control over significant portions of both the buy-side and the sale-side of the relevant product markets, allegations which are sufficient to establish a prima facie case of monopoly power. These issues simply are not appropriate for disposition on a motion to dismiss given the factual allegations contained in plaintiffs’ complaints.
Statute of Limitations
The statute of limitations for private federal antitrust actions is four years from the date of the accrual of the action. See 15 U.S.C. § 15b. An antitrust cause of action accrues and the limitation
“When a continuing antitrust violation is alleged, the cause of action accrues each time a plaintiff is injured by an act of the defendants.”
Barnosky Oils, Inc. v. Union Oil Co. of California,
Plaintiffs in this case have alleged a continuing conspiracy. Defendants argue that plaintiffs’ alleged injuries were caused by conduct prior to July 5, 2003 and are therefore time barred, that plaintiffs have not identified any overt acts within the limitations period that restart the running of the statute, and that plaintiffs’ fraudulent concealment allegations are inadequate to avoid dismissal of their claims as untimely. Because the Court finds that the plaintiffs have adequately pled a continuing antitrust violation and have alleged overt acts which, if proven, would restart the statute of limitations, the motion of the defendant, at this stage of the proceedings, lacks merit. Plaintiffs in this case allege an agreement to eliminate competition. A conspiracy is presumed continuing where there is an agreement to eliminate competition with no “affirmative showing of the termination of that agreement.”
Midwestern Machinery Co. v. Northwest Airlines, Inc.,
Plaintiffs in this case have alleged that the continuing conspiracy was implemented by the annual renewal of full supply agreements and have alleged numerous other overt acts occurring within the limitations. These facts are clearly articulated in plaintiffs’ complaint and the Court will not set them out individually in this memorandum opinion. These allegations are generally set out, however, in paragraphs 49-58 and 61-76 of the Sweetwater complaint and 50-61 and 63-78 of the Baisley Complaint. Accepting these allegations as true, as the Court is required to do for the purposes of these motions, the plaintiffs clearly plead a continuing conspiracy with overt acts committed well within the limitations period applicable to this case. Because the Court finds that plaintiffs have adequately pled a continuing conspiracy, the Court will not address the defendants’ argument that the fraudulent concealment allegations of the complaint are deficient.
Claims Against Individual Defendants
Two of the individual defendants who have joined in the motion to dismiss, Gary Hanman (“Hanman”) and Gerald Bos(“Bos”), have filed a supplemental
The individual defendants argue that the complaints do not comply with Rule 8(a)(2) and Twombly as to them. 7 They argue that plaintiffs fail to allege that they conspired with others to restrain trade and that the conduct described in the complaints fails to state a claim for individual antitrust liability under Sixth Circuit precedent Characterizing plaintiffs’ allegations as “literary gloss” and “clever word-play”, defendants argue that the complaints “focus on corporate activity in which [they] participated, if at all, only in a representative capacity on behalf of DFA” or, in Baird’s case, SMA. While seeming to acknowledge that the alleged corporate activity is adequately detailed, they demand that the complaints detail their participation in these underlying events.
These parties spend many pages of their briefs debating the proper standard for pleading a claim of individual liability for antitrust violations, the precedential value of a California district court case.,
Murphy Tugboat v. Shipowners & Merchants Towboat Co.,
In
Brown,
antitrust plaintiffs sued both organizational defendants and their attorneys, alleging that the attorney defendants engaged in a conspiracy in violation of 15 U.S.C. 1
et. seq
and 14. Plaintiffs alleged that defendants engaged in a conspiracy to file and threaten lawsuits so as to coerce, intimidate and compel plaintiffs to purchase from the corporate defendant. The complaint did not allege that the attorney defendants served as active participants in formulating policy for the corporate defendants or acted beyond their role as legal counsel. The Sixth Circuit unequivocally held that corporate “officers and agents may be held individually liable for corporate actions that violate the antitrust laws if they authorize or participate in the unlawful acts.”
Brown,
Plaintiffs allege that Hanman, Bos and Baird actively “participated in, authorized, directed and/or knowingly approved or ratified” the illegal conduct complained of. Plaintiffs plead, in straightforward fashion, what Brown requires. That they require only a few paragraphs or sentences to do so is of no consequence. Whether plaintiffs can ultimately survive a motion for summary judgment after discovery is also of no consequence to the decision of the instant motion. The additional arguments raised by these individual defendants establish no basis for dismissal of plaintiffs’ complaint against them pursuant to Rule 12(b)(6).
III. Conclusion
For all the foregoing reasons, defendants’ motions to dismiss [Doc. 47 in 2:07-CV-208; Docs. 30 & 36 in 2:07-CV-248; Doc. 95 in 2:08-CV-12; and Doc. 92 in 2:08-CV~14] are DENIED, Defendant Baird’s and SMA’s supplemental motion[Doc. 98 in No. 2:07-CV-208] is DENIED IN PART and discovery should proceed as provided for in the Court’s case management and scheduling order. This order is also binding on the parties in Case Nos. 2:07-CV-272 and 2:08-CV-53.
Notes
. In 2001, Dean and Suiza, the first and second largest fluid Grade A milk bottlers in the United States, merged into the company now operated under the name Dean Foods Company.
. At the time of the 2001 Dean and Suiza merger, Dean, Suiza and other defendants in this case entered into a consent decree to address DOJ's antitrust concerns by, among other things, divesting 11 of Dean’s and Sui-za’s fluid Grade A milk bottling plants to NDH and the purchase by Dean of DFA’s 33.8 percent stake in Suiza. DFA and its subsidiaries then provided more than $40 million in financing to NDH to enable it to acquire the 11 fluid Grade A milk bottling plants divested by Dean and Suiza, as well as other bottling plants. As noted above, DFA has owned at least 50 percent of NDH’s equity in voting shares at all times relevant to this complaint.
. USDA classifies Grade A milk into four classes. Class 1 milk is used in beverage milk products for human consumption. USDA calculates minimum prices for each of the four classes of Grade A milk marketed in each of the geographic regions through FMMOs. FMMOs 5 and 7 are at issue in this case and apply in the Southeast. USDA regulations mandate that Grade A milk bottlers pay at least the minimum price set by Orders 5 and 7. Cooperatives and producers are free to negotiate for prices in excess of FMMO minimum prices. The amount by which prices for Grade A milk exceed FMMO minimum blend prices are know generically as “over-order premiums.”
. New cases have caused as much discussion and confusion as the Supreme Court’s decision in
Twombly.
The decision is not specifically limited to antitrust cases but abrogated
Conley v. Gibson,
. Defendants, while acknowledging that plaintiffs make factual allegations that they have denied access to Grade A milk bottling plants, made threats to cut off access, and boycotted independents, argue that these are all things which were accomplished by the terms of these vertical agreements.
. SMA raises two grounds for dismissal in addition to its argument based on Twombly. SMA claims immunity under the Capper-Vol-stead Act and protection by the filed rate doctrine. All issues raised in SMA and Bairds' supplemental motion not addressed in this opinion and order will be addressed in a separate order.
. Defendants cannot be faulted for attacking plaintiffs' complaints on the basis of Twom-bly. The level of factual pleading they seek, however, could rarely, if ever, be met by a plaintiff in an antitrust case before discovery. While Twombly certainly requires of plaintiffs a degree of pleading that may not be required in other types of cases, it was not intended as a shield to be used by antitrust defendants to defeat even a meritorious claim. Arguing that plaintiffs have not pleaded sufficient facts appears to have become the mantra of defendants in antitrust cases.
. Defendants Bos and Hanman disingenuously create the impression in their briefs, by combining quotes from two different cases and by carefully wording their argument, that the Sixth Circuit, in the
Brown
decision, adopted the holding of
Murphy Tugboat
and requires a showing that corporate officers sought to be held individually liable for antitrust violations "actually participated in 'inherently wrongful conduct.’ ” Such an impression is false. Rather than adopting the holding of
Murphy Tugboat,
the Sixth Circuit merely observed that
“one court
has concluded that personal liability under the antitrust laws should only attach where the defendant has actively participated in inherently wrongful conduct.”
Brown,