Food & Agriculture Quarterly January 2019 | Page 14

Mushrooms
Mushroom growers and one of their cooperatives
have defended a supply management program
since 2006 when they were first sued for alleged
antitrust violations in Pennsylvania federal court, In
re Mushroom Direct Purchaser Antitrust Litig., No.
2:06-cv-00620 (E.D. Pa.). Plaintiffs claimed that,
starting in 2001, the cooperative and its members
agreed to increase prices and reduce supply by,
among other things, purchasing mushroom farms
and reselling the land with restrictive deed covenants
preventing its use as mushroom farms. The
mushrooms plaintiffs argue that such conduct is not
protected by Capper-Volstead because the Act does
not protect pre-production supply management
activities, monopolization of trade, or suppression of
competition with non-members.
Additionally, plaintiffs alleged, and the court agreed,
that the cooperative and its members are not
Capper-Volstead protected because at least one
member of the cooperative was not a true “farmer”
under the definition of the Act. The alleged non-
farmer defendant was the sister corporation of an
actual farmer and had the same ownership as the
non-farmer entity. However, the court found that
because, among other reasons, the owner signed
the cooperative membership form in the name of the
non-farmer entity (which defendants argued was by
mistake), neither the cooperative nor its members
were protected by the Capper-Volstead Act.
Defendants’ filed a motion asking that plaintiffs’
antitrust claims be judged under the rule of reason,
and at the same time, the plaintiffs filed a cross-
motion for partial summary judgment, asserting
that the defendants have engaged in a per se illegal
horizontal conspiracy to fix prices and restrict supply.
In May 2015, the Judge ruled that the price-fixing
claims would be subject to “rule of reason” analysis
while the “supply restriction” claims were per se
illegal. Trial has tentatively been set for May 2019.
Cooperatives Working Together program
In September and October of 2011, complaints were
filed in the Northern District of California against
Agri-mark, Inc., Dairy Farmers of America, Inc. (DFA),
Dairylea Cooperative Inc., Land O’ Lakes, Inc., and
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National Milk Producers Federation. The plaintiffs
in these cases attack the Cooperatives Working
Together (CWT) program. The CWT utilized both a
herd retirement program and the export assistance
program aimed at improving farm-level prices. The
lawsuits all allege that the CWT program constituted
a conspiracy to reduce the supply of dairy cattle
and thereby artificially raise the price of milk in
violation of the antitrust laws. Plaintiffs claim that
pre-production supply management — retiring
cows before they could produce milk — was not
protected conduct under the Capper-Volstead Act.
Dairy farmers have already agreed to settle the
indirect purchaser claims, i.e., claims by people who
purchased milk and milk products at the grocery
store, for $52 million. No trial date has been set for
this action.
Similar cases were filed and ended up in the
Southern District of Illinois, where they remain
pending. In September 2015, a separate case was
filed in the Middle District of Florida based upon
allegations that are substantially the same as those
in the previously filed case. The parties in this case
have finished discovery and are currently awaiting
summary judgment rulings. The case is set for a trial
the first half of 2019.
Dairy Farmers
In the last 10 years, multiple antitrust class action
lawsuits have been filed against Dairy Farmers
of America, Inc. (DFA), a national milk marketing
cooperative, as well as against Dean Foods
Company, and various alleged co-conspirators in
federal courts in Vermont, Tennessee, California,
Mississippi and Illinois. Unlike in the lawsuits involving
the CWT program, the plaintiffs in these cases are
farmers who sold milk through DFA and its affiliates.
Plaintiffs allege that DFA conspired with purchasers
of milk to reduce the price paid for milk to the
farmers. Various defendants and cases have settled,
but several cases remain.
115 farmers have opted-out of the class action
and filed a complaint alleging monopolization and
restraint-of-trade claims under the Sherman Act. The
central allegation is that through various acquisitions
and agreements with other dairy companies (such
as Dean and National Dairy), DFA has reduced the