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From Antitrust Law Daily, September 18, 2014

Consumer class certified in raw milk price fixing case

By Jeffrey May, J.D.

The federal district court in Oakland, California, has certified a class of approximately 46 million consumers from 14 states and the District of Columbia to challenge an alleged conspiracy to limit the production, and thereby increase the price, of raw milk. However, the court refused to include residents of West Virginia in the class. Therefore, the plaintiffs' motion for class certification was granted in part (Edwards v. National Milk Producers Federation, September 16, 2014, White, J.).

The suit was brought on behalf of consumers from 15 states and the District of Columbia who indirectly purchased milk and/or other fresh milk products—such as cream, half & half, yogurt, cottage cheese, cream cheese, and sour cream—for their own use from 2003 to the present. The plaintiffs alleged violations of the state antitrust laws of the following 15 states: Arizona, California, Kansas, Massachusetts, Michigan, Missouri, Nebraska, Nevada, New Hampshire, Oregon, South Dakota, Tennessee, Vermont, West Virginia, and Wisconsin. The suit named the National Milk Producers Federation, Dairy Farmers of America, Inc., Land O’Lakes, Inc., Dairylea Cooperative Inc., and Agri-Mark, Inc. as defendants.

According to the plaintiffs, the defendants conspired to limit the production of raw farm milk through premature “herd retirements.” These herd retirements required participating dairy farmers to destroy dairy cows and to agree not to reenter the dairy farming business for at least one year. The defendants did not dispute that they engaged in herd retirement. Instead, they contended that their conduct was immune from antitrust liability pursuant to the Capper-Volstead Act. The court did not, however, take up the immunity issue in deciding the motion for class certification.

The court was satisfied that an identifiable and ascertainable class existed. The class definition provided a description of the allegedly offending products and the eligible dates of purchase that enabled a prospective class member to determine whether he or she was an indirect purchaser of milk and/or other fresh milk products during the class period.

Further, the requirements of Rule 23 of the Federal Rules of Civil Procedure were met, according to the court. With a class numbering approximately 46 million, the numerosity requirement was easily satisfied. With respect to the commonality, typicality, superiority, and predominance requirements, the court concluded that the plaintiffs demonstrated that common legal questions predominate over individualized issues and that a class action would be a superior method for resolving this litigation. There was a key common question of whether the defendants violated the indirect purchaser antitrust laws from the class states. Moreover, the plaintiffs met their burden to demonstrate that damages from the challenged conduct may be calculated on a classwide basis. The plaintiffs’ expert set forth a damages model that was capable of calculating the allegedly inflated prices that class members paid in each class state as a result of the nationwide conspiracy, in the court's view. The court also was satisfied that the plaintiffs were adequate class representatives and that plaintiffs’ counsel would vigorously prosecute the action on behalf of the class.

West Virginia consumers. The plaintiffs failed to demonstrate standing for the class from West Virginia because there is no plaintiff from that state. Thus, the court denied the motion for class certification with respect to the class from West Virginia.

The case is No. C 11-04766 JSW.

Attorneys: Steven N. Berk (Berk Law PLLC) for Matthew Edwards. Chong Seok Park (Steptoe and Johnson LLP) for National Milk Producers Federation. Jesse William Markham (Law Offices of William Markham, PC) for Dairy Farmers of America, Inc. Clifford G. Tsan (Bond Schoeneck and King, PLLC) for Dairylea Cooperative Inc. Jan Nielsen Little (Keker & Van Nest, LLP), and Jill M O'Toole (Shipman and Goodwin LLP) for Agrimark, Inc. George Arnold Nicoud, III (Gibson, Dunn & Crutcher LLP), and Scott C. Solberg (Eimer Stahl, LLP) for Land O'Lakes, Inc.

Companies: National Milk Producers Federation; Dairy Farmers of America, Inc.; Dairylea Cooperative Inc.; Agrimark, Inc.; Land O'Lakes, Inc.

MainStory: TopStory Antitrust CaliforniaNews

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