510 F.Supp. 381 (W.D.Mo. 1981), Civ. 19191-1, In re Midwest Milk Monopolization Litigation

Docket Nº:Civ. 19191-1
Citation:510 F.Supp. 381
Party Name:In re Midwest Milk Monopolization Litigation
Case Date:January 29, 1981
Court:United States District Courts, 8th Circuit, Western District of Missouri
 
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Page 381

510 F.Supp. 381 (W.D.Mo. 1981)

In re MIDWEST MILK MONOPOLIZATION LITIGATION.

Robert B. ALEXANDER et al., Plaintiffs,

v.

The NATIONAL FARMERS ORGANIZATION, Inc., et al., Defendants,

v.

ASSOCIATED MILK PRODUCERS, Inc., et al., Counterclaim Defendants.

JPML Docket No. 83.

Civ. No. 19191-1.

United States District Court, W.D. Missouri, Western Division.

Jan. 29, 1981

Page 382

[Copyrighted Material Omitted]

Page 383

[Copyrighted Material Omitted]

Page 384

Harry P. Thomson, Jr., George E. Leonard, Shughart, Thomson & Kilroy, Kansas City, Mo., for Mid-Am.

Sydney Berde and Richard M. Hagstrom, Sydney Berde, P. A., St. Paul, Minn., for CMPC.

Donald M. Barnes, Arent, Fox, Kintner, Plotkin & Kahn, Washington, D. C., Colvin A. Peterson, Jr., Watson, Ess, Marshall & Enggas, Kansas City, Mo., for AMPI.

William A. Carey, Barnett, Alagia & Carey, Washington, D. C., for ARSPC.

Worth Rowley, Washington, D. C., for NFO.

MEMORANDUM OPINION, FINDINGS OF FACT AND CONCLUSIONS OF LAW OF PHASE I, PHASE II AND PHASE III AND ORDERS TO CLERK

VOLUME I OF TWO VOLUMES, containing:

Complete Table of Contents for both volumes Pages 385 to 462, inclusive.

TABLE OF CONTENTS

VOLUME I

PHASE I
_______
PAGE
____
Introduction 385
PHASE I FINDINGS OF FACTS 385
Ultimate Facts Regarding NFO Membership Contract as a Tying Arrangement 407
Ultimate Facts Regarding NFO's Unfair Trade Practices 410
Robinson-Patman Factual Findings 414
Ultimate Facts Regarding NFO Violation of Missouri Law 415
Ultimate Factual Findings in Support of the Plaintiff's Damages 416
PHASE I CONCLUSIONS OF LAW 417
__________________________
Discussion of NFO's Proposed Conclusions of Law Regarding its Alleged Antitrust Exemption 423
Conclusions of Law Regarding Alleged Illegal Boycott 426
Conclusions of Law Regarding NFO Membership Agreement as a Tying Arrangement 427
Conclusions of Law Regarding NFO's Alleged Unfair Trade Practices 429
Conclusions of Law in Regard to Mid-Am's Robinson-Patman Claim 431
Conclusions of Law in Regard to NFO's Alleged Violation of Missouri Law 432
Conclusions of Law in Regard to Plaintiff's Damages 434
PHASE II
________
PHASE II FINDINGS OF FACT--Introduction 434
I. The Case and the Parties 436
II. Trade and Commerce:
Milk Marketing in General
A. Grade A Milk 436
B. Supply and Assembly Patterns 437
C. Federal Milk Marketing Regulations in General 438
D. Class II Pricing: The M-W Series
E. Class I Prices 439
F. Blend Prices 440
G. Class I Utilization 440
H. The Pooling and the Producer-Settlement Fund 440
I. Cooperative Qualification 441
J. Geographic Marketing Areas 442
K. Cooperatives and Premiums 443
III. Early Days of the Alleged Conspiracy
A. The Formation, Scope and Purposes of Associated Dairymen, Inc. 443
B. Mergers 444 Percentages of Milk Pooled by AMPI and Mid-Am on Various Federal Orders 448
C. ADI Establishes a Standby Pool 449
D. AMPI/Mid-Am Alleged Agreements Not to Compete 452
E. Additional Merger Data 453
F. CACF 453
G. Some Alleged Early Efforts Allegedly to Eliminate Outsiders 453
IV. NFO's Alleged Capability in Dairy
A. NFO Formation and Purpose 454
B. NFO's Recruiting Efforts 454
C. NFO Membership Structure 454
D. NFO Marketing Structure 455
E. Master Contracts 455
F. The Holding Action 455
G. NFO Revamps Dairy Department 455
H. Supply Contracts 456
I. NFO Decides to Enter Direct Marketing of Milk 456
J. NFO Allegedly Calls Upon Experience Marketing Hogs, Cattle, Grain 457
K. NFO Milk Allegedly Attractive to Handlers 457
L. NFO Focuses Grade A Dairy Program in Midwest 457
M. NFO Allegedly Preaches Gospel to Non-Members 457
N. Interest in NFO Grade A Milk Marketing Allegedly Grows 457
O. NFO's Claims Regarding Poisoning NFO's Well and Trying to Get It to Join the Club 458
P. Conclusion 458
V. The Southwest
A. Texas 458
B. Oklahoma 462
C. Missouri 467
VI. Chicago 476
VII. Minnesota 487
VIII. Nebraska 494
IX. Kansas and Northwest Missouri 496
X. Alleged Suppression of Evidence 499
PHASE II CONCLUSIONS OF LAW 501
___________________________
PHASE III FINDINGS OF FACT
__________________________
A. Background and Parties 504
B. NFO Programs and Policies Before 1969 506
C. 1969 Meetings Between NFO and Cooperative Leaders 508
D. NFO's Alleged Efforts to Coerce or Destroy Regional Cooperatives 509
E. Alleged Misrepresentation 517
F. Alleged Misrepresentation to USDA and IRS 518
G. Alleged Bad Faith Counterclaim 524 Discussion of NFO's Phase III Proposed Findings of Fact 525
PHASE III CONCLUSIONS OF LAW 527
____________________________
ORDERS TO THE CLERK IN REGARD TO
________________________________
THE ENTRY OF JUDGMENTS 528
______________________

Page 385 JOHN W. OLIVER, Senior District Judge. Introduction For the convenience of the Court and counsel for the parties, the trial of this complex litigation was divided into three parts consistently referred to as Phase I, Phase II and Phase III. For further convenience the various parties were and are referred to as follows:

National Farmers' Organization, Inc., as 'NFO.' Mid-America Dairymen, Inc., as 'Mid-Am.' Associated Milk Producers, Inc., as 'AMPI.' Central Milk Producers Cooperative as 'CMPC.' Associated Reserve Standby Pool Cooperative as 'ARSPC.'

Phase I of this case involves Mid-Am's claim as plaintiff against NFO as defendant for alleged violations of Section 1 of the Sherman Act, Section 2(c) of the Robinson-Patman Act, and Section 274.260 R.S.Mo. 1969. Mid-Am claimed actual damages in the amount of $1,989,350.00, to be trebled, and its attorneys' fees and costs. In accordance with the findings of fact and conclusions of law separately made and stated in connection with Mid-Am's Phase I claim against NFO, an order will be entered directing that judgment be entered against Mid-Am on its Phase I claim and in favor of NFO. Phase II of this case involves NFO's counterclaim against Mid-Am, CMPC, ARSPC, for alleged violations of Sections 1 and 2 of the Sherman Act and Sections 3 and 7 of the Clayton Act. NFO sought equitable relief and damages in the amount of $14,064,068.76, to be trebled, and its attorneys' fees and costs. In accordance with the findings of fact and conclusions of law separately made and stated in connection with NFO's Phase II counterclaim against Mid-Am, CMPC, and ARSPC, an order will be entered directing that judgment be entered against NFO on its Phase II counterclaim and in favor of Mid-Am, CMPC, and ARSPC. Phase III of this case involves AMPI's claims against NFO and nineteen individual NFO members and/or employees for alleged violations of Sections 1 and 2 of the Sherman Act and certain provisions of the Agricultural Fair Practices Act of 1967. AMPI sought equitable relief and claimed damages in the amount of $9,145,003.83, to be trebled, and its attorneys' fees and costs. In accordance with the findings of fact and conclusions of law separately made and stated in connection with AMPI's Phase III claim against NFO, an order will be entered directing that judgment be entered against AMPI on its Phase III claim and in favor of NFO. PHASE I FINDINGS OF FACTS A. Court Exhibit I is a stipulation of 3,206 agreed facts with respect to Mid-Am's claim against NFO. While Mid-Am filed a 289 page document entitled 'Plaintiff's Post-Trial Proposed Findings of Fact,' which contained 2,224 separate paragraphs of proposed findings of fact, Mid-Am simultaneously filed its 'Proposed Findings of Ultimate Facts and Proposed Conclusions of Page 386 Law,' 52 pages in length and containing 239 separate paragraphs of proposed ultimate factual findings. That filing fully sets forth Mid-Am's basic factual and legal theories in support of Mid-Am's liability claims against NFO. NFO's filing entitled 'Defendant's Post-Trial Proposed Findings of Fact and Conclusions of Law,' 35 pages in length, contains 206 separate proposed factual findings to support NFO's various defenses to Mid-Am's claims. Both Mid-Am's proposed findings of ultimate facts and NFO's post-trial proposed findings of fact rely in large part on particular paragraphs of Court Exhibit I, the stipulation of agreed facts. Indeed, Mid-Am, for the most part, actually quotes particular paragraphs of the stipulation as a particular paragraph of a proposed finding of ultimate fact. NFO, on the other hand, elected to cite and paraphrase rather than quote many of the stipulated paragraphs. While Mid-Am consistently and quite routinely denied the accuracy of NFO's paraphrase of the various paragraphs of the stipulation, Mid-Am did, as it must, agree that the various paragraphs cited by NFO in support of its proposed findings of fact were true and accurate factual statements. Careful study of the findings proposed by both parties established that each party in a great many instances either quoted or cited exactly the same paragraph of the stipulation of agreed facts to support one of their respective proposed findings of fact. Each party, of course, either quoted or cited other particular paragraphs of the stipulation in support of other proposed findings which were not quoted or cited by the other party. It is apparent that all questions concerning the accuracy of NFO's paraphrase of a particular paragraph of the stipulation will be eliminated if the Court makes its finding of fact in the exact language of the paragraph of the...

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