In re Midwest Milk Monopolization Litigation

Citation510 F. Supp. 381
Decision Date29 January 1981
Docket NumberJPML Docket No. 83. Civ. No. 19191-1.
PartiesIn 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.
CourtUnited States District Courts. 8th Circuit. Western District of Missouri

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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                      PAGE
                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        439
                     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
                
                                                            PAGE
                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
                

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 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...

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6 cases
  • Alexander v. NATIONAL FARMERS'ORGANIZATION
    • United States
    • U.S. District Court — Western District of Missouri
    • July 5, 1985
    ...at 11). Defendants noted that the Court of Appeals quoted with apparent approval this Court's observation, In re Midwest Milk Monopolization Litigation, 510 F.Supp. 381, at 420 (1981), which stated that "the record would come closer to supporting a set of findings that NFO became a victim o......
  • Alexander v. National Farmers Organization
    • United States
    • United States Courts of Appeals. United States Court of Appeals (8th Circuit)
    • November 10, 1982
    ...tried in three phases, generating an extensive record more than 15,000 pages in length. See In Re Midwest Milk Monopolization Litigation, 510 F.Supp. 381 (W.D.Mo.1981) (hereinafter Midwest Milk ). The district court 1 found that none of the parties presented sufficient evidence to meet thei......
  • National Farmers' Organization, Inc. v. Associated Milk Producers, Inc.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (8th Circuit)
    • July 17, 1989
    ...court found in favor of NFO on the phase I and III claims and against NFO on the phase II claims. In Re Midwest Milk Monopolization Litigation, 510 F.Supp. 381 (W.D.Mo.1981) (NFO I). On appeal, this Court affirmed the district court with respect to the phase I and III claims. Alexander v. N......
  • Ewald Bros., Inc. v. Mid-America Dairymen, Inc.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (8th Circuit)
    • June 21, 1989
    ...purposes" and was important, at least in principle, to the stable supply of milk. Id. at 1206-07. See In re Midwest Milk Monopolization Litigation, 510 F.Supp. 381, 449-52 (W.D.Mo.1981) (district court findings of fact). Ewald argues that while the NFO Court relieved the standby pool of ant......
  • Request a trial to view additional results

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