In re Mushroom Direct Purchaser Antitrust Litig.

• Decision Date: 14 October 2014
• Docket Number: 06–1464,06–0657,Master File No. 06–0620.,Nos. 06–0638,06–0861,06–0932,06–0677,06–1854.,s. 06–0638
• Parties: In re MUSHROOM DIRECT PURCHASER ANTITRUST LITIGATION. This Document Relates to: All Actions.
• Court: U.S. District Court — Eastern District of Pennsylvania

54 F.Supp.3d 382

In re MUSHROOM DIRECT PURCHASER ANTITRUST LITIGATION. This Document Relates to: All Actions.

Master File No. 06–0620.

Nos. 06–0638

06–0657

06–0677

06–0861

06–0932

06–1464

06–1854.

United States District Court, E.D. Pennsylvania.

Signed Oct. 14, 2014.

Adam M. Moskowitz, Thomas A. Tucker Ronzetti, Kozyak Tropin & Throckmorton, Miami, FL, Barry L. Refsin, Hangley Aronchick Segal & Pudlin, Philadelphia, PA, Brent B. Barriere, David L. Patron, Susie Morgan, Phelps Dunbar LLP, New Orleans, LA, Bruce E. Gerstein, Noah Silverman, Garwin Gerstein & Fisher LLP, Kevin Landau, Taus, Cebulash & Landau, LLP, New York, Ny, David P. Smith, Smith Segura & Raphael LLP, W. Ross Foote, Percy Smith & Foote LLP, Alexandria, LA, for Plaintiffs.

Donald M. Barnes, Porter Wright Morris & Arthur LLP, Washington, DC, H. Laddie Montague, Jr., Berger & Montague PC, William A. Destefano, Stevens & Lee, Joseph R. Loverdi, Dilworth Paxson LLP, Philadelphia, PA, for Defendants.

MEMORANDUM

O'NEILL, District Judge.

Among the many motions now pending before me in this antitrust litigation is a motion seeking reconsideration of my March 26, 2009 decision addressing plaintiff's claims under § 1 of the Sherman Act.¹ Dkt. No. 513. Moving defendants were individual members and affiliates of the former Eastern Mushroom Marketing Cooperative (EMMC).² For the following reasons, I will deny moving defendants' request for reconsideration³ and will certify my Order for appeal.

BACKGROUND

The Capper–Volstead Act provides certain agricultural cooperatives with a limited exemption from antitrust laws. See 7 U.S.C. § 291. In their consolidated amended class action complaint, plaintiffs allege that: (1) certain defendants were members of defendant EMMC but were not engaged in agricultural production; (2) defendants entered into multiple agreements with persons or entities not engaged in agricultural production; and (3) defendants engaged in anticompetitive and predatory practices that fall outside of the legitimate objects of an agricultural cooperative. See In re Mushroom Direct Purchaser Antitrust Litig., 514 F.Supp.2d 683, 694 (E.D.Pa.2007). Any of these allegations, if proved, would place defendants outside the Capper–Volstead exemption. Id.

On March 26, 2009, I denied certain defendants' motions for summary judgment and plaintiffs' cross motion for summary judgment on the issue of Capper–Volstead immunity. I found that the inclusion of a non-grower distributor, M. Cutone, in the EMMC's membership was sufficient to destroy defendants' Capper–Volstead immunity. I also found that, even if all EMMC members had satisfied the requirements to qualify the cooperative for Capper–Volstead immunity, the Act's exemption did not extend to protect cooperatives that conspire with entities not engaged in agricultural production as such was the case with Kaolin/South Mill and its distribution entities and LRP–M/Manfredini Enterprises.⁴ In re Mushroom Direct Purchaser Antitrust Litig., 621 F.Supp.2d 274, 289–90 (E.D.Pa.2009). My two separate findings constituted independent grounds for denial of the Capper–Volstead Act's exemption to defendants.

I denied defendants' request pursuant to 28 U.S.C. § 1292(b) to certify my Order for appeal. Dkt. No. 315. Defendants then filed an interlocutory appeal that the Court of Appeals dismissed on August 23, 2011. The Court of Appeals held that a prejudgment order denying the protections of the Capper–Volstead Act was not a collateral order subject to interlocutory appeal. In re Mushroom Direct Purchaser Antitrust Litig., 655 F.3d 158, 167 (3d Cir.2011).

Moving defendants now argue that the Supreme Court's decision in American Needle, Inc. v. National Football League et al., 560 U.S. 183, 130 S.Ct. 2201, 176 L.Ed.2d 947 (2010) and the Court of Appeals' decision in Deutscher Tennis Bund v. ATP Tour, Inc., 610 F.3d 820 (3d Cir.2010), have created an intervening change in the law relating to the single entity enterprise defense, warranting reconsideration of my March 26, 2009 decision with respect to the South Mill mushroom distributors, Manfredini Enterprises and M. Cutone on the availability of the Capper–Volstead exemption. Dkt. No. 513, Mot. at pp. 2–3.

Moving defendants also contend that reconsideration of my prior decision is warranted on the basis of an issue that my prior opinion did not specifically address: whether individual members of the EMMC should lose their Capper–Volstead antitrust exemption when they acted under a good faith belief that the EMMC was properly constituted. Dkt. No. 513, Mot. at p. 1.

STANDARD OF REVIEW

“The scope of a motion for reconsideration[ ] is extremely limited.” OR v. Hutner, 576 Fed.Appx. 106, 109–10 (3d Cir.2014), citing Blystone v. Horn, 664 F.3d 397, 415–16 (3d Cir.2011). The party seeking reconsideration must show at least one of the following: “(1) an intervening change in the controlling law; (2) the availability of new evidence that was not available when the court granted the motion for summary judgment; or (3) the need to correct a clear error of law or fact or to prevent manifest injustice.” Max's Seafood Cafe ex rel. Lou–Ann, Inc. v. Quinteros, 176 F.3d 669, 677 (3d Cir.1999) ; Lazaridis v. Wehmer, 591 F.3d 666, 669 (3d Cir.2010) (per curiam). “In a motion for reconsideration, the burden is on the movant ... to show ‘manifest’ errors of law or fact or new evidence.” Egervary v. Rooney, 80 F.Supp.2d 491, 506 (E.D.Pa.2000) (citation omitted). “[A] motion for reconsideration addresses only factual and legal matters that the Court may have overlooked. [It is improper] to ‘ask the Court to rethink what [it] had already thought through—rightly or wrongly.’ ” Glendon Energy Co. v. Borough of Glendon, 836 F.Supp. 1109, 1122 (E.D.Pa.1993) (citation omitted). “Because of the interest in finality ... courts should grant motions for reconsideration sparingly.” Rottmund v. Cont'l Assur. Co., 813 F.Supp. 1104, 1107 (E.D.Pa.1992).

DISCUSSION

I. American Needle, Deutscher Tennis Bund and the Single Entity Defense

In order to establish a conspiracy in violation of § 1 of the Sherman Act,⁵ plaintiffs must first establish a “contract, combination ... or conspiracy” as “Section 1 applies only to concerted action and does not proscribe independent action by a single entity, regardless of its purpose and effect on competition.” Deutscher Tennis Bund, 610 F.3d at 835, citing Am. Needle, Inc., 560 U.S. at 183, 130 S.Ct. 2201. Concerted action is established where two or more distinct entities agree to take action against a plaintiff. Weiss v. York Hosp., 745 F.2d 786, 812 (3d Cir.1984).

Defendants previously argued that there cannot be an unlawful conspiracy between EMMC grower members and their affiliated distributors because the members and distributors constitute a single economic unit under Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752, 771, 104 S.Ct. 2731, 81 L.Ed.2d 628 (1984) and Sunkist Growers, Inc. v. Winckler & Smith Citrus Products Co., 370 U.S. 19, 27–29, 82 S.Ct. 1130, 8 L.Ed.2d 305 (1962). Therefore, defendants argue, EMMC price fixing is permissible at the distribution level because the plurality of actors required for a conspiracy is absent. Defendants now make the same argument relying on American Needle and Deutscher Tennis Bund which I do not find persuasive.

In American Needle, the Supreme Court reiterated Copperweld's central holding that “substance, not form, should determine whether a[n] ... entity is capable of conspiring under § 1 [of the Sherman Act].” 560 U.S. at 195, 130 S.Ct. 2201, quoting Copperweld, 467 U.S. at 773 n. 21, 104 S.Ct. 2731. The Supreme Court noted that entity analysis requires a determination of whether the alleged contract, combination or conspiracy joins together separate decisionmakers pursuing separate economic interests such that the agreement “deprives the marketplace of independent centers of decisionmaking and therefore of [the] diversity of entrepreneurial interests, and thus of actual or potential competition.” Am. Needle, 560 U.S. at 195, 130 S.Ct. 2201 (internal citations omitted). It reiterated that it has “long held that concerted action under § 1 does not turn simply on whether the parties involved are legally distinct entities. Instead, [the Court] ha[s] eschewed such formalistic distinctions in favor of a functional consideration of how the parties involved in the alleged anticompetitive conduct actually operate.” Id. at 191, 130 S.Ct. 2201. “[T]he inquiry is one of competitive reality....” Id. at 196, 130 S.Ct. 2201.

The plaintiffs in American Needle alleged that the defendants violated § 1 of Sherman Act when they granted exclusive licenses to a number of vendors. The Supreme Court considered the question of whether the National Football League and its various member teams along with the National Football League Properties (NFLP) (formed by the teams in 1963 to develop, license and market their intellectual property) constituted a single economic entity. Reaching its decision, the Supreme Court explained that:

the NFL teams do not possess either the unitary decisionmaking quality or the single aggregation of economic power characteristic of independent action. Each of the teams is a substantial, independently owned, and independently managed business. Their general corporate actions are guided or determined by separate corporate consciousnesses, and their objectives are not common. The teams compete with one another, not only on the playing field, but to attract fans, for gate receipts and for contracts with managerial and playing personnel.

Id. at 196–97, 130 S.Ct. 2201 (citations, alterations and internal quotations omitted). “While [NFL] teams have common interests such as promoting the NFL brand, they are still separate, profit-maximizing entities, and their interests in licensing team trademarks are not necessarily aligned.” Id. at 198, 130 S.Ct. 2201. The Supreme Court ultimately found that “decisions by the NFLP regarding the teams'...