Alexander v. NATIONAL FARMERS'ORGANIZATION, 19191-A-1.

• Decision Date: 16 September 1986
• Docket Number: No. 19191-A-1.,19191-A-1.
• Citation: 645 F. Supp. 1146
• Parties: Robert B. ALEXANDER, et al., Plaintiffs, v. NATIONAL FARMERS' ORGANIZATION, et al., Defendants and Counterclaim Plaintiffs, v. ASSOCIATED MILK PRODUCERS, INC., et al., Counterclaim Defendants.
• Court: U.S. District Court — Western District of Missouri

645 F. Supp. 1146

Robert B. ALEXANDER, et al., Plaintiffs, v. NATIONAL FARMERS' ORGANIZATION, et al., Defendants and Counterclaim Plaintiffs, v. ASSOCIATED MILK PRODUCERS, INC., et al., Counterclaim Defendants.

No. 19191-A-1.

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

September 16, 1986.

David A. Donohoe, Akin, Gump, Strauss, Hauer & Feld, Washington, D.C., for National Farmers' Organization, defendant and counterclaim plaintiffs.

Donald W. Barnes, Arent, Fox, Kintner, Plotkin & Kahn and Colvin A. Peterson, Jr., Watson, Ess, Marshall & Enggas, Kansas City, Mo., for Associated Milk Producers, Inc., counterclaim defendants.

Sydney Berde, Berde & Hagstrom, P.A., St. Paul, Minn., for Central Milk Producers Co-op, counterclaim defendants.

George A. Leonard, Shughart, Thomson & Kilroy, and Major W. Park, Jr., Gage & Tucker, Kansas City, Mo., for Mid-America Dairymen, Inc., counterclaim defendants.

MEMORANDUM AND ORDER DIRECTING ENTRY OF FINAL JUDGMENT AND DECREE

JOHN W. OLIVER, Senior District Judge.

I.

Order (5) entered June 17, 1986 directed counsel to promptly schedule a conference for the purpose of agreeing on the forms of final judgments that should be entered on remand in order that appropriate and immediate appeals could be noticed in regard to any of the orders entered on July 5, 1985 and on June 17, 1986. See 637 F.Supp. 1487 at 1516-17. That order provided that if counsel were able to reach agreement, their proposed forms of final judgment should be presented to the Court for approval on or before June 30, 1986.

Order (5) also provided that: "In the event counsel are not able to reach full agreement, each party shall separately prepare, serve, and file their proposed forms of final judgment and their respective proposed orders together with a short statement in support of their respective positions, on or before June 30, 1986." Counsel requested and the Court granted an extension of the June 30, 1986 deadline until August 4, 1986.

The Court received separate letters dated August 4, 1986 from opposing counsel, both of which advised that counsel had not been able to reach agreement. Both letters enclosed separate proposed forms of a final judgment and forms of an injunction. Neither side, however, filed "a short statement in support of their respective positions," as directed in Order (5).

Statements in support were eventually filed pursuant to an agreed time schedule, the last filing being received on September 5, 1986. We have given priority attention to the filings of the parties, consistent with our earlier scheduled commitments to other cases on the docket, and will direct the Clerk to enter a final judgment and decree pursuant to Fed.R.Civ.P. 58.

II.

The parties' disagreement centered on the form of the injunction rather than on the form of the final judgment. NFO's August 4, 1986 letter accurately stated that there were "substantial and substantive differences between the two sides" only in regard to "the extent and character of the injunction that the Court should enter on the sham litigation point." That letter pointed out that in regard to the final judgment, as distinguished from the injunction, the differences between the parties were "essentially questions of appropriate form" and that "five out of NFO's six proposed provisions essentially parallel provisions proposed by the counterclaim defendants."

Both sides proposed particular paragraphs to be included in the final judgment that would, in effect, paraphrase findings of fact and conclusions of law made both by the Court of Appeals and by this Court. It is not necessary that the Court include the paragraphs proposed by the parties because the Court of Appeals' opinion speaks for itself, and because we have expressly incorporated by reference in the final judgment and decree all findings of fact and conclusions of law that have been made by this Court following remand.

The final judgment includes the substance of all six paragraphs proposed for inclusion by NFO and the substance of all fourteen paragraphs proposed by counterclaim defendants, excepting only paragraphs 2, 3, 5, 6, and 7, all of which paraphrase portions of what this Court has heretofore stated of record.

We turn now to the form of injunction about which the parties are in substantial dispute.

III.

"Issue No. 7—Injunctive Relief" presented the question on remand of what, if any, injunctive relief NFO may be entitled to under the circumstances of this case. 614 F.Supp. 745 at 799. The form of the proposed injunction attached to NFO's October 11, 1983 post-remand motion for injunctive relief was in substantially different form than the form of NFO's presently proposed injunction forwarded in NFO's August 4, 1986 letter.

For reasons stated in detail in regard to "Issue No. 7—Injunctive Relief," see 614 F.Supp. 799 to 808, we rejected the form of the injunction proposed by NFO in its October 11, 1983 motion and entered the following orders:

ORDERED (1) that NFO is entitled to an injunction which will specifically prohibit the initiation or maintenance of sham litigation and threats of litigation against potential buyers of NFO milk. It is further

ORDERED (2) that NFO is not entitled to any further equitable relief other than that stated in Order (1) under the factual circumstances and applicable principles of equity. It is further

ORDERED (3) that appropriate further proceedings will later be directed in regard to how the form of injunction shall be settled.

Id. at 808.

Those orders were entered in light of our detailed discussion of the scope of the injunction to which we concluded NFO was entitled under the Court of Appeals' decision. Order (3), of course, expressed our confidence that counsel would be able to agree on the form of the limited injunction that would be granted. Because that expectation has not been realized, it is necessary that we discuss NFO's post-remand position in regard to injunctive relief in some detail.

IV.

NFO's October 11, 1983 proposed form of injunction was eleven pages long. Paragraph II(1) and Paragraph II(2)(a) of that proposed injunction were the only paragraphs proposed by NFO to prohibit sham litigation.¹ NFO did not mention Paragraph II(2)(a) in its October 11, 1983 brief in support of the form of injunction it proposed immediately after remand. NFO's brief recognized, however, that Paragraph II(1) was "likely to be truly controversial" for the reason such a provision "may be said to curtail First Amendment rights that defendants would otherwise possess." (NFO's October 11, 1983 brief, p. 8). NFO directed attention to National Society of Professional Engineers v. United States, 435 U.S. 679, 98 S.Ct. 1355, 55 L.Ed.2d 637 (1978), to support the language it proposed in Paragraph II(1), stating that "all three defendants overtly engaged in unlawful sham litigation or threats of litigation."² Id. (Emphasis added).

The difficulty with NFO's Paragraph II(1) and Paragraph II(2)(a) as originally proposed in 1983 and with the provisions proposed in Paragraph II of its currently proposed form of injunction is that none of those proposed paragraphs so much as mention sham litigation. It was for that reason that we stated in our July 5, 1985 memorandum opinion that while an injunction against "sham litigation" would be entered "in the form as generally stated in paragraphs II(1) and II(2)(a) of NFO's proposed injunction," such an injunction would be worded in "much more direct language" to make clear that the "injunction ... to be granted shall be limited to a prohibition against the institution of threatened sham litigation." 614 F.Supp. at 802. (Emphasis added).

We believed then and we believe now that the injunction should include specific language that states that the prohibition is directed against sham litigation. For the Court of Appeals made clear, at least to this Court, that the findings of fact it made in regard to the litigation filed by the counterclaim defendants against persons who sold milk to NFO, as distinguished from their litigation against NFO, were made in light of what the Court of Appeals considered to be sham, as distinguished from legitimate, litigation.

The Court of Appeals stated that the "controlling legal principle" to be applied to the facts found by it was clear. The Court of Appeals concluded that "resort to judicial processes is exempt from antitrust attack under the Noerr-Pennington doctrine, unless it may be characterized as a sham cover for what is really just an attempt to directly interfere with the business relations of a competitor." 687 F.2d 1173 at 1200.³ (Emphasis added).

NFO did not propose any provision in its October 11, 1983 proposed injunction that was in any way similar to the notification provisions stated in Paragraph III of its presently proposed injunction. We are satisfied, however, that the substance of NFO's currently proposed Paragraph III should be included in the injunction to be issued. If that new provision proves to be either ineffective or unduly burdensome, either side may move for modification.

V.

The Court of Appeals emphasized that the buyers of NFO milk should not be made parties to litigation that the counterclaim defendants might bring in regard to membership disputes. For that court concluded that "any legitimate claims as to unlawful membership `raiding,' however, could be fully pursued and vindicated in direct actions against NFO." The Court of Appeals also suggested that the "co-ops might also have sought specific performance of their marketing contracts" in direct actions against the producers of the milk. Id. It recognized that "there may be circumstances in which actions against a competitor's customers are in good faith...." Id.

The injunction to be issued will therefore direct that future litigation based on alleged unlawful membership "raiding" shall be maintained in direct actions against NFO. It will also include a provision that...