Baby Food Antitrust Litigation, In re
| Decision Date | 12 January 1999 |
| Docket Number | No. 92-,No. 93-,Nos. 97-5609,No. 98-5125,98-5125,92-,93-,s. 97-5609 |
| Citation | 166 F.3d 112 |
| Parties | 1999-1 Trade Cases P 72,396 In re BABY FOOD ANTITRUST LITIGATION Jacob Blinder & Sons, Inc., Wiseway Super Food Center, Inc., Super Center, Inc., United Brothers Finer Foods, Inc., L.L. Harris Wholesale Grocery, Peter J. Schmitt & Co., 3932 Church Street Supermarket, Inc., Arleen Food Products Co., Inc., Rubin Brooks and Sons, Inc., Appellants. (D.C. Civilcv-05495). Jacob Blinder & Sons, Inc., on behalf of itself and all others similarly situated, v. Gerber Products Company; H.J. Heinz Company; Ralston Purina Company; BNNC Corporation, (now dissolved) fka Beech-Nut-Nutrition fka Beech-Nut Foods Corporation (now dissolved) fka Baker/Beech-Nut Corporation (now dissolved) BCN Corporation, (now dissolved) fka Beech-Nut Corporation; Nestle Holdings, Inc.; (Newark New Jersey Civilcv-05495). Peter J. Schmitt Co., on behalf of itself, v. Gerber Products Company; H.J. Heinz Company; Ralston Purina Company; BNNC Corporation, (now dissolved) aka Beech-Nut-Nutrition aka Beech-Nut Foods Corporation (now dissolved) aka Baker/Beech-Nut Corporation (now dissolved) BCN Corporation, (now dissolved) aka Beech-Nut Corporation; Nestle Holdings, Inc.; (Newark New Jersey Civilcv-00047). Wiseway Super Food Center, Inc., on behalf of itself and all others similarly situated, v. Gerber Products Company; H.J. Heinz Company; Ralston Purina Company; BNNC Corporation, (now dissolved) aka Beech-Nut-Nutrition aka Beech-Nut Foods Corporation (now dissolved) aka Baker/Beech-Nut Corporation (now dissolved) BCN Corporation, (now dissolved) aka Beech-Nut Corporation; Nestle Holdings, Inc.; (Newark New Jersey Civilcv-00048). Super Center, Inc., on behalf of itself and all others similarly situated, v. Gerber Products Company; H.J. Heinz Company; Ralston Purina Company; BNNC Corporation, (now dissolved) aka Beech-Nut-Nutrition aka Beech-Nut Foods Corporation (now dissolved) aka Baker/Beech-Nut Corporation (now dissolved) BCN Corporation, (now dissolved) aka Beech-Nut Corporation; Nestle Holdings, Inc.; ( |
| Court | U.S. Court of Appeals — Third Circuit |
Michael J. Freed, Much, Shelist, Freed, Denenberg, Ament, Bell & Rubenstein, Chicago, IL, Joel C. Meredith, Daniel B. Allanoff, Meredith, Cohen, Greenfogel & Skirnick, Philadelphia, PA, Joseph J. De Palma, Allyn Z. Lite, Goldstein, Lite & De Palma, Newark, NJ, Perry Goldberg, Granvil I. Specks, Specks & Goldberg, Dianne M. Nast, Roda & Nast, Lancaster, PA, Robert A. Skirnick (Argued), Meredith, Cohen, Greenfogel & Skirnick, New York, NY, for Appellants.
Arnold B. Calmann, Saiber, Schlesinger, Satz & Goldstein, Newark, NJ, Joseph A. Tate (Argued), Judy L. Leone, George G. Gordon, Dechert, Price & Rhoads, Philadelphia, PA, for Appellee Gerber Product Company.
Edward P. Henneberry (Argued), Keith E. Pugh, Jr., Robert L. Green, Jr., Ellen S. Winter, Howrey & Simon, Washington, DC; Matthew P. Boylan, Lowenstein Sandler, Roseland, NJ, for Appellee HJ Heinz Company.
Mary E. Kohart (Argued), Patrick T. Ryan, Patricia Proctor, Drinker, Biddle & Reath, Philadelphia, PA, for Appellee Ralston Purina Company.
Terrence C. Sheehy (Argued), Howrey & Simon, Washington, DC, for Appellees BNNC Corporation; BCN Corporation; and Nestle Holdings, Inc.
Before: BECKER, Chief Judge, ROSENN, Circuit Judge and KATZ, District Judge *
This appeal, relating to a highly concentrated nationwide industry, raises interesting questions of proof and law in a hotly-contested antitrust action. The plaintiffs, direct purchasers of baby food from defendant manufacturers, include wholesalers, supermarket chains, and other direct purchasers. The defendants, nationally prominent corporations, are Gerber Products Company ("Gerber"), H.J. Heinz Co. ("Heinz"), Nestle Food Company/Beech-Nut ("Nestle/Beech-Nut") and Ralston Purina Company/BeechNut ("Ralston/Beech-Nut") (collectively "Beech-Nut"). 1 Collectively, they account for over 98% of all baby food products manufactured and sold in the United States.
The plaintiffs are Jacob Blinder & Sons, Inc., Wiseway Super Food Center, Inc., Super Center, Inc., United Brothers Finer Foods, Inc., L.L. Harris Wholesale Grocery, Peter J. Schmitt & Co., 3932 Church Street Supermarket, Inc., Arleen Food Products Co., Inc., and Rubin Brooks and Sons, Inc. They brought this anti-trust class action against the defendant manufacturers under §§ 4 and 6 of the Clayton Act, 15 U.S.C. Sections 15 and 26, in the United States District Court for the District of New Jersey. They allege that beginning in early 1975 and continuing until December 31, 1993, 2 the defendants engaged in an unlawful conspiracy in violation of Section 1 of the Sherman Act (15 U.S.C. § 1) to fix, raise, and maintain wholesale prices and price levels of baby food in the United States resulting in injury and damage to the plaintiffs.
At the conclusion of discovery, each defendant filed a motion for summary judgment. The District Court granted the motion in favor of all defendants. The clerk taxed costs in favor of the defendants and that court affirmed the award of costs.
Defendants timely appealed from both orders to this court. We affirm.
Gerber, although the smallest of the defendant corporations, is the nation's largest manufacturer of baby food products and accounts for approximately 70% of the total market in the United States. Heinz and Beech-Nut share almost equally the balance of the market. Gerber manufactures and sells approximately 200 different baby food products; Heinz follows closely with 165 and BeechNut with approximately 140. Collectively, they sell slightly more than 500 baby food products grouped into five broad categories: First Food, Second Foods, Third Foods, Cereals, and Juices. Together, they provide much of the nutrition for most of the nation's infant population.
Through the pricing of their products, each defendant has sought to differentiate itself and carve out a company niche in the marketplace. Gerber is the undisputed market leader and premium brand, selling its products nationwide and focusing only on baby food. Heinz is the "value" brand, consistently adopting strategies to maintain a significant price spread between itself and Gerber. Heinz has had a strong presence in the central Midwestern and Southwestern parts of the country. Beech-Nut, initially positioned as a low-priced brand, underwent a struggle from 1985 through 1989 under Nestle ownership to become a premium brand with prices higher than Gerber's. In 1989, when Ralston acquired Beech-Nut from Nestle, Ralston decided to elevate its price structure to be competitive with Gerber's. Beech-Nut traditionally has had a strong presence in New England, New York, and Eastern Pennsylvania.
Many retailers have come to carry only two brands of baby food. Gerber is almost always one of the two. Significantly, each company has two pricing levels: the list price and the transaction price. The list price, the price officially announced by the company, is used as a base price from which customer discounts and allowances are deducted to obtain the transaction price. The transaction price is the price at which the wholesalers and supermarket chains...
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...1, 51-62 (1911) (discussing concerted action requirement for violation under [section] 1 of the Act); In re Baby Food Antitrust Litig., 166 F.3d 112, 117 (3d Cir. 1999) (describing the existence of an agreement as the "hallmark" of a [section] 1 claim and finding no violation where there wa......
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Antitrust violations.
...1, 51-62 (1911) (discussing concerted action requirement for violation under [section] 1 of the Act); In re Baby Food Antitrust Litig., 166 F.3d 112, 117 (3d Cir. 1999) (describing the existence of an agreement as the "hallmark" of a [section] 1 claim and finding no violation where there wa......
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Antitrust violations.
...1, 51-62 (1911) (discussing concerted action requirement for violation under [section] 1 of the Act); In re Baby Food Antitrust Litig., 166 F.3d 112, 117 (3d Cir. 1999) (describing the existence of an agreement as the "hallmark" of a [section] 1 claim and finding no violation where there wa......
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Antitrust violations.
...1, 51-62 (1911) (discussing concerted action requirement for violation under [section] 1 of the Act); In re Baby Food Antitrust Litig., 166 F.3d 112, 117 (3d Cir. 1999) (describing the existence of an agreement as the "hallmark" of a [section] 1 claim and finding no violation where there wa......