In re Dairy Farmers of Am., Inc., Cheese Antitrust Litig.

Citation60 F.Supp.3d 914
Decision Date18 August 2014
Docket NumberMDL No. 2031,Master File No. 9 CR 3690
PartiesIn re: Dairy Farmers of America, Inc., Cheese Antitrust Litigation This Document Relates to: Direct Purchaser Actions
CourtUnited States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)

60 F.Supp.3d 914

In re: Dairy Farmers of America, Inc., Cheese Antitrust Litigation
This Document Relates to: Direct Purchaser Actions

Master File No. 9 CR 3690
MDL No. 2031

United States District Court, N.D. Illinois, Eastern Division.

Signed August 18, 2014


60 F.Supp.3d 919

MEMORANDUM OPINION AND ORDER

Robert M. Dow, Jr., United States District Judge

This matter is before the Court on Defendant Schreiber Foods, Inc.'s motion for

60 F.Supp.3d 920

summary judgment [430]. For the reasons set forth below, the Court grants Defendant Schreiber's motion for summary judgment [430].

I. Background

This MDL action was reassigned from Judge Hibbler's docket to this Court's docket on April 30, 2012.

A. Procedural History for Direct Purchaser Actions

Named Direct Purchaser Plaintiffs (“Plaintiffs”) are Indriolo Distributors, Inc., a cheese distributor; Knutson's, Inc., a dairy farmer and Class III milk futures trader; and Valley Gold, LLC, a raw milk purchaser. Plaintiffs initially sued the following Defendants: Defendant Dairy Farmers of America, Inc. (“DFA”), a dairy marketing cooperative consisting of more than 18,000 dairy farmers in 48 states; Defendant Keller's Creamery LP, a butter manufacturer headquartered in Kansas City, Missouri, and wholly owned by DFA; Defendant Gary Hanman, the President and Chief Executive Officer of DFA from January 1, 1998 until December 31, 2005; Defendant Gerald Bos, the Chief Financial Officer of DFA from January 1, 1998 until December 31, 2005; Defendant Frank Otis, the Chief Executive Officer of Keller's in 2004; and Defendant Glenn Millar, the Vice President of Procurement and Operations for Keller's in 2004.

The direct purchaser cases have been consolidated for pre-trial proceedings in this docket. The direct purchasers' amended corrected consolidated class action complaint (“initial complaint”) [86] alleged that Defendants violated Sections 1 and 2 of the Sherman Act (Counts 1–3), violated the Commodity Exchange Act (“CEA”), 7 U.S.C. § 1 et seq, (Count 4), were unjustly enriched at Plaintiffs' expense (Count 5), and violated the Racketeer Influenced and Corrupt Organizations Act (“RICO”) (Count 6). The initial Defendants collectively filed motions to dismiss, which Judge Hibbler denied in part and granted in part [141 and 142]. All parties named in the initial complaint have reached a settlement with Plaintiffs. The Court has issued an order granting preliminary approval of the settlement and a fairness hearing is set for August 19, 2014.

On March 22, 2012, Plaintiffs filed a second amended class action complaint [245], which added Schreiber Foods, Inc. (“Schreiber”) as a named Defendant and added a Cartwright Act claim under California law. Defendant Schreiber is an employee-owned manufacturer and distributor of natural cheese, process cheese, and cultured dairy products, such as cream cheese and yogurt, headquartered in Green Bay, Wisconsin. Schreiber moved to dismiss the second amended class action complaint. The Court granted in part and denied in part Defendant Schreiber's motion to dismiss, dismissing Counts 2 and 3 (monopolization and attempted monopolization in violation of § 2 of the Sherman Act) and allowing Plaintiffs to go forward with their claims arising under § 1 of the Sherman Act, 15 U.S.C. § 1 (Count I), § 22 of the Commodity Exchange Act, 7 U.S.C. § 25 (Count IV), and the Cartwright Act (Count V), as well as a claim labelled “unjust enrichment and restitution” (VI). Schreiber now moves for summary judgment on these remaining claims.

B. Discovery

This litigation has been going on for five years, and Schreiber has been a Defendant for at least two. Although Plaintiffs understandably have been preoccupied with settling the portion of the case that relates to the DFA Defendants, Schreiber also understandably wants its role in these events adjudicated. To that end, in order

60 F.Supp.3d 921

to satisfy on the one hand Plaintiffs and DFA in pursuit of an expeditious settlement and on the other Schreiber in pursuit of a declaration as to which side of the “v” it belongs on, the Court set the parties on the path of “focused” discovery.

Fortunately for Plaintiffs, they have had in their possession for ample time documents and deposition testimony from the Commodity Futures Trading Commission (“CFTC”) investigation. Even if the CFTC investigation was focused on manipulation by Defendants, and not a conspiracy including Schreiber, the massive amount of information collected, both in the form of documents and depositions, undoubtedly provides a window into the conduct of the relevant players in the market during the relevant time period.

Since the summary judgment motion was filed, Plaintiffs also have conducted additional (albeit limited) Rule 56(d) discovery.1 Plaintiffs survived Schreiber's motion to dismiss because of allegations that “high-level” Schreiber personnel had a high degree of communication with “high-level” DFA personnel. Thus, after Schreiber filed its summary judgment motion, this Court initially (and Magistrate Judge Valdez subsequently) gave Plaintiffs leave to discover information regarding high-level Schreiber and DFA employees that might corroborate Plaintiffs' allegations that those employees agreed to coordinate their purchases of spot cheese on the Chicago Mercantile Exchange (“CME”). Plaintiff were given that discovery and then sought to depose additional employees who worked with those high-level employees, in the hopes of uncovering additional details about the sale of five million pounds of cheese from DFA to Schreiber. Both Magistrate Valdez and this Court concluded that there was no indication that additional depositions would reveal anything fruitful. As the Court previously noted in denying Plaintiffs' objections to Judge Valdez's 56(d) rulings, Plaintiffs deposed Gary Hanman and Larry Ferguson, the executives responsible for negotiating the deal, and Tom Goddard, the DFA employee responsible for implementing the deal. They also deposed Nancy Schwenke, the employee responsible for implementation on Schreiber's side. The Court also noted that the secretaries and purchasing personnel that were the subject of the protective order would be even less likely to provide useful testimony ten years after the events in question, as there are obvious limitations associated with taking depositions a decade after the fact.2

60 F.Supp.3d 922

In total, Plaintiffs have taken twelve depositions of DFA employees, Schreiber employees, and third parties, reviewed the documents produced during the CFTC investigation, the transcripts of fifteen depositions taken by the CFTC, and additional documents and interrogatory responses from Schreiber and DFA produced in this litigation. As such, the fact that discovery on additional matters is not complete, at least in Plaintiffs' estimation, does not prevent the Court from resolving this central issue now. See Cowen v. Bank United of Texas, FSB, 70 F.3d 937, 941 (7th Cir.1995) (noting the propriety of a defendant moving for summary judgment before class certification has been determined); see also Chambers v. Am. Trans Air, Inc., 17 F.3d 998, 1002 (7th Cir.1994) (“[T]he fact that discovery is not complete—indeed, has not begun—need not defeat the motion. A defendant may move for summary judgment at any time” (internal quotation marks omitted)). The Court believes that Plaintiffs have had more than enough time and access to conduct the discovery needed to support their allegations in response to Schreiber's summary judgment motion. In sum, the Court concludes that the management of discovery and dispositive motions has given both sides access to the relevant universe of materials and has equitably accounted for Plaintiffs' insistence that the fairness hearing on the motion for final approval of the class settlement proceed in a timely fashion and Schreiber's insistence that its status—as absent class member or alleged conspirator—be resolved prior to the fairness hearing.3

C. The Parties' Fact Statements and Responses

Instead of filing a “concise” response to Schreiber's fact statements, Plaintiffs have submitted upwards of three-to-five-page responses to many of those fact statements, attempting to insert new facts into the record while also denying certain of Schreiber's statements. (In contrast, Schreiber's responses never exceeded one page and usually were limited to a concise paragraph.) Although many of Plaintiffs' responses are improper (see, e.g., De v. City of Chicago, 912 F.Supp.2d 709, 715 (N.D.Ill.2012) (“It is improper, and a violation of Local Rule 56.1, for the nonmoving party to add additional facts to his Local Rule 56.1(b)(3)(B) response”); Prewitt v. United States, 2012 WL 5381281 at *2 (N.D.Ill. Oct. 31, 2012) ), in the interest of efficiency, the Court has reviewed and considered the entire 113–page response to Schreiber's fact statements. However, it also is the function of the Court to eliminate from consideration any argument, conclusions, and assertions that are unsupported by the documented evidence of record offered in support of the statement. Thus, to the...

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