LOUISIANA FARMERS'PU v. GREAT ATLANTIC & PACIFIC T. CO.

• Decision Date: 23 September 1941
• Docket Number: No. 126.,126.
• Citation: 40 F. Supp. 897
• Parties: LOUISIANA FARMERS' PROTECTIVE UNION, Inc., v. GREAT ATLANTIC & PACIFIC TEA CO. OF AMERICA, Inc., et al.
• Court: U.S. District Court — Eastern District of Arkansas

40 F. Supp. 897

LOUISIANA FARMERS' PROTECTIVE UNION, Inc., v. GREAT ATLANTIC & PACIFIC TEA CO. OF AMERICA, Inc., et al.

No. 126.

District Court, E. D. Arkansas, W. D.

September 23, 1941.

James H. Morrison, of Hammond, La., Cameron C. McCann, Rene Waguespack, Edward R. Schowalter, all of New Orleans, La., K. K. Kennedy, of Baton Rouge, La., Joseph A. Sims, of Hammond, La., and Taylor & Eichenbaum, Beloit Taylor, and E. Chas. Eichenbaum, all of Little Rock, Ark., for plaintiff.

Frost & Jacobs and Logan Morrill, all of Cincinnati, Ohio, Monroe & Lemann and J. Raburn Monroe, all of New Orleans, La., and Owens, Ehrman & McHaney, Grover T. Owens, and S. Lasker Ehrman, all of Little Rock, Ark., for defendant Great Atlantic & Pacific Tea Co. of America, Inc., and others.

Clark & Rice, William H. Clark, Jr., and Russell V. Rogers, Jr., all of Dallas, Tex., Monroe & Lemann and J. Raburn Monroe, all of New Orleans, La., and House, Moses & Holmes, Jos. W. House, and Denham Wooten, all of Little Rock, Ark., for defendant Safeway Stores, Inc., and another.

LEMLEY, District Judge.

This is an action for treble damages under Title 15, Section 15 of the United States Code Annotated, which provides as follows: "Any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor in any district court of the United States in the district in which the defendant resides or is found or has an agent, without respect to the amount in controversy, and shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney's fee."

The suit was originally brought as a class action by the Louisiana Farmers' Protective Union, Inc., and one Ellis M. Jenkins, an alleged member of said association, as plaintiffs, against the Great Atlantic & Pacific Tea Company of America, Inc., Atlantic Commission Company, Inc., Kroger Grocery & Baking Co., Inc., Wesco Food Co., Inc., Safeway Stores, Inc., and Tri-Way Produce Co., Inc., defendants.

The plaintiffs in their original complaint alleged that the Louisiana Farmers' Protective Union, Inc., was a non-profit cooperative corporation, organized under the laws of the State of Louisiana, and composed of each and every strawberry grower in the State of Louisiana who ships strawberries in interstate commerce, and that the plaintiff Ellis M. Jenkins was a member, and the president, of said association and joined in the complaint "individually for himself, and representing all other members" of the association similarly situated; that the defendants were justly indebted unto "your petitioner" jointly, severally, and in solido in the sum of $8,328,576, together with interest thereon; that the right sought to be enforced on behalf of said association was "a several rights," and that there was a common question of law or fact affecting "the several rights," and that the persons constituting the class were so numerous (upwards of eight thousand) as to make it impracticable to bring them all into court; that during the 1937 season "your petitioner through its members, the strawberry farmers of Louisiana," shipped in interstate commerce 3,400 cars of strawberries, for which said members received an average of $1.57 per crate, and that during the season of 1938 2,500 cars were shipped, for which an average price of $1.97 per crate was received; and that the defendants, in the years 1937 and 1938, handled approximately 25% of "petitioner's" strawberries at retail through their stores operated throughout the United States.

Following these allegations, an attempt was made in the original complaint to allege a violation of the Robinson-Patman Act, the charge being that in the years 1937 and 1938 "the defendants did unlawfully sell petitioner's strawberries in interstate commerce at prices below cost for the sole purpose of destroying competitors and eliminating competition in an attempt to create a monopoly."

It was further alleged in the original complaint that approximately 75% of the strawberries of Louisiana are sold at retail by independent or small groceries or food stores, and that the defendants through their vast holdings, ability to advertise, etc., "have sold your petitioner's commodity for the sole purpose of stifling competition, not only in fresh fruits, such as strawberries, but are attempting to create a monopoly unto themselves for the exclusive distribution of all agricultural and food-stuff commodities at retail in the continental United States."

It was further alleged that, whereas in 1937 the strawberry farmers of Louisiana actually received gross $3,928,768, or $1.57 per crate, for 2,502,400 crates of strawberries shipped, they would have received $6,005,760, or an average of $2.40 per crate, had it not been for the alleged illegal acts of the defendants, making a net loss of $2,076,992 on the 1937 crop; and that, whereas said farmers in 1938 received gross $3,624,800, or $1.97 per crate, for their berries, that had it not been for said alleged illegal acts of the defendants, they would have received $4,324,000 for their berries, making a net loss of $699,200 on the 1938 crop; and it was further alleged that the loss thus sustained "resulted from the illegal acts of the defendants herein, in selling strawberries as `loss leaders' for the purpose of eliminating competition and attempting to create a monopoly." Judgment was asked for the sum total of the alleged damages suffered in the years 1937 and 1938, trebled, plus interest and costs.

The Wesco Food Co., Inc., moved to quash service, which motion was sustained, and it passed out of the case. Motions for a bill of particulars, to strike, to sever, and to dismiss, addressed to the original complaint, were filed by the several remaining defendants, and extensive briefs were submitted by the defendants on said motions. The motions were set down for hearing on oral argument, but, on the day set for the hearing, the plaintiff, Louisiana Farmers' Protective Union, Inc., filed an amended complaint in which its co-plaintiff, Ellis M. Jenkins, was dropped as a party plaintiff.

The amended complaint in question sets up three alleged causes of action, in separate counts, the first based upon the Sherman Anti-Trust Act, U.S.Code Annotated, Title 15, Sections 1 and 2; the second, upon the Clayton Act, Title 15, Section 13; and the third, upon the Robinson-Patman Price Discrimination Act, Title 15, Section 13a.

In the amended complaint the plaintiff, Louisiana Farmers' Protective Union, Inc., alleges, generally, that it is a non-profit co-operative corporation, organized under the laws of the State of Louisiana, and composed of each and every strawberry grower in the State of Louisiana who ships strawberries in interstate commerce, and functions as the marketing agent for its members in the marketing and distribution of strawberries; "that each and every member" of the plaintiff association "has duly assigned" to it "all their right, title, and interest in and to all the damages to their business which they have sustained through and by the unlawful acts of the defendants" as set forth in the complaint; that the defendants are engaged in the retail grocery business as the owners and operators of retail stores located throughout the United States, certain of the defendants being buying subsidiaries of others; that the defendant, A. & P., owns, operates, and controls retail chain stores to the number of 13,300 in 35 states; that the defendant, Kroger, has a chain of 3,990 retail stores in the United States; and the defendant, Safeway, a chain of over 3,020 stores in the United States; that the defendants, "through their retail food stores, under their proper names as shown" in the complaint, "and operating under various other names, but which are wholly controlled and dominated by the defendants, handled in the years 1937 and 1938 approximately 25% of plaintiff's strawberries at retail through their stores operated throughout the United States."

Following these allegations, an alleged violation of the Sherman Act is charged, in count one of the amended complaint, as follows:

"That in the years 1937 and 1938 the defendants combined and conspired with the object and intent of stifling competition and monopolizing retail distribution of food products in the United States, particularly strawberries; that in pursuance of said plan the defendants have employed the merchandising technique of using `loss leaders' of certain products, and more particularly in plaintiff's strawberries, to destroy the business of competitors and in that way control the sole outlet for strawberries and other food products; that the result of said conspiracy was to permit said defendants to dictate not only the prices to be paid by them for plaintiff's strawberries but to create a monopoly unto themselves for the exclusive distribution of all strawberries and agricultural and foodstuff commodities at retail in the United States; that a further result of said conspiracy was to enable the defendants to control the retail distribution of food products, and more particularly strawberries, in such a manner as would vest the defendants as the owners of their various retail outlets with arbitrary power to dictate prices not only to the ultimate consumer but to the producer as well."

The amended complaint then charges, in count two, an alleged violation of the Clayton Act, as follows:

"That the defendants have resorted to the merchandising technique of using `loss leaders' of certain products, and more particularly in the plaintiff's strawberries, with the object and intent of destroying competition, and in that way control the sole outlet for strawberries and other food products; that the use of strawberries as `loss leaders' by the defendants resulted in a price depreciation of the entire strawberry market and an elimination of competition in the strawberry field; that the...