Marketing Assist. Plan, Inc. v. Associated Milk Pro., Inc.

• Decision Date: 24 February 1972
• Docket Number: Civ. A. No. 71-H-841.
• Citation: 338 F. Supp. 1019
• Parties: MARKETING ASSISTANCE PLAN, INC., et al., Plaintiffs, v. ASSOCIATED MILK PRODUCERS, INC., Defendant.
• Court: U.S. District Court — Southern District of Texas

338 F. Supp. 1019

MARKETING ASSISTANCE PLAN, INC., et al., Plaintiffs, v. ASSOCIATED MILK PRODUCERS, INC., Defendant.

Civ. A. No. 71-H-841.

United States District Court, S. D. Texas, Houston Division.

February 24, 1972.

Fulbright, Crooker & Jaworski, Thomas R. McDade, Houston, Tex., for plaintiffs.

Sewell, Junell & Riggs, Ben G. Sewell, Houston, Tex., for defendant.

MEMORANDUM OPINION:

SEALS, District Judge.

The defendants in this antitrust action have filed a Motion For Summary Judgment and alternatively a Motion to Dismiss for failure to state a claim under the antitrust laws. The Plaintiffs are a milk cooperative association which markets its members' milk in Texas, and two individual members of the association. The Defendant is a milk cooperative association which markets its members' milk in Texas and other states. The two associations are direct competitors. The Plaintiffs will be referred to collectively as MAP and the Defendant as AMPI.

MAP seeks damages from AMPI for certain alleged anti-competitive practices and an injunction prohibiting such practices. MAP's cause of action is predicated upon alleged violations of the "Sherman Act," 15 U.S.C. §§ 1-7, the "Clayton Act," 15 U.S.C. §§ 12-27, more particularly sections 2, 4, 7, 13(a), 14, 15, 18 and 26 of Title 15 United States Code, and of the Agricultural Fair Practices Act of 1967, 7 U.S.C. §§ 2301-2306. The complaint also alleges violations of the "Robinson-Patman Act," 15 U.S.C. § 13(a), and of the "Capper-Volstead Act," 7 U.S.C. § 292, and of the Agricultural Marketing Agreement Act, 7 U.S. C. §§ 602, 608c(5) (B) (ii), and 608c(18), and of the antitrust laws of Texas, Tex.Bus.Comm.Code Ann. §§ 15.01-15.03, V.T.C.A.

The Defendant's Motion For Summary Judgment is based upon a release obtained by its predecessor corporation (Milk Producers, Inc.) from MAP and several of its individual members, including one of these plaintiffs (Harlan Irvin), which by its terms bound all members of MAP. The release terminated the litigation in Civil Action No. 68-H-930, MAP, Inc., et al. v. South Texas Producers Assn., et al., and an order was entered upon the settlement dismissing the complaint with prejudice as to its refiling on October 28, 1969. AMPI contends that the release completely bars the instant suit.

Alternatively, AMPI moves that the action be dismissed for failure to state a claim under the antitrust laws: because milk cooperatives are exempt from those laws by reason of specific statutes; because AMPI is immune by reasons of its participation in a federal milk program; because the Capper-Volstead Act and the Agricultural Marketing Agreement Act do not provide a private remedy for violations and these plaintiffs have no standing to bring suit; and because the Agriculture Fair Practices Act applies to "handler" and not to "producers associations."

For purposes of the Defendant's motions, the well-pleaded allegations of the Plaintiffs' complaint must be taken as true. Our task is to determine whether, as a matter of law, AMPI is entitled to either a summary judgment in its favor or a dismissal of the action. The Motion For Summary Judgment and the issue of the release will be dealt with first.

I.

The release is entitled "Full and Complete General Mutual Release Agreement," and was executed for the express purpose of "settling and terminating the dispute between .... the parties .... and to effect and execute mutual releases regarding any and all matters and controversies between them except those expressly excluded herefrom. ..." Besides the original named plaintiffs and defendants, the release also included other MAP members as signators to the extent of persons listed in an appendix who had consented to becoming additional plaintiffs and authorized a settlement. Other MAP members who were neither plaintiffs nor signators were not parties to the release. The various plaintiffs then released the various defendants (including AMPI's predecessor-in-interest):

"... from any and all claims, demands, rights, or causes of action, known or unknown, asserted or not asserted, including but not limited to all claims, demands, rights, or causes of action which were or could have been asserted in said action or growing out of or in any way connected with the matters and issues therein involved ..."

The Supreme Court's decision in Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 91 S.Ct. 795, 28 L. Ed.2d 77 (1971), involved the application of a release in an antitrust action. The Supreme Court held that as a matter of federal law the release of several joint tortfeasors did not operate to release another joint tortfeasor who was not a party to the suit. Instead, the Court ruled "that a party releases only those other parties whom he intends to release." 91 S.Ct. at 810, 28 L.Ed.2d at 97 (emphasis added). The Court's ruling indicates that in the area of federal antitrust law mechanical, common law rules governing releases will be discarded in favor of the intent evidenced by the release itself.

Using this standard two conclusions are immediately apparent. As the successor-in-interest of Milk Producers, Inc., AMPI is entitled to benefit from the release. See, Green v. Valve Corp. of America, 428 F.2d 342 (7th Cir. 1970). The release bars MAP, the other plaintiffs, and any producers who might later join MAP, from subsequently prosecuting that cause of action, or any cause of action, which arose out of the facts giving rise to the dispute in 68-H-930. A release of claims in suit is a complete bar to assertion of the same claims in a later suit. DeHart v. Richfield Oil Corp., 395 F.2d 345 (9th Cir. 1968); W. J. Perryman & Co. v. Penn Mutual Fire Ins. Co., 324 F.2d 791 (5th Cir. 1963). Farmers joining MAP after the release have no cause of action for pre-release activities and damages done to MAP, because any such cause of action belonged to the corporation and was already settled when they joined.

The release bars suits for activities engaged-in and damages consummated before the release. Damages arising from pre-release activity, but which were not consummated until after the release, are also included within the ambit of the release since the plaintiffs had a cause of action for all provable damages that would flow in the future from the defendant's conduct. Zenith Radio Corp., supra, 91 S.Ct. 795, 28 L.Ed.2d at 92. No one would reasonably expect the consequences of pre-release conduct to cease as of the day of the release, and such damages must certainly have been contemplated by the parties. Indeed, the plaintiffs sought to enjoin the continuation of the alleged monopolistic activities for which they sought damages under the antitrust laws. The release of all claims, demands, rights, or causes of action arising out of the subject matter involved in the first suit, except those expressly excluded, included the compromise of the then recoverable post-release damages for the pre-release conduct of the defendants. The release does not bar recovery here of post-release damages which were too speculative to be recovered at the time of the release, for no cause of action had accrued for such damages. Id., 91 S.Ct. 795, 28 L.Ed.2d at 92-93.

The release does not bar the assertion of post-release wrongs done to MAP and its members by the defendants in the earlier action or by their successor, AMPI. By its terms, the release covered only claims disputed and recoverable in that cause of action. It did not and could not settle disputes which had not yet arisen or serve as a license to engage in unlawful monopoly activities against the releasors. Such an absolution would violate public policy. Westmoreland Asbestos Co. v. Johns-Manville Corp., 39 F.Supp. 117, 119 (S.D.N.Y. 1941) aff'd on other grounds, 136 F.2d 844 (2d Cir. 1943); Fox Midwest Theatres, Inc. v. Means, 221 F.2d 173, 179-180 (8th Cir. 1955); Gaines v. Carrollton Tobacco Bd. of Trade, 386 F.2d 757, 759 (6th Cir. 1967).

To summarize, the Court is of the opinion that the release executed in Civil Action 68-H-930 bars the assertion by MAP, other named plaintiffs, other signators and new members, of claims for pre-release damages, and of claims for post-release damages which were the consequences of pre-release activities which could have been recovered in that civil action. The release does not bar post-release consequential damages which were too speculative to be recoverable in the earlier action. The release does not bar the individual claims of members of MAP at the time of the release who were neither named plaintiffs nor signators to the release. See, Anderson Furniture Co. v. Roden, 255 S. W.2d 345 (Tex.Civ.App.1952, writ ref. n. r. e.) The release does not bar the assertion by any of the parties in these categories of any post-release causes of actions for damages caused by renewed monopolistic activities by the defendants in either the first action or this action.

The motion for summary judgment will therefore be denied in part and granted in part.

II.

The defendant has also filed a motion to dismiss this action for failure to state a claim under the antitrust laws of the United States. AMPI's proposition has four general grounds: (1) statutory exemption of milk cooperatives from antitrust laws; (2) immunity stemming from participation in a marketing plan under a federal milk order; (3) the non existence of a private remedy under the Capper-Volstead Act and the Agricultural Marketing Agreement Act deprives the plaintiffs of standing; (4) the inapplicability of...