STATE OF OHIO EX REL. v. Louis Trauth Dairy

• Decision Date: 23 April 1994
• Docket Number: No. C-1-93-0553.,C-1-93-0553.
• Citation: 856 F. Supp. 1229
• Parties: STATE OF OHIO ex rel. Lee FISHER, Attorney General, Plaintiff, v. LOUIS TRAUTH DAIRY, INC., et al., Defendants.
• Court: U.S. District Court — Southern District of West Virginia

856 F. Supp. 1229

STATE OF OHIO ex rel. Lee FISHER, Attorney General, Plaintiff, v. LOUIS TRAUTH DAIRY, INC., et al., Defendants.

No. C-1-93-0553.

United States District Court, S.D. Ohio, Western Division.

April 23, 1994.

COPYRIGHT MATERIAL OMITTED

Doreen Claire Johnson, Ohio Atty. Gen., Columbus, OH, for the State of Ohio.

James Rubin Cummins, Brown, Cummins & Brown, Stanley Morris Chesley, Waite, Schneider, Bayless & Chesley, Cincinnati, OH, Doreen Claire Johnson, Ohio Atty. Gen., Columbus, OH, for Lee Fisher.

G. Jack Donson, Jr., Taft, Stettinius & Hollister, Cincinnati, OH, for Louis Trauth Dairy, Inc., David E. Trauth.

Brian Edward Hurley, Crabbe, Brown, Jones, Potts & Schmidt, Cincinnati, OH, for Dan Smith.

Donald L. Stepner, Adams, Brooking, Stepner, Woltermann & Dusing, Covington, KY, for H. Meyer Dairy Co.

William J. Brown, Emens, Kegler, Brown, Hill & Ritter, Columbus, OH, for Borden, Inc., Meadow Gold Dairies, Inc., Valley Bell Dairy.

Donald S. Scherzer, Kohrman, Jackson & Krantz, Cleveland, OH, for Reiter Dairy, Inc., Broughton Foods Co.

Edward Schmertz Dorsey, Lindhorst & Dreidame, Cincinnati, OH, for Coors Bros. Co., Inc.

John J. Eklund, Calfee, Halter & Griswold, Cleveland, OH, for Smith Dairy Products Co., Inc.

Ralph E. Cascarilla, Cavitch, Familo & Durkin, Cleveland, OH, for Goshen Dairy Co. Stephen J. Squeri, Jones Day Reavis & Pogue, Cleveland, OH, for Hillside Dairy Co.

Richard L. Stoper, Jr., Gold Rotatori & Schwartz Co., L.P.A., Cleveland, OH, for Superior Dairy, Inc.

Robert P. Fitzsimmons, Fitzsimmons & Associates, Wheeling, WV, for United Dairy, Inc.

Gerald Francis Kaminski, U.S. Atty., Cincinnati, OH, for U.S.

ORDER DENYING DEFENDANT'S MOTION TO DISMISS

SPIEGEL, District Judge.

This matter is before the Court on Motions To Dismiss or for a More Definite Statement filed individually and jointly by the various Defendants (docs. 31, 32, 33, 35, 36, 41, 43, 63, 85, 93, and 94). The Plaintiff has responded to these motions (docs. 58, 86, and 106). The Defendants, in turn, have replied (docs. 72, 80, 81, and 99). The Plaintiff has requested leave to file a Surreply (108). The Defendants then filed a Joint Response to Plaintiff's request to surreply (doc. 114) and the Defendants themselves have asked for leave to file their own Supplemental Memorandum (doc. 140).

In addition, the Defendants from Northeast Ohio have separately moved to be dropped from this suit or to sever and transfer the claims against them (doc. 115). The Plaintiff has responded (doc. 129), and the Northeast Defendants have replied (doc. 142). The Borden Defendants have also replied (doc. 138) in support to the Northeast Defendants.

Initially, we will grant all requests for leave to file additional briefs beyond those ordinarily permitted under Local Rule 7.2(a)(2). Due to the complexity and interdependence of these motions and out of an abundance of caution, we intend to consider all relevant arguments of the parties.

BACKGROUND

The Secretary of State has sued fifteen dairies doing business in Ohio, alleging price fixing in the sale of milk to schools. In addition the Amended Complaint names certain officers of the Defendant Dairies personally. Subsequent to the filing of some of the Defendants' Motions to Dismiss, the Plaintiff, as directed by the Court, filed Plaintiff's Outline Description of Overlapping Conspiracies (doc. 75). This document was ordered by the Court in response to the Defendants' requests for a more clear statement of the charges leveled against them. At this time two dairies, Meyer Dairy and Coors Dairy, have settled with the Plaintiff and have been dismissed from this case. The Defendants have cooperated in the filing of these motions and many Defendants incorporate the motions of the others.

STANDARD OF REVIEW

A motion to dismiss for failure to state a claim upon which relief can be granted under Fed.R.Civ.P. 12(b)(6) must be viewed in the light most favorable to the party opposing the motion. Great Lakes Steel v. Daggendorf, 716 F.2d 1101, 1105 (6th Cir.1983). A court must accept as true all allegations in the well pleaded complaint under attack. Id. A court may grant the motion only "if it appears beyond doubt that the plaintiffs can prove no set of facts in support of their claims which would entitle them to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957); Balderaz v. Porter, 578 F.Supp. 1491, 1494 (S.D.Ohio 1983).

DISCUSSION

Failure to State a Claim

The Defendants' original Motion to Dismiss or For a More Definite Statement challenged the adequacy of Plaintiff's First Amended Complaint. Initially, the Defendants noted that the Complaint failed to name the actual school boards on whose behalf the Secretary is acting. Further, the Defendants protested that the allegations in the Complaint were conclusory and failed to give them adequate notice of the claims made against them. In the alternative the Defendants prayed for a more definite statement of the Plaintiff's claims. The Court found merit in these assertions by the Defendants and ordered in our Preliminary Pretrial Order that the Plaintiff supplement his Amended Complaint as follows:

By November 15, 1993, the Plaintiff will file with the Court an Outline Description of the Overlapping Conspiracies alleged in the Complaint, including:

(1) which dairies were involved in each conspiracy,

(2) which school districts were the target of each conspiracy,

(3) when each conspiracy began and ended,

(4) what were the geographic boundaries of each conspiracy,

(5) what overt acts by the dairies tend to prove the conspiracy theory.

Preliminary Pretrial Order, October 24, 1993, Document 38. The Plaintiff has submitted the Description (doc. 75) as ordered. Some Defendants contend that even with this information the Plaintiff's Amended Complaint is inadequate. However, we hold that with the filing of the Plaintiff's Description of the Conspiracies, the requirements of notice pleading are satisfied. See Fed.R.Civ.P. 8(a).

Satisfaction

Next the Defendants argue that the Settlement Agreement between Meyer Dairy and the State of Ohio constitutes full restitution, thereby leaving no claim for damages against the remaining Defendants. However, it is established law in Ohio that settlement with one Defendant, with a reservation of rights against other Defendants does not act as bar to suit against another Defendant who may also be liable. See Whitt v. Hutchison, 43 Ohio St.2d 53, 60, 330 N.E.2d 678 (1975). Therefore, the Defendants' Motion to Dismiss based on the Meyer Dairy settlement must be denied.

Standing

The Defendants argue that the Plaintiff lacks standing to bring their Valentine Act claims for damages. They base their contention primarily on the language of the Act in conjunction with the Thaxton case. Thaxton v. Medina City Board of Education, 21 Ohio St.3d 56, 488 N.E.2d 136 (1986).

There is nothing in the language of the Act which would prevent a school district from bringing an action. The Act states in pertinent part that:

The person injured in his business or property by another person by reason of anything forbidden or declared to be unlawful in this Act, may sue therefor in any court having jurisdiction and venue thereof, ....

Ohio Rev.Code § 1331.01(A). The Act provides this definition of "person:"

(A) "Person" includes corporations, partnerships, and associations existing under or authorized by any state or territory of the United States, and solely for the purpose of the definition of division (B) of this section, a foreign governmental entity.

Ohio Rev.Code § 1331.01(A). As the Ohio Supreme Court has noted, the definition is not exclusive, and gives no indication that the legislature intended to eliminate school boards. Thaxton, 21 Ohio St. at 57, 488 N.E.2d 136.

The Defendants maintain that a school board is not a "person" within the meaning of the Act. They base this contention on the holding in Thaxton. In that case a school board was sued for Valentine Act violations. The Ohio Supreme Court held in the syllabus:

A public board of education is not a "person," as defined in R.C. 1331.01(A), when the board operates within its clear legal authority.

Thaxton v. Medina City Board of Education, 21 Ohio St.3d 56, 488 N.E.2d 136 (1986). It would, at first glance, appear that Thaxton not only protect a school district from suit under the Valentine Act, but also would exclude school districts from becoming a plaintiff under the Act. However, upon closer analysis, we are persuaded that despite the broad language of the syllabus, the intent of the Ohio Supreme Court was only to provide protection from lawsuits against school boards. We do not find that it intended to deprive school districts the right to sue, if the districts should become the victims of price fixing.

We must begin this analysis with a consideration of the significance of the syllabus in Ohio cases. The Ohio Supreme Court is required by statute to make a brief statement of the new and important points of law which each case establishes. Ohio Rev.Code § 2503.42. It is axiomatic that this brief statement, the syllabus, states the law of the case, and that all courts applying Ohio law are bound to adhere to the principles set forth there. Smith v. Klem, 6 Ohio St.3d 16, 18, 450 N.E.2d 1171 (1983); Grange Mut. Cas. Co. v. Smith, 80 Ohio App.3d 426, 431, 609 N.E.2d 585 (Washington Cty.1992). However, the syllabus cannot be understood in a vacuum, but must be read in the context of the facts of the particular case upon which it is premised. It is not to be regarded as absolutely controlling authority in other cases where the material facts are different. Fenner v. Parkinson, 69 Ohio App.3d 210, 214, 590 N.E.2d 339 (Franklin Cty.1990). The Supreme Court of Ohio Rules for the Reporting of Opinions declares that "the syllabus ... states the controlling point or points of law decided in and necessarily arising from...