Winn-Dixie Stores v. E. Mushroom Mktg. Coop.

• Decision Date: 12 May 2021
• Docket Number: CIVIL ACTION No. 15-6480
• Citation: Winn-Dixie Stores v. E. Mushroom Mktg. Coop., CIVIL ACTION No. 15-6480 (E.D. Pa. May 12, 2021)
• Parties: WINN-DIXIE STORES, INC., et al., Plaintiffs, v. EASTERN MUSHROOM MARKETING COOPERATIVE, et al., Defendants.
• Court: U.S. District Court — Eastern District of Pennsylvania

WINN-DIXIE STORES, INC., et al., Plaintiffs, v. EASTERN MUSHROOM MARKETING COOPERATIVE, et al., Defendants.

CIVIL ACTION No. 15-6480

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA

May 12, 2021

MEMORANDUM

Schiller, J.

Winn-Dixie has accused the Eastern Mushroom Marketing Cooperative, its members, and various affiliates of unlawfully colluding to inflate the price of fresh agaricus mushrooms.The instant motion, however, does not deal with whether antitrust laws were violated.Instead, it asks whether Winn-Dixie can maintain an action for antitrust damages against Defendants based on its purchase of mushrooms from a non-party.Defendants¹ move for partial summary judgment arguing that Winn-Dixie was not a direct purchaser from Defendants for a portion of the claimed conspiracy period, and therefore, it lacks antitrust standing to pursue some of its claims for damages.For the following reasons, the Court will deny the motion.

I.FACTUAL BACKGROUND

This case is one of a related series of actions dealing with alleged price fixing and collusion in the market for fresh agaricus mushrooms.In February 2006, WM Rosenstein & Sons Co. filed a class action complaint alleging that various players in the mushroom industry colluded to inflate the price of mushrooms by agreeing on minimum prices and by decommissioning various mushroom farms in order to reduce mushroom supply.That complaint was later consolidated with six similar class actions, and a consolidated class action complaint was filed on November 13, 2007.Winn-Dixie, along with co-plaintiff Bi-Lo, opted out of the class action and initiated this action in 2015.Plaintiffs' Complaint was similar in all meaningful respects to the class action complaint that preceded it.Plaintiffs' First Amended Complaint, filed in January 2019, asserts claims pursuant to the Sherman ActandClayton Act and alleges that Winn-Dixie "purchased Agaricus mushrooms directly from one or more Defendants."(FirstAm. Compl. ¶ 18.)

Now before this Court is Defendants' motion for partial summary judgment against Winn-Dixie, which argues that Winn-Dixie cannot maintain an action for antitrust damages during a portion of the alleged conspiracy period because it did not purchase mushrooms directly from an alleged conspirator.Defendants argue that from late 2004 through 2010, Winn-Dixie purchased mushrooms from Oakshire Mushroom Sales, LLC(OMS), which is not a party to this action and was not a member of the alleged conspiracy, thereby rendering Winn-Dixie an indirect purchaser.

In support of this argument, Defendants present the Certification of Gary Schroeder, sole shareholder and President of both OMS and DefendantOakshire Mushroom Farm, Inc.(OMF).(Ex. A to Defs.'Mot. for Summ. J.[Schroeder Cert.]¶ 1.)Schroeder states that OMF was incorporated in 1985 for the purpose of growing, packaging, and selling specialty mushrooms.(Id.¶ 3.)In 2001, OMF joined the EMMC, and Schroeder was also elected Treasurer of the EMMC.(Id.)OMS was formed in 2002 to market and sell mushrooms under the brand name "Dole."(Id.¶ 4.)OMS "kept separate books and records from OMF," but "the two companies shared some common employees and used a common ordering system."(Id.¶ 10.)

OMS began selling mushrooms to Winn-Dixie in 2004.(Id.¶ 6.)Schroeder states that OMS purchased all of the mushrooms that it resold to Winn-Dixie either from OMF "at prices that included the packaging and delivery costs[,]" or from South Mill Mushrooms and Country Fresh Mushrooms "at negotiated prices which included the packaging and delivery costs."(Id.¶ 8.)Schroeder states the prices negotiated between OMS and Winn-Dixie "were not affected or influenced by any rule, regulation or program adopted by the EMMC."(Id.¶ 7.)Schroeder states that OMS did not offer or attempt to join the EMMC, nor did Schroeder ever agree "that OMS would follow any of the rules[,] regulations or pricing policies adopted by the EMMC."(Id.¶ 5.)

Defendants present two supply agreements between Winn-Dixie and OMS that were signed in 2005 and 2007.(Id.¶ 6; Exs. A-B to Schroeder Cert.)Winn-Dixie does not dispute that it entered into a two-year supply agreement in 2005 and a three-year supply agreement in 2007 to purchase mushrooms "from the Oakshire companies, including OMS."(Pl.'s Resp. to Defs.' Statement of Undisputed Material Factsat 33, 35.)However, Plaintiff disputes that these agreements were solely between Winn-Dixie and OMS, because it states that OMS "was acting on behalf of its affiliated and commonly owned and controlled sister company, OMF."(Id.)

Plaintiff contends that genuine issues of material fact exist as to whether Winn-Dixie was an indirect purchaser and whether OMS was owned or controlled by OMF.In opposition to Defendants' motion for partial summary judgment, Plaintiff submits the class action deposition testimony of Gary Schroeder(Pl.'sEx. 1[Schroeder Tr.]), and Kirk Reichert, who was the controller for OMF.(SeePl.'s Statement of Undisputed Mat. Facts in Opp. to Defs.' Mot. [Pl.'sSUMF]¶ 4;Pl.'sEx. 4[Reichert Tr.].)In further support, Winn-Dixie presents the deposition testimony of representatives of several other EMMC members, as well as the EMMC Membership Agreement signed by Gary Schroeder, sales data from OMS, and analysis of its expert Dr. Keith Leffler.(SeePl.'sEx. 5, 8, 11-14, 16-17.)

II.STANDARD OF REVIEW

Summary judgment is appropriate when admissible evidence fails to demonstrate a genuine dispute of material fact and the moving party is entitled to judgment as a matter of law.Fed. R. Civ. P. 56(a), 56(c);Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48(1986).Material facts are those "that could affect the outcome" of the proceeding, and "a dispute about a material fact is 'genuine' if the evidence is sufficient to permit a reasonable jury to return a verdict for the non-moving party."Lamont v. New Jersey, 637 F.3d 177, 181(3d Cir.2011).Evidentiary matter in support of the motion must establish the absence of a genuine dispute of material fact; if it does not, the motion will be denied, even if no opposing evidentiary matter is presented, because "a response is not essential to defeat a motion that does not satisfy the movant's initial burden."Maldonado v. Ramirez, 757 F.2d 48, 50(3d Cir.1985)(citingAdickes v. S.H. Kress & Co., 398 U.S. 144, 160-61(1970)).In reviewing the record, "a court must view the facts in the light most favorable to the nonmoving party and draw all inferences in that party's favor."Armbruster v. Unisys Corp., 32 F.3d 768, 777(3d Cir.1994).A court may not, however, make credibility determinations or weigh the evidence in considering motions for summary judgment.Anderson, 477 U.S. at 255.

III.DISCUSSION

The question raised by Defendants' motion for partial summary judgment is whether Winn-Dixie can bring an action for antitrust damages for its purchases of mushrooms from non-partyOMS.As a threshold matter, the Court will consider and deny Plaintiff's request to strike the Certification of Gary Schroeder.Defendants' motion relies entirely on the Schroeder Certification and its accompanying exhibits, so the Court must first determine whether it may consider this Certification before it can assess Defendants' motion.Then the Court will turn to the merits of Defendants' motion for partial summary judgment.

A.Plaintiff's Request to Strike the Schroeder Certification

Plaintiff makes two distinct arguments to exclude the Schroeder Certification offered in support of Defendants' motion.First, Plaintiff argues that the Certification does not meet the requirements of 28 U.S.C. § 1746 or Rule 56(c)(4).Second, because OMS and OMF are in bankruptcy, Plaintiff argues that the Schroeder Certification violated the automatic stay of the bankruptcy court.The Court rejects both of these arguments.

1.Compliance with 28 U.S.C. § 1746andRule 56(c)(4)

An unsworn statement can support a motion for summary judgment to the same extent as a sworn affidavit as long as the statement is made under penalty of perjury.United States ex rel. Doe v. Heart Sol., PC, 923 F.3d 308, 315(3d Cir.2019);Fed. R. Civ. P. 56(c)(4) cmt. on 2010 amdts.(citing28 U.S.C. § 1746).

The Schroeder Certification concludes with the statement:

"The foregoing statements made by me are true and correct to the best of my knowledge, information and belief.I am aware that if any statement made by me is intentionally false, I am subject to punishment under the perjury and false statement laws of the Commonwealth of Pennsylvania or the United States."

(Schroeder Cert.)Plaintiff argues the Certification should be excluded because it does not substantially comply with 28 U.S.C. § 1746, which requires that an unsworn certification is verified as true and correct under penalty of perjury.Plaintiff argues that Schroder's qualifiers thatthe statement is true and correct "to the best of [his] knowledge, information and belief[,]" and that Schroeder is subject to perjury only if any statement is "intentionally false," render the Certification non-compliant.(Pl.'s Resp. in Opp. to Defs.' Motion [Pl.'s Resp.]at 46-48.)

The Court finds that Schroeder's Certification substantially complies with the requirements of 28 U.S.C. § 1746.A declarant is guilty of federal perjury when he"willfully subscribes as true any material matter which he does not believe to be true[.]"18 U.S.C. § 1621(2).Schroeder's certification that his "intentionally false" statements are subject to punishment under perjury laws does not diminish the penalty of federal perjury, and therefore substantially complies with 28 U.S.C. § 1746.

Schroeder's statement that the entire Certification is true and correct "to the best of [his] knowledge, information and belief[,]" also does not require its exclusion."[W]hen affidavits based on knowledge and belief are submitted to support or oppose a motion for summary judgment, ...