Antitrust Law Daily Wrap Up, ANTITRUST—D. Ida.: Attorney-client privilege, common interest doctrine did not shield documents in potato price fixing litigation, (Jun 4, 2014)

By Linda O’Brien, J.D., LL.M.

In a class action by purchasers of potatoes against potato producers and a distributor for conspiring to fix prices, the federal district court in Boise, Idaho, has granted in part the plaintiffs’ motion to compel production of documents identified in privilege logs (In re Fresh and Process Potatoes Antitrust Litigation, May 30, 2014, Dale, C.).

Direct and indirect purchasers of potatoes filed suit against several potato producers and a distributor, alleging a conspiracy by the defendants to reduce the supply of potatoes in order to raise prices. The plaintiffs alleged that the producers formed cooperatives for the purpose of increasing the price of potatoes through supply management. The direct purchaser plaintiffs sought production of certain documents from the Andersen Defendants (Wada Farms, Raybould Brothers Farms, and United Potato Growers of America), Orrick Defendants (Blaine Larsen Farms and Driscoll Potatoes), Potandon Produce, LLC, and R.D. Offutt Company.

Attorney-client privilege. The court found that the attorney-client privilege did not apply to documents that were disclosed to third parties. The Orrick Defendants asserted that the requested documents contained communications from counsel providing legal advice regarding a draft marketing agreement. The court noted that the attorney-client privilege applied to communications by members of an organization in the members’ organizational capacity with the organization’s attorney. In this case, the requested documents were shared between several individuals seeking business advice on marketing arrangements and the individuals were not acting solely in their organizational capacity when seeking that advice.

The attorney-client privilege also did not apply to documents containing communications between counsel and the Andersen Defendants that were disclosed to members of the farm cooperatives since the existence of an attorney-client relationship between the Andersen Defendants’ counsel and the cooperative members was not demonstrated. The communications concerned discussions of a joint business strategy among cooperative members, were shared by various entities for purposes other than cooperative business, and were not intended to be kept confidential, according to the court.

Common interest doctrine. The court also determined that the common interest doctrine did not protect from disclosure documents containing legal advice regarding defendant Potandon’s general business relationships with the cooperatives that was shared with the cooperatives and that occurred prior to the commencement of litigation. The common interest doctrine applies if the communication is made by separate parties in the course of a common interest, the communication furthers that effort, and the privilege is not waived. Potandon asserted that it shared a common legal interest with the cooperatives in its structure and marketing agreements and its counsel coordinates certain business decisions with counsel for the cooperatives. The court noted that Potandon’s shared interest in maintaining compliance and avoiding litigation did not transform the cooperatives’ common interest into a legal interest for purposes of the doctrine. Further, the requested communications contained general legal advice that was shared with third parties about a common business strategy which happened to include a concern about litigation. The doctrine did not extend to those communications since there was no threat of litigation at the time the communications were shared, the court concluded.

Documents containing legal advice. However, the court denied the motion to compel with respect to the defendant Offutt Company. The requested documents contained legal advice regarding ongoing litigation and were directed to employees of Offutt subsidiaries. Thus, the documents were properly withheld as privileged and the privileged was not waived due to disclosure to third parties.

The court also denied the motion to compel regarding documents that were board meeting minutes of the Andersen Defendants. The documents contained legal advice provided only to cooperative board members and were protected as confidential attorney-client communications.

The case is No. 4:10-md-02186-BLW-CWD.

Attorneys: Aaron M. Sheanin (Pearson, Simon, Warshaw & Penny, LLP) for Brigiotta's Farmland Produce and Garden Center, Inc. Steve Six (Stueve Siegel Hanson) for Associated Wholesale Grocers, Inc. Amanda K. Brailsford (Andersen Banducci PLLC) for United Potato Growers of Idaho, Inc. and Wada Farms Potatoes, Inc. Daniel G. Swanson (Gibson Dunn & Crutcher, LLP) for Dole Fresh Vegetables, Inc. Daniel W. Bower (Stewart Taylor & Morris PLLC) for Blaine Larsen Farms, Inc. Richard C. Boardman (Perkins Coie) for General Mills, Inc.

Companies: Brigiotta's Farmland Produce and Garden Center, Inc.; Associated Wholesale Grocers, Inc.; United Potato Growers of Idaho, Inc.; Wada Farms Potatoes, Inc.; Dole Fresh Vegetables, Inc.; Blaine Larsen Farms, Inc.; General Mills, Inc.

Cases: Antitrust IdahoNews