Antitrust Law Daily Wrap Up, ANTITRUST—D. Ida.: Motion to compel production of privileged documents granted in potato price fixing litigation, (Apr 14, 2014)

By Linda O’Brien, J.D., LL.M.

In a class action by purchasers of potatoes against potato producers and a distributor for violations of the Sherman Act by allegedly engaging in a conspiracy to fix prices, the federal district court in Boise has granted in part the plaintiffs’ motion to compel production of documents identified in privilege logs. Thus, defendants that had signed a waiver stipulation were required to produce all documents and communications relating to their organization under the antitrust laws (In re Fresh and Process Potatoes Antitrust Litigation, April 11, 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, Cedar Farms, Raybould Brothers Farms, and United Potato Growers of America), Orrick Defendants (Blaine Larsen Farms and Driscoll Potatoes), and R.D. Offutt Company.

The court found that the attorney-client privilege was waived with respect to all documents and communications relating to certain cooperative defendants’ organization under the antitrust laws as well as to all communications concerning those defendants’ conduct for which they sought advice of counsel. Federal Rule of Civil Procedure 26 allows a party to obtain discovery regarding any non-privileged matter that is relevant to any party’s claim or defense. The Andersen and Orrick Defendants asserted an affirmative defense of a reasonable good faith belief that their conduct in organizing the cooperatives was permissible under federal antitrust law or fell within the scope of the Capper-Volstead Act. For purposes of discovery, those defendants signed a waiver agreeing to produce privileged documents reflecting communications with counsel and/or relating to advice from counsel regarding their belief in the legality of their conduct.

The court agreed with the plaintiffs’ interpretation of the waiver stipulation that any documents containing communications relating to advice of counsel regarding the defendants’ belief that the conduct alleged was lawful was subject to disclosure. Due to the imprecise language of the waiver, the defendants effected a waiver of all documents reflecting communications with counsel. The court noted that it would be patently unfair for a party to assert reliance upon advice of counsel and not allow an opponent to understand why the advice was given, what alternatives were considered, why certain advice was rejected, and how the advice interrelated to other business decisions.

However, the court denied the motion to compel with respect to the defendant Offutt Company. The company did not sign the waiver stipulation and was not a member of the potato cooperatives. Moreover, there was no implied waiver of the attorney-client privilege because the Offutt Company did not assert reliance upon advice of counsel to prove its affirmative defenses, the court concluded.

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. and Taul LLC. Gregory P. Hansel (Preti Flaherty Beliveau & Pachios, LLP) for J. R. Mazzola, Inc. Steve Six (Stueve Siegel Hanson) for Associated Wholesale Grocers, Inc. Amanda K. Brailsford (Andersen Banducci PLLC) for United Potato Growers of Idaho, Inc.

Companies: Brigiotta’s Farmland Produce and Garden Center, Inc.; Taul LLC; J. R. Mazzola, Inc.; Associated Wholesale Grocers, Inc.; United Potato Growers of Idaho, Inc.

Cases: Antitrust IdahoNews