Antitrust Law Daily Wrap Up, ANTITRUST—D. Ida.: Settlements in potato price fixing class action get final approval, (Dec 15, 2015)

By Linda O’Brien, J.D., LL.M.

The federal district court in Boise, Idaho has granted final approval to two settlements in a class action brought on behalf of direct and indirect purchasers of potatoes against producers and a distributor for allegedly conspiring to fix potato prices (In re Fresh and Process Potatoes Antitrust Litigation, June 17, 2015, Winmill, B.).

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 cooperatives allegedly agreed to limit potato planting acreages and paid farmers to either destroy existing stocks or refrain from growing potatoes in order to reduce the supply of potatoes available for sale.

In June 2015, the court granted preliminary approval to the proposed settlements with the direct and indirect purchaser plaintiffs. The hearing regarding the fairness and adequacy of the proposed settlements was held on December 3.

Direct purchaser settlement classes. Under the terms of the settlement, all defendants will pay a total of $19.5 million to resolve the direct purchaser plaintiffs’ claims. For purposes of the settlement, the court certified classes for monetary and injunctive relief as follows: all persons or entities who, between June 18, 2006 and the date on which the court enters the preliminary approval order, directly purchased fresh potatoes grown in the United States from any defendant or any entity that packed or marketed fresh potatoes grown by any defendant.

According to the court, the settlement negotiations were undertaken at arm’s length by experienced counsel who entered the negotiations with sufficient background as to the facts of the case. Moreover, the settlement was fair in light of (1) the complexity, expense, and likely duration of the litigation; (2) completion of discovery; and (3) reaction of the class. Only six members excluded themselves from the settlement and only one objection was filed, which was later withdrawn.

The plaintiffs satisfied the requirements of Federal Rule of Civil Procedure 23. The court determined that the members of the settlement class were so numerous that joinder would be impracticable and there were questions of fact or law common to the classes. The claims and defenses of the named plaintiffs were typical of the claims and defenses of the proposed settlement class, and the representative parties will fairly and adequately protect the interests of the class. Further, the questions of law or fact common to the class predominate over any questions affecting only individual members, and a class action is superior to other available methods for fairly adjudicating the controversy.

The court also approved the proposed plan for the dissemination of notice and plan for the allocation and distribution of the net settlement fund.

Indirect purchaser settlement classes. Under the terms of the settlement, defendants will pay a total of $5.5 million to resolve the indirect purchaser plaintiffs’ claims. For purposes of the settlement, the court certified classes for monetary and injunctive relief as follows: all individuals and entities that purchased fresh potatoes from retailers in Arizona, California, Florida, Iowa, Kansas, Massachusetts, Michigan, Minnesota, Nevada, New York, North Carolina, Tennessee, Vermont, and Wisconsin for end use and not for resale between October 14, 2004 and April 10, 2015.

The court specifically found that the settlement resulted from serious and informed arm’s length negotiations, provides meaningful relief to the classes, and is not preferential to the class representatives. The named plaintiffs have fairly and adequately represented the interests of the classes.

The plaintiffs satisfied the requirements of Federal Rule of Civil Procedure 23. The court determined that the members of the settlement class were so numerous that joinder would be impracticable and there were questions of fact or law common to the classes. The claims and defenses of the named plaintiffs were typical of the claims and defenses of the proposed settlement class, and the representative parties will fairly and adequately protect the interests of the class. Further, the questions of law or fact common to the class predominate over any questions affecting only individual members, and a class action is superior to other available methods for fairly adjudicating the controversy.

Attorney’s fees and expenses. An award of attorney’s fees of $1.65 million for the indirect purchasers’ class counsel, equating to 30 percent of the settlement fund, was fair and reasonable, according to the court. The amount was confirmed by a lodestar “cross-check.” The fees were entirely contingent upon success and warranted by the time and effort risked with no ultimate guarantee of compensation. The requested expenses in the amount of $967,833 were incurred with the prosecution of the case on benefit of the class and were reasonable and necessary. Finally, the requested service award of $1,000 for each named plaintiff also was approved.

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

Attorneys: Aaron M. Sheanin (Pearson, Simon, Warshaw & Penny, LLP) and Alexandra S. Bernay (Robbins Geller Rudman & Dowd LLP) for Brigiotta's Farmland Produce and Garden Center, Inc. Amanda K. Brailsford (Andersen Banducci PLLC) for United Potato Growers of Idaho, Inc., United Potato Growers of America, Inc., United II Potato Growers of Idaho, Inc., Wada Farms Potatoes, Inc., Wada-Van Orden Potatoes, Inc. and Wada Farms Marketing Group, LLC. David F. Smutny (Orrick, Herrington & Sutcliffe LLP) for Blaine Larsen Farms, Inc. and Driscoll Potatoes, Inc.

Companies: Brigiotta's Farmland Produce and Garden Center, Inc.; United Potato Growers of Idaho, Inc.; United Potato Growers of America, Inc.; United II Potato Growers of Idaho, Inc.; Wada Farms Potatoes, Inc.; Wada-Van Orden Potatoes, Inc.; Wada Farms Marketing Group, LLC.; Blaine Larsen Farms, Inc.; Driscoll Potatoes, Inc.

Cases: Antitrust IdahoNews